The Institute of Energy Economics (IEEJ) in Japan has stated that the global industry will require an investment of $7 trillion to ensure a sufficient supply of natural gas and avoid crises until 2050. This funding will be needed to construct new liquefied natural gas (LNG) plants and expand existing facilities. Furthermore, it will also be necessary to develop new gas deposits as countries transition from coal to cleaner energy sources.
The IEEJ report assumes a 56% reduction in emissions by the middle of the century. However, in a scenario where emissions remain at current levels by 2050, the world will require almost $10 trillion to prevent natural gas shortages, according to the IEEJ projections.
While there is a growing demand for natural gas, conflicting outlooks on future gas demand are creating uncertainty for companies and hindering their ability to plan for future investments in new supplies. The International Gas Union (IGU) recently reported that the “unprecedented demand uncertainty and insufficient level of investment in natural gas, low-carbon, and renewable gases are putting the energy transition at risk, undermining energy affordability, security, and sustainability.”
Last week, the International Energy Agency (IEA) warned that global gas markets have entered a “new and more uncertain” period marked by slower growth and higher volatility. This uncertainty could potentially result in a peak in global gas demand by the end of the decade.
In light of these developments, it is crucial for industry stakeholders and policymakers to prioritize long-term energy planning and investments. Ensuring a stable and sufficient supply of natural gas is vital for meeting global energy needs and facilitating the transition to cleaner energy sources. Failure to do so could lead to energy crises and disrupt both energy affordability and security.
Overall, the IEEJ’s call for a $7 trillion investment in natural gas infrastructure highlights the growing importance of this energy source in meeting future energy demands. The urgency to shift away from coal and reduce emissions necessitates significant investment in LNG facilities, expansion of existing plants, and the development of new gas fields. By making these investments, the industry will be better equipped to support the energy transition and mitigate potential crises in the future.
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