To understand why natural gas is poised to become an even more predominant fuel in the 21st century, one has to also understand how the world is getting richer. This is especially true across large parts of Asia and China where, in a relatively short time, millions of people joined the ranks of the middle class. This economic expansion is igniting unprecedented consumption of energy as people tap some of their disposable income to purchase automobiles, refrigerators, or televisions, all of which require energy to operate. More and more of that energy is slated to come from natural gas, whether it be used to fuel power generation plants or even trucks and buses in the form of liquefied natural gas or compressed natural gas.
In a world characterized by increasing prosperity, growing energy use, and an expanding push to cut greenhouse gas emissions, natural gas will be one of the most important sources of energy to meet the needs of the future. Through six charts we show some of the economic and demographic trends that will drive demand for natural gas over the next quarter century.
Rising living standards means rising consumption
Between 2014 and 2040 global GDP will more than double. Rising incomes means rising consumption as new members of the middle class buy goods like refrigerators, televisions, and automobiles. All of these require energy to produce, transport and operate—energy that more and more will be supplied by natural gas.
The world will consume more energy
The need for safe, clean, and reliable energy is expanding significantly, driven by developing nations where demand will likely grow by 45 percent between 2014 and 2040. The supply of energy from emerging sources including solar, wind, and biofuels will grow by about 5 percent annually on average to 2040. By 2040 natural gas and oil will meet about 60 percent of global energy demand.
A new CO2 reality
The growing role for natural gas will help cut CO2 intensity in both industrialized economies and emerging markets. Longer term, the shift toward natural gas and other less-carbon-intensive energy types, combined with significant improvements in energy efficiency, will enable global energy-related CO2 emissions to peak around 2030. This will be a significant result, recognizing that energy-related CO2 emissions rose more than 50 percent from 1990 to 2014.
A local resource
With global natural gas demand likely to rise by 50 percent between 2014 and 2040, supplying the markets will be a challenge. Some of the natural gas will be shipped across oceans as LNG. Some will be transported via large regional pipeline networks. However, most of it will be produced locally, in places like the Marcellus and Barnett Shales in the U.S., helping ensure reliable, affordable energy to support broad-based economic prosperity and thousands of well-paid jobs.
Natural gas will be used to generate a greater percentage of electricity
By 2040 about 30 percent of the world’s electricity will be generated by natural gas. Motivating the shift are a number of factors, including: energy security, cost of fuel, and emissions concerns. In the U.S. the switch to natural gas a source of power generation is already well underway. A recent report by the U.S. Energy Information Administration shows that for the 12-month period ending January 2016, natural gas surpassed coal as the leading fuel for generating the nation’s electricity.
Sources: Charts: “ExxonMobil: The Outlook for Energy: A View to 2040”;
Refrigerator sales, 2002 – 2022: Freedonia Group, Inc.; ExxonMobil estimates