China is in a “golden age” for natural gas that will make it the world’s biggest user of the fuel sometime between 2040 and 2050, according to analysts at Sanford C. Bernstein & Co.
The nation is poised to outpace the U.S., the current No. 1 consumer of natural gas, as well as all other countries over the next two decades, Bernstein said in an Oct. 17 research note. China led growth in global oil demand for much of the past 20 years.
The boom in demand underscores the Chinese government’s intent to shift the world’s second-largest economy away from dirtier fuels like coal and petroleum in an effort to clean the air in its smog-choked cities. Natural gas demand through the end of August was up 18 percent from the previous year, according to government data.
“China’s gas market has entered a new golden age,” Neil Beveridge, an analyst at Bernstein, wrote in the report. “Growth in 2017 has shown significant improvement over 2016, as government policies to stimulate gas demand growth are starting to pay dividends.”
Use will probably continue to surge over the next few years, Beveridge wrote in the report, and should reach 300 billion cubic meters in 2020, up from 206 billion last year. Demand could grow to about 600 billion cubic meters by 2040 and then surpass the U.S. sometime between 2040 and 2050 to make China the world’s largest consumer of natural gas, according to the projection.
With China leading the way, Asia’s gas demand is expected to double to 1.2 trillion cubic meters a year by 2025, according to Bernstein. Several factors are behind the surge, including economic growth, urbanization, environmental factors and a boom in gas supply led by shale drillers in the U.S.
The major risk to future gas demand is the possibility that renewable power sources will take a larger slice of the global energy pie faster than now expected.