Demand for natural gas will NOT grow 70 to 80% through 2050

Claims that demand for natural gas is expected to grow 70 to 80% through 2050 run counter to the most recent (2024) World Energy Outlook from the International Energy Agency which finds that global demand for natural gas will plateau by 2030 even in the most conservative scenarios as a result of the deployment of renewables, efficiency gains, and electrification of end-uses.

LNG demand is expected to grow only in the unlikely scenario that the countries of the world take no further climate action out to 2050 beyond current stated policies and the world experiences 2.4 degrees of warming and even in that scenario it’s not a 70 to 80% growth. That also means that betting on growing demand for natural gas or LNG is actually betting on climate catastrophe.

But regardless of climate action, there is a projected glut in LNG supply expected in the coming years that will likely drive down prices and make it difficult for Canada’s relatively costly LNG to compete.

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Demand for LNG in emerging markets is contingent on price, and LNG is expensive to produce in Canada. LNG is a risky bet as renewables are rapidly becoming the default for energy development especially across the ‘Global South.’ Low-cost renewable energy is soaring in China and Vietnam: Vietnam’s wind and solar generation exceeds gas-fired power generation. Demand is estimated to have already peaked in Europe and South Korea. China has already surpassed its 2030 renewable energy ambitions, by building out a record in renewables last year, and Canada actually risks losing out on the renewable future of energy.

Global demand for oil and gas is set to peak this decade and then decline, and there are enough projects already underway to meet that demand. As a result of the coming decline in demand, global oil and gas corporate exploration budgets are already shrinking and oil and gas investment is shifting to short term gains.

The International Energy Agency (IEA), an authoritative voice on energy, says in its World Energy Outlook for 2024 anticipates a surplus of LNG supply in the coming years, and that “we estimate that the sponsors of around 70% of LNG export projects currently under construction would struggle to recover their invested capital.”

Exporting LNG will likely raise the cost of gas in Canada and BC households are going to experience much higher gas bills when BC starts exporting LNG this summer because they’ll be paying global gas prices. This despite the fact that 77% of British Columbians favour renewable and clean-energy projects instead of LNG. In Australia, wholesale gas prices tripled, and U.S. households were paying 50 per cent more for their gas as LNG exports began. 

By contrast 81% of renewables offer cheaper energy than fossil fuels. Renewables also create far more jobs than oil and gas projects, it’s easier to localize renewable jobs in communities in places like Alberta and NL, and renewables are more reliable than oil and gas.

But all of this hasn’t stopped the Federal and Provincial Governments from wasting taxpayer money on dead-end LNG projects. LNG Canada received a precedent-setting incentive package, a policy framework from the BC government that includes corporate tax breaks, reduced rates for electricity consumption and interest-free deferral of provincial sales tax on construction, each valued at tens of millions of dollars every year. It also received $275 million in direct federal subsidies, and a federal exemption on steel tariffs, which cost taxpayers as much as $1 billion.

The Nova Scotia Provincial Government has also attempted to implement a series of U.S.-Style authoritarian measures in favour of fracking and lifted a ban on fracking without consulting the Assembly of Nova Scotia Mi’kmaw Chiefs. It was a protection adopted after consultation and engagement with Nova Scotians and backed by health and economic research.

Many First Nations have spoken out against fracking and LNG development because infrastructure for these massive industrial projects, such as pipelines, crosses their territories. For example, the Wet’suwet’en never gave consent for the Coastal Gas Link pipeline that was built to supply an LNG export terminal in Kitimat and several First Nations have not given consent to the Prince Rupert Gas Transmission that would supply the Ksi Lisims LNG project, also in Northern BC.

LNG interests, as with all fossil fuel interests, now rely heavily on maintaining the false appearance that there will be continued oil and gas expansion – an appearance propped up by Canadian taxpayer support. Because if people see the evidence beyond the spin investors will quickly realize reserves of oil and gas are overvalued.

In short, if Canada does not go renewable soon we risk being left behind to carry the weight of a lot of very unpopular and uneconomical gas projects. Because renewables create more jobs, and localize jobs, while helping protect the climate, it’s also best to power any data centres with renewables not gas. We already have renewable solutions for when the sun does not shine or the wind does not blow like interconnected grids, energy efficiency, and energy storage, but LNG prices are inherently volatile due to international factors beyond our control.