Europe will need to rely more on its storage and on alternative supply— mostly LNG
“ According to International Gas Union’s Global Gas Report 2024, a Switzerland-based industry organization, the world will face a 20 percent shortfall in natural gas supply by the end of the decade…”
Europe will need to rely more on its storage and on alternative supply— mostly LNG — increasing storage refill needs in the following summer. The loss of the transit would result in a loss of around 6 billion cubic meters of gas supply into the EU in the first quarter of 2025 and would necessitate higher European LNG imports, which would drive stronger competition with Asian buyers for flexible LNG cargoes and lead to tighter market fundamentals.
The Future Is Expected to be Worse for Natural Gas Supply
According to the International Gas Union’s Global Gas Report 2024, a Switzerland-based industry organization, the world will face a 20 percent shortfall in natural gas supply by the end of the decade if significant increases in supply and infrastructure are not achieved.
If global demand for natural gas continues to rise as it did over the past four years, and production does not expand accordingly, a 22 percent global supply deficit is anticipated by 2030. This shortfall is attributed to the underestimation of rising global energy consumption in various net-zero carbon scenarios. It appears that recent increases in energy use, particularly from data centers and cooling, may not have been fully considered in the decarbonization models used by policymakers.
Despite this outlook, the Biden-Harris administration remains committed to pausing domestic LNG infrastructure development as mentioned above, a stance supported by anti-fossil fuel energy groups. Paradoxically, making natural gas more difficult to produce, transport, and use simply induces the longer use of coal by many nations and their industries that need reliable and affordable energy.
Conclusion
Global natural gas demand is expected to reach a record this year and a new record next year. The global gas balance, however, is “fragile” as limited LNG production growth keeps supply tight amid rising global demand. The situation is exacerbated by the Biden-Harris pause on new LNG facilities, as the administration’s Department of Energy says it needs time to update the economic and environmental studies it uses to decide whether approving additional exports is in the public interest.
The United States is the largest LNG exporter and natural gas producer, but further LNG investments require certainty of government policy, which has been shaken by the “pause.”
The Daily Caller says that the pause may be a major act of deception because an independent group called Government Accountability and Oversight (GAO) reveals the administration may have actually conducted — or started to conduct — such a review in 2023 before effectively burying it because it may have been producing a politically inconvenient conclusion.
Our major allies in Europe may need the LNG that the Biden-Harris administration is withholding as they refill their storage units after this winter and in the future.
