Gas industry is rebounding, international agency says

Gas will grow faster than oil and coal during the next five years because of demand from China and other developing economies, according to a report from the International Energy Agency.
And this will be good news to Pennsylvania, the second-largest gas-producing state in the country. Washington is the largest gas-producing county in the state, Greene is fourth and Fayette is 10th, officials said.
The Paris-based IEA — formed in 1974 during the oil crisis to promote energy security and to provide research and analysis among its 29 member countries, including most of Europe, as well as the United States, Canada, Japan and South Korea — said 90 percent of the demand is from China and developing economies.
“The continuing development of the Marcellus and Utica shales is being supported by the extension of the pipeline infrastructure from the Appalachian region to ship more gas to markets in the Northeast, Midwest and Southeast regions of the United States and Eastern Canada,” the report said.
“Although US domestic demand for gas is growing due to increased demand in the industry, more than half of the production will be turned into LNG (liquefied natural gas) for export. By the end of our forecast period, the United States will be well on course to challenging Australia and Qatar for global leadership among LNG exporters.”
The report noted that countries such as Mexico, China and Egypt are transforming their markets to allow privately held companies to participate in the supply, transport and marketing of gas. These changes, in turn, will lead to more investments in the supply chain, as well as more demand.
“Gas demand in China is forecast to rise by 8.7 percent per year to 2022, assisted by the policy drive to improve air quality. China’s 13 Five-Year Plan provides strong policy support for gas, helping it to counter tough competition from coal in almost every sector,” IEA said. “Replacing coal in power generation, household heating and industrial applications, such as textile, food and other types of manufacturing have the potential to substantially boost the use of gas in China.”
The IEA said longer-term risks to gas security could arise from a shortage in instrastructure, such as pipelines. But, that can be offset by brownfield expansions of existing facilities in the US could provide a safety valve since they could bring new gas to markets quickly if the need arises.