The International Energy Agency has emphasized the need for new gas investments to address growing energy demands while meeting emissions reductions pledges across the globe.
In the report, the organization lays out three different scenarios – the Stated Policies Scenario (STEPS); the Announced Pledges Scenario (APS) and the Net Zero Emissions by 2050 Scenario (NZE) -, all of which require upstream investment.
Investments of up to $280 billion across the entire gas value chain will be required in the STEPS while $240 billion worth of new investments in upstream projects will be needed in the APS to address the current global energy crisis and to meet decarbonization targets. Meanwhile, in the NZE, the IEA indicates that up to $200 billion will be required for the global market to maintain production in existing upstream gas fields and in already approved projects awaiting commissioning.
In the near-term, natural gas prices are anticipated to remain volatile owing to shifts in global supply chains and rising demand in Asia and Europe.
According to the IEA, “The crisis has reminded policy makers and energy consumers of the immediate importance of stable and affordable natural gas supplies. The traditional arguments in favor of gas — its role as a reliable partner to the clean energy transition and its ability to step in to fill the gap left by declining coal and oil — are also being tested.”