Analysis for Global Natural Gas

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Executive Summary

Natural gas is the dominant energy resource, experiencing significant growth and playing a critical role in meeting the world’s growing energy demands.
The global natural gas market is interconnected, with major players like the US, Russia, and China significantly influencing production, consumption, imports, and exports.
Countries like Norway, Angola, and Mozambique exhibit high self-sufficiency ratios, while others, such as Serbia, India, and the Netherlands, face challenges in achieving self-sufficiency.
The analysis highlights the importance of considering both domestic production and international trade in developing effective energy strategies for long-term security and sustainability.

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Figure 1 Top 5 Global Energy Production

_{Source: World Energy Statistic from OCED Library; Made by Yuanyuan Liu}

Natural gas is the dominant and rapidly growing energy resource in the world, while all other energy resources have much lower production levels.

According to World Energy Statistics, Figure 1 indicates that natural gas is the most dominant energy resource, with a significantly larger scale than all other energy resources. It is noteworthy that natural gas has experienced substantial growth compared to other energy resources, including electricity, heat, wind, nuclear, and charcoal. Specifically, natural gas production has been growing rapidly since 2018, reaching over 200,000 thousand TJ. On the other hand, all other energy resources have much lower levels of production (lower than 50,000 thousand TJ) than natural gas, indicating that natural gas is a crucial energy resource for the world. To develop effective energy strategies for long-term security and sustainability, it is crucial to thoroughly examine natural gas production, consumption, imports, and exports worldwide, as these factors contribute to a comprehensive understanding of the global energy landscape.

Figure 2 Percentage of Flow for Natural Gas in 2021

_{Source: World-Natural Gas Statistic from OECD Library; Made by Yuanyuan Liu}

The global natural gas market is balanced between production and consumption, with significant trade flows between countries.

The levels of natural gas production and gross inland consumption are quite similar, with production accounting for 37.69% and consumption accounting for 38.11% of the total value (Figure 2). This indicates that the global natural gas market is relatively balanced between production and consumption, with a strong emphasis on meeting the growing energy demands of the world. Furthermore, the pie chart shows that the levels of total exports and total imports are also similar, accounting for 11.96% and 12.24% of the total value, respectively.

The balance indicates that the natural gas market is highly interconnected, with significant trade flows between countries.

Figure 3: Natural Gas Indigenous Production in 2021

Figure 4 Natural Gas Consumption in 2021

Figure 5 Natural Gas Imports in 2021

Figure 6 Natural Gas Exports in 2021

_{Source: World-Natural Gas Statistic from OECD Library; Made by Yuanyuan Liu}

Russia and the US dominate the global natural gas market as both producers and traders, while China’s high imports and low exports reflect its efforts to diversify its energy sources and reduce reliance on coal.

The top 5 importing countries include China, Japan, Germany, US, and Italy, while the top 5 exporting countries are Russia, US, Qatar, Norway, and Australia (Figure 5). The top 5 producers and consumers are US, Russia, Iran, China, and Canada, with only Iran and China switching places between the two categories (Figure 4).

It is worth noting that Russia occupies the second position in both production and consumption, while leading in exports. Similarly, the US is the leading producer and consumer of natural gas worldwide, while ranking second in exports and fourth in imports (Figure 3-6). This suggests that the US has a significant impact on the global natural gas market, both as a producer and as a trader.

Interestingly, China, the top importing country, is not among the top 10 exporting countries, indicating a reliance on imports rather than domestic production to satisfy its needs. China’s high imports, production, and consumption and low exports can be attributed to its energy security strategy. As the world’s most populous country and second-largest economy, China has experienced a rapid growth in energy demand in recent years. In response, the Chinese government has adopted a “diversification and conservation” approach to its energy policy, which includes increasing domestic production, investing in renewable energy sources, and importing natural gas from abroad.

The high level of natural gas imports by China reflects its efforts to diversify its energy supply sources and reduce its dependence on coal, which has been a major contributor to air pollution and greenhouse gas emissions in the country. At the same time, China has been investing heavily in domestic natural gas production, with the goal of increasing its self-sufficiency and reducing its reliance on foreign suppliers.

Figure 7 Natural Gas Self-sufficiency Before Trade in 2021

_{Source: World-Natural Gas Statistic from OECD Library; Made by Yuanyuan Liu}

Figure 8 Top 10 Countries Natural Gas Self-sufficiency Before Trade in 2021

_{Source: World-Natural Gas Statistic from OECD Library; Made by Yuanyuan Liu}

The top 5 countries achieving self-sufficiency before trade are Norway, Angola, Mozambique, Myanmar, and Bolivia, with Norway having the highest production level 20 times greater than consumption.

Self Sufficiency Before Trade = Indigenous Production / Gross Inland Consumption

According to Figure 7 and Figure 8, the top 5 countries that achieved self-sufficiency before trade in 2021 are Norway, Angola, Mozambique, Myanmar, and Bolivia. Among these, Norway stands out with a production level that is 20 times higher than its consumption, highlighting the country’s reliance on natural gas as a major energy source.

Similarly, Angola and Mozambique show high levels of self-sufficiency with 5 times more production than consumption. These countries may have significant natural gas reserves or prioritize domestic production to meet their energy needs.

Overall, the top 10 countries with the highest levels of self-sufficiency before trade have more than 2.5 times the production level than their consumption level, indicating a relatively higher reliance on natural gas as a primary energy source.

These countries may possess significant natural gas reserves or prioritize domestic production to meet their energy needs, reinforcing the need for a comprehensive approach to energy strategy.

Figure 9 Top 10 Countries Natural Gas Self-sufficiency After Trade in 2021

Figure 10 Bottom 10 Countries Natural Gas Self-sufficiency After Trade in 2021

_{Source: World-Natural Gas Statistic from OECD Library; Made by Yuanyuan Liu}

Mexico leads the top 5 countries that achieve self-sufficiency after accounting for trade, while Denmark, Slovakia, and Austria have self-sufficiency ratios of less than 0.75, making them heavily reliant on external sources for natural gas.

Self Sufficiency After Trade = Indigenous Production+ Total imports - Total exports / Gross Inland Consumption

Accoring to Figure 9 and Figure 10, after accounting for trade, the top five countries that can achieve self-sufficiency in natural gas are Mexico, Colombia, Venezuela, Iraq, and Egypt. Each of these countries has a self-sufficiency ratio greater than 1, indicating that their indigenous production, plus imports, minus exports, can cover their consumption needs. Remarkably, Mexico leads the pack, with a self-sufficiency ratio of approximately 2, meaning its available natural gas resources are about double its consumption. The other top countries have ratios between 1.0 and 1.5, reflecting a strong position in meeting their natural gas demands.

Conversely, the ten countries with the lowest self-sufficiency ratios after trade include Serbia, India, Mozambique, Ukraine, the Netherlands, Hungary, Austria, Slovakia, and Denmark. The data from the OECD highlights that the last three countries, in particular, have self-sufficiency ratios of less than 0.75. This suggests that their indigenous production, imports, and exports combined can cover less than 75% of their consumption needs, making them heavily reliant on external sources for natural gas.

Interestingly, before trade, Mozambique and Myanmar can achieve self-sufficiency. However, after accounting for trade, their total natural gas resources fall short of meeting their consumption requirements. This observation highlights the critical role that trade plays in influencing a country’s energy security and self-sufficiency. It also emphasizes the importance of considering both domestic production and international trade when evaluating a nation’s energy strategy and long-term sustainability.

Analysis for Global Natural Gas

Yuanyuan Liu

Executive Summary

Figure 1 Top 5 Global Energy Production

Figure 2 Percentage of Flow for Natural Gas in 2021

Figure 3: Natural Gas Indigenous Production in 2021

Figure 4 Natural Gas Consumption in 2021

Figure 5 Natural Gas Imports in 2021

Figure 6 Natural Gas Exports in 2021

Figure 7 Natural Gas Self-sufficiency Before Trade in 2021

Figure 8 Top 10 Countries Natural Gas Self-sufficiency Before Trade in 2021

Figure 9 Top 10 Countries Natural Gas Self-sufficiency After Trade in 2021

Figure 10 Bottom 10 Countries Natural Gas Self-sufficiency After Trade in 2021

Conclusion

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