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What is Natural Gas?

What is natural gas? Is it possible to curb carbon emissions from this important energy source?
© Adam Smith Centre

Natural gas refers to a mixture of several hydrocarbons, containing 70-90 percent methane. It is a fossil fuel formed from decayed organic matter deep beneath the earth’s surface.

Engineers and scientists have developed a whole range of new fuels based on natural gas including liquified petroleum gas, compressed natural gas and liquified natural gas. Natural gas serves as a major fuel for heating, cooking, and electricity generation. According to the International Energy Agency (IEA), natural gas gives off between a third to 50% less carbon dioxide when burned compared to coal in terms of lifecycle emissions.

In 2018, the share of natural gas in the world’s energy mix had risen 6.8 percentage points since 1973. This was largely due to the 1973 oil crisis which spurred governments to diversify its energy mix. The improvement of drilling methods in the 1990s had also increased the yield of natural gas and its share in the global energy mix.

Global Share of Total Energy Supply by Source, 2018

This demand for natural gas is likely to grow, with the IEA forecasting global demand for natural gas to grow by 1.5 percent per year between 2021 and 2025.

While the US Energy Information Administration (EIA) considers natural gas as a clean source of energy, there are concerns about methane emissions. Methane gas can sometimes be leaked during the extraction, processing, and transportation of natural gas. However, these do diminish the overall beneficial impact of using more natural gas. In the IEA’s 2020 assessment of life-cycle emissions resulting from natural gas and coal supply, it concluded that “an estimated 98 percent of gas consumed today has a lower life-cycle emissions intensity than coal when used for power or heat.” Additionally, the IEA’s 2019 assessment found that about three-quarters of today’s methane emissions from the oil and gas industry can be controlled by deploying known technical fixes. These fixes can reduce methane emissions by up to 40 percent.

© Adam Smith Centre
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Climate Change and Public Policy

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