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Natural gas overview for world economy: From primary supply to final demand via global supply chains

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  • Kan, S.Y.
  • Chen, B.
  • Wu, X.F.
  • Chen, Z.M.
  • Chen, G.Q.

Abstract

As the world is smoothing the transition towards a low-carbon energy structure, natural gas has occupied a critical position in global energy supply. Also, globalization has catalyzed ever-increasing indirect energy flows in international trade. In order to present a comprehensive overview of natural gas use in globalized economy, this paper applies the systems multi-regional input-output (MRIO) analysis to track natural gas use from primary suppliers to final consumers via the links by producers in the world economy, supported by typical statistics for the year of 2011. Natural gas embodied in international trade is revealed amounting to 2722.1 bcm, in magnitude up to 90% of total gas extraction for energy use, indicating the intensive relocation of gas use by trade. 83% of traded embodied natural gas is associated with intermediate trade, mainly from leading primary suppliers, including Russia, USA and Western Asia, to dominant final consumers, like USA, EU27 and East Asia. Significant differences are found between direct and embodied natural gas flows. Consumption-based resource efficiency can break the illusion of efficiency improvements, and trade imbalance in terms of gas use can be opposite to the trade imbalance in conventional monetary terms. This paper has constructed a comprehensive analytical framework to trace natural gas flows in globalized economy for the first time, aiming to provide new insights for policy making.

Suggested Citation

  • Kan, S.Y. & Chen, B. & Wu, X.F. & Chen, Z.M. & Chen, G.Q., 2019. "Natural gas overview for world economy: From primary supply to final demand via global supply chains," Energy Policy, Elsevier, vol. 124(C), pages 215-225.
    • Handle: RePEc:eee:enepol:v:124:y:2019:i:c:p:215-225
    DOI: 10.1016/j.enpol.2018.10.002
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