06/12/2025 | News release | Distributed by Public on 06/12/2025 09:15
Welcome to the 2040s.
In the decade that will take us to the mid-century, our world will be very different, and so will our energy needs.
The planet will be home to at least a billion more people, with a population well over nine billion. The world's economic output, if it follows recent decades, will add the equivalent of another U.S. economy, spread largely across Asia and the global south, with all the energy demands that go with it. Add to that something entirely new-the world of artificial intelligence at mass scale, with computing needs that, for now, seem incomputable. By one estimate, we will need 4,000 more terawatt hours of power to run this emerging data centre economy; that's equivalent to 15% of the world's electricity generation today.1
Another step change in energy demand may require more of every practical and affordable energy source, but the greatest expectations may be placed on natural gas. It's expected to become the world's dominant energy form, surpassing oil, having already grown in supply by 70% in the first quarter of the 21st century.2 The advent of liquefied natural gas, and supertankers to carry super-chilled LNG across oceans, has transformed the gas outlook even more. In a little over a decade, the United States has transformed itself from amongst the world's largest gas importers, to the world's largest LNG exporter.
As oil was to the 20th century, gas may be as critical to the 21st, but not without strategic choices that are already challenging the world. Russa's invasion of Ukraine, and its weaponization of gas to weaken Europe, is just one indication of how the world's rapidly growing reliance on gas has put energy security at risk. Rapidly growing and urbanizing countries across much of the world have found their dependence on imported gas to present further risks. The West's growing ambition to reshore manufacturing, and remilitarize, may require more gas, too, as a reliable and affordable concentrated energy source.
Few bodies may be better suited to address these challenges than the G7, the group of leading liberal democracies (the United States, Canada, the U.K., France, Germany, Italy and Japan) that is meeting June 15-17 in Kananaskis, Alberta. Atop the group's agenda: energy security.
The G7 was formed 50 years ago, in the mid-1970s, in response to similar disruptions to the global economy caused by an oil shock and ensuing conflicts. Today, the alliance faces new challenges, particularly from China and Russia, and may find opportunities in reasserting itself through an approach to democratic and decarbonized natural gas for a fast-changing world.
Properly managed, the G7 and key allies such as Australia and South Korea, known as G7+, can create stronger alliances with emerging markets, especially in Asia, stabilize energy prices and strengthen long-term global growth. It could even provide a bridge to lower energy emissions, by displacing coal. Led by the European Union's 107 million tonnes per annum (mtpa) and Japan's 64 million mtpa of LNG consumption, the G7+ consumes 227 mtpa, or 51% of global demand. That exceeds the 179 mtpa currently produced by the U.S. and Australia.
By 2040, however, the G7+ gas trade balance could reverse such that its supply far exceeds the demand of its members and allies-by almost 150 mtpa-requiring the Western-led alliance to secure new markets. China is expected to be, by far, the largest purchaser of LNG in 2040 (163 mtpa, from 79 mtpa in 2024, according to Rystad Energy's base case). But trade frictions with North America could result in Chinese LNG imports diversifying away from American sources.
For the G7, other allies will be critical to ensure a greater balance between supply and demand. India is often seen as a vital long-term prospect for G7+ exports, with projected demand of 63 mtpa. But other emerging Asian markets such as Pakistan, Bangladesh, Thailand and Indonesia will be essential, too, as they're projected to consume a combined 219 mtpa by 2040. In a potential world where the Chinese market is inaccessible to the U.S., and India follows its own path-prioritizing price above all else, perhaps from Russian supplies-Asian demand will be vital to any G7+ strategy.
With all these forces at play, the world almost certainly will need more gas in 2040-but just how much will be needed?
To map out potential pathways, RBC Thought Leadership and Oslo-based Rystad Energy developed a novel research methodology to outline plausible scenarios for the 2040s, knowing the trajectory of growth will be critical to the mid-century condition of our world. Each was shaped by geopolitical alignments, climate policy ambitions and market dynamics. We then worked with a range of policy experts to assess the risks in each scenario, and develop broader policy options.
The outcomes suggested by each scenario are profoundly different. The range of our pathways shows that total global gas exports could grow from 411 mtpa in 2024 to as high as 737 mtpa by 2050-or shrink to just 366 mtpa. The net swing of 371 mtpa is nearly equivalent to current LNG exports.
The difference depends on whether the world develops more structured markets for gas, finds ways to connect fast-growing markets with reliable (and democratic) suppliers, and invests in technologies to cut emissions. The environmental attributes of this future gas supply-including the scale of transition to capture carbon and low-carbon derivative fuels like hydrogen and ammonia-will have a major impact on the direction of climate change, as methane emissions from gas are widely considered to be more dangerous to global warming than carbon, even though they're also easier to contain.