According to the International Energy Agency (IEA), global demand for natural gas increased by 4.6% in 2018. This was the eighth consecutive year of increase. Since 1990, global natural gas consumption has grown at an average of 6.3% per year. Consumption growth has been even stronger in China, averaging 13.1% per year over the past 20 years.
Most natural gas use is for heating buildings and generating electricity, but some consuming sectors have other uses for natural gas. The industrial sector uses natural gas as a fuel for process heating, in combined heat and power systems, and as a raw material (feedstock) to produce chemicals, fertilizer and hydrogen.
According to the BP Energy Outlook, the increase in demand for natural gas in the industrial sector is driven by developing economies as they continue to industrialize, especially in regions with large gas resources (Middle East, Africa). Switching from coal to gas is also a large part of gas demand, especially in China.
The electric power sector uses natural gas to generate electricity. In 2017, the electric power sector accounted for about 34% of US natural gas consumption, and natural gas was the source of about 26% of the US electric power sector's energy consumption.
The residential sector uses natural gas to heat buildings and water, to cook, and to dry clothes. About half of the homes in the US use natural gas for these purposes. In 2017, the residential sector accounted for about 16% of US natural gas consumption, and natural gas was the source of about 23% of the US residential sector's total energy consumption.
The commercial sector uses natural gas to heat buildings and water, to operate refrigeration and cooling equipment, to cook, to dry clothes, and to provide outdoor lighting. Some consumers in the commercial sector also use natural gas as a fuel in combined heat and power systems.
More and more the transportation sector uses natural gas as a fuel to operate compressors that move natural gas through pipelines and as a vehicle fuel in the form of compressed natural gas and liquefied natural gas. Nearly all vehicles that use natural gas as a fuel are in government and private vehicle fleets. In 2017, the transportation sector accounted for about 3% of total US natural gas consumption. Natural gas was the source of about 3% of the US transportation sector's energy consumption in 2017, of which 94% was for natural gas pipeline and distribution operations.