One year after the first major COVID-19-related declines, gasoline demand improves. But recovery toward pre-pandemi… https://t.co/BQYs9RcKZe
CERAWeek: Industry leaders stress need for gas in lower-carbon future
Natural gas will play an indispensable role in advancing the global energy transition, a trio of gas industry executives operating on three continents agreed during a CERAWeek by IHS Markit panel.
From urban electricity infrastructure and carbon emissions-cutting to liquefied natural gas (LNG), the commodity will work as an essential part of energy systems globally, said the executives, representing companies with operations in India, Europe, and the US.
The executives were part of a panel discussion called "The Role of Gas in the Energy Future," which took place on 3 March. The panel, like all CERAWeek events this year, took place online, given the ongoing restrictions on travel and public gatherings related to the COVID-19 pandemic—itself a crucial factor in current global gas sector dynamics.
India plans to grow the share of gas in its overall power supply to 15% by 2030, a nearly threefold increase from current levels at about 6%, said E.S. Ranganathan, marketing director at Gas Authority of India Limited (GAIL).
"GAIL wants to be part of that transition," Ranganathan said.
GAIL's part in India's gas uptake will focus mostly on gas-based urban power generation, or "citygas," Ranganathan said. Greater citygas growth will translate into more stable prices, as well as reliable, and lower carbon, power supplies. India currently sources two-thirds of its power supply from coal-fired plants, Ranganathan said.
GAIL's status as a government-owned company will provide direct support for the Indian government's goals to cut emissions and modernize its power sector infrastructure. When it comes to LNG, India relies on imports for 55% of the country's total gas needs.
That 6% share of the generation stack for gas is low by global standards, so GAIL has an opportunity for strong growth in gas consumption, suggested Simon Blakey, a global gas advisor at IHS Markit. Blakey moderated the panel.
Spain has likewise benefited from LNG's growth globally. Beginning in the 1980s, gas' slice of the generation mix grew from a level similar to India's current position to more than 20% today, said Tomás García Blanco, an executive managing director for exploration and production at the Spanish energy company Repsol.
The move from higher-carbon energy, like coal, to lower-carbon gas is a key Repsol objective, as companies, especially climate-minded ones based in Europe, seek to burnish their environmental credentials.
"That's the key point: the transition from coal to gas," Blanco emphasized. The company in January 2019 committed to a net-zero emissions balance by 2050, an early mover in a trend that to date has seen approximately 130 countries announce future carbon neutrality targets.
The US is carving out its own climate path, not least through the market-changing—and volatile—nature of its LNG industry, according to panelist Michael Smith, CEO and founder of Freeport LNG. The year of the pandemic saw US LNG production volumes swing from 10 Bcf/d in March, at the start of COVID-19 lockdowns, to 3 Bcf/d in August, before finishing the year at record rates of 12 Bcf/d.
Those numbers reflected market swings and the need for LNG flexibility, the "number-one selling point" for US LNG supplies globally, Smith said.
Last year "proved how critical the US is for balancing the global market," Smith said.
US LNG helped alleviate a recent supply crunch in Northeast Asia, where prices soared above $30/MMBtu in January.
When it comes to the energy transition, Blanco stressed the speed of change—and the importance of hydrocarbons like gas in assisting that shift.
"Who would have thought, 10 years ago, that we would be talking about peak oil demand? Or five years ago, that we would be talking about peak gas?" Nonetheless, "the upstream will be needed in this energy transition," Blanco said.
Original reporting by William Fleeson.
- Biden tax plan chops fossil fuel subsidies to ramp up renewables
- White House seeks $14 bil to fund climate-related initiatives in budget request
- Puerto Rico weighs options for expanding renewable power, hardening grid
- Swiss asset manager FiveT launches fund to scale up "clean hydrogen” infrastructure
- South Korean conglomerates to invest $38 billion to boost hydrogen economy
- Canadian pension affiliate grabs 3.4 GW share of Spanish PV boom
- Kerry stresses "decade of decision" on global climate engagement
- International Monetary Fund, World Bank emphasize climate commitments