Editorial: Gas is the pragmatic element of a non-ideal but achievable energy transition [LNG Condensed]
Many of the key technologies are well established and affordable, most notably wind and solar power, while a hydrogen sector is emerging which, it is hoped, will deliver the know-how and equipment to decarbonize industrial processes and gas systems more broadly.
All this is positive in a world currently lacking much optimism as a result of the coronavirus pandemic and the challenge presented by climate change, but it is also worth looking at the big numbers because there are three real problems facing the ‘ideal’ energy transition: time, scale and money.
Emissions reductions need to be achieved quickly – over the next 30 years – if the rise in global temperatures, with its attendant risks and uncertainties, is to be kept to below 2° Celsius above pre-industrial levels.
Last year, low carbon energy sources -- renewables, including large hydro, and nuclear -- provided only 15.7% of the world’s primary energy consumption. Within this, biomass burning, which has dubious environmental credentials, particularly over a 30-year timeframe, formed a significant part.
From 2018 to 2019, the share of these low carbon energy sources was up only 0.5% from 15.2%. The rate of expansion is simply not fast enough to achieve the ideal energy transition.
For different reasons, both hydro and nuclear have only limited growth potential, which implies a much larger and rapid expansion of wind and solar, not to mention the need for GWs of electrolyser capacity at a time when the biggest project on the table is only 20 MW.
Yet there is a much quicker and more immediate option, which should in no way replace support for renewable energy technologies, but accompany it.
A large part of oil and coal use, which provides 57.2% of primary energy consumption, could be displaced with gas, which presently accounts for only 24.2% of primary energy consumption. Why? Because it is much less emissions intensive, it is abundant, it is affordable and it is a big industry which can mobilise capital and deploy its technologies at scale within the timeframe required.
This is not the ideal energy transition, but it is an achievable energy transition. For many environmentalists, it would be a retrograde step because it implies the expansion of a fossil fuel industry rather than a contraction and this view is understandable.
But the world is not an ideal place and the renewable energy supply chains, while much larger than ever before, need to grow much faster.
LNG-to-power supply chains can provide lower emissions electricity generation quickly and at scale to economies dependent on coal. By bringing down the average emissions per kWh of electricity generated, in tandem with renewables, they can provide the huge flows of despatchable electricity required to foster greater electrification, allowing the displacement of oil in transport.
Moreover, LNG-to-power supply chains bring with them the pipelines and mass distribution systems that will enable gas decarbonisation via biomethane and hydrogen.
And while it is pragmatic rather than ideal, just as the expansion of renewables requires financial and policy support, so too does the expansion of natural gas. Huge parts of the world dependent on oil and coal do not have access to gas. Natural gas needs to be part of green growth, specifically targeted at areas where it directly displaces coal and oil.
And to encourage that, carbon pricing should be extended so that the cost of any fuel used reflects not just its market price but its environmental and social impact. Gas has nothing to fear from carbon pricing because it is the cleanest of fossil fuels and can eat into the more than 200 exajoules of energy the world consumes as oil and coal every year.
It is easy to see why environmental campaigners oppose the expansion of a fossil fuel industry, but there has to be some pragmatism which is reflected in policy.
The cleanest affordable option should always take priority, but given the scale and timing of the challenge, every opportunity should also be taken to replace any energy source with a cleaner alternative, even if it is not the perfect solution. That is why multilaterals, international development banks and governments must make space in their recovery and green growth spending for natural gas. -- NGW