Gas, Naturally: An Interview with François-Régis Mouton
Natural Gas Europe was pleased to have the opportunity to connect with François-Régis Mouton, Chairman of GasNaturally.
Could you describe the importance of natural gas in Europe? Is the role of gas in transition?
Natural gas will remain an essential part of the energy mix. Replacing higher carbon fuels with gas now is the cheapest and fastest way to make a significant reduction in CO₂ emissions. Climate change is one of the biggest challenges facing humanity at the same time as there is rising energy demand. It is now widely acknowledged that our energy system has to evolve towards carbon neutrality. This means that a genuine transformation of the energy system has to take place, with technology breakthroughs, economic innovation, political courage and a change in culture. But what we need today is above all a clear vision on how to get there, and to do it in the most cost-effective way.
Where does natural gas stand with European policymakers?
Policymakers understand that natural gas already plays a large - but taken for granted - role and can play an even larger role in our future energy mix. Indeed, due to the economic crisis, competitiveness has become a major concern for them and there is a growing understanding that natural gas can be part of the solution to provide sustainable and affordable energy for European consumers. Climate change has remained on top of the policy agenda and, as investments in coal grew in 2012 (from 2% in 2011 to 13% of investments in power generation, therefore leading to less emissions reductions than in the US!), policymakers have noticed a growing disconnection between the climate imperative and energy demand trends. From this, it is clear that natural gas can represent a much cleaner option able to deliver CO₂ reductions at reasonable costs. It is also understood that natural gas is the ideal partner to renewable sources. Now it is urgent that the EU exits the new “Coal + Renewables paradigm” that it has seemed to favour since 2010.
What are the best arguments for using natural gas in Europe at this time?
“Gas makes a clean future real”, our motto says, and Europe’s gas supply is abundant, secure, and can be stored effectively in large quantities. In sum, it can help meet the three objectives of EU energy policy: competitiveness, CO₂ emissions reductions and security of supply. Developing gas is therefore a win-win solution for Europe.
What kinds of activities did GasNaturally initiate last year, what were your objectives through these initiatives and how successful were you in fulfilling them?
Our objectives were very clear: to enhance recognition amongst EU policymakers of the benefits of natural gas in the current energy mix, to contribute to policy discussions to remove policy barriers to the use of natural gas and to ensure a critical role for gas in Europe. To reach these objectives, we have been very active in feeding the debate with factual information and data about the benefits of natural gas, through our website (www.gasnaturally.eu) and our publications but also through Gas Week, a five-day event in the European Parliament in April last year. It was a great opportunity to address key issues, respond to policymakers and showcase our industry and technologies through an innovative exhibition, while initiating an exchange of views with the renewable industry, such as the Photovoltaic sector. We are already building on that success and preparing Gas Week 2013 in April and a programme of other activities throughout the year, including a Gas Forum for Member States in November, under the patronage of the incoming Lithuanian Presidency of the EU.
How do you see the role of natural gas going forward? Should it be used for more than complementing renewables?
In 2013, gas is “the fuel of reason”. It can replace coal in base-load power generation and be the ideal partner for renewables. Power supply from renewables can be variable and this can cause grid instability, whereas gas can provide back-up capacity to balance out variability. This is a perfect fit! Indeed, natural gas is the ideal grid balancing resource as it is easy to store and can respond swiftly to sharp load and demand changes on the power grid.
On the longer term, gas will continue to be used for mid and base load and more for peak load to back up variable renewables. A whole range of innovations will mean that gas will continue to contribute to the EU energy objectives. For example, excess power generated by renewables when there is not high enough demand from the grid can be transformed, through water electrolysis, into Hydrogen or even Methane, which can be stored into the gas pipeline system. This is what we call ‘Power-to-Gas’. This is a very exciting prospect, as the rise in renewable energy production has turned energy storage into a major challenge.
What is the key to Europe making more investments in gas-fired power generation?
Dispatchable and flexible CCGTs have got a crucial role to play in assuring a low carbon generation back-up to variable renewables. But the investments in gas-fired power stations need to be economical, which is no longer the case in Europe today. Therefore, a predictable and stable long-term investment framework with clear political signals is needed. Rethinking the EU electricity market design also seems necessary.
Greens usually point out that natural gas is still a hydrocarbon. How would you convince them of gas' charms?
Gas is indeed a fossil fuel, but it is the cleanest hydrocarbon fuel. It produces much less CO₂ (50% less than coal for instance) or harmful emissions (including particulate emissions) than any other hydrocarbon fuels. Gas will make a clean future real and is here to stay. The gas industry may be mature but it is committed to remaining innovative and making investments in R&D and developing technology that will help optimize the use of gas and reduce its impacts.
In light of the decreased carbon emissions in the US, where does Europe stand in terms of CO2 emissions? Should we follow the Americans' lead? Why or why not?
The IEA reported a drop in CO₂ emissions of 450 million tonnes over the past five years in the United States. This decrease can largely be attributed to the rising use of gas in the US electricity mix, from 21.6% in 1997 to 29.4% in 2012. GasNaturally would very much welcome a higher share of gas for power production in the EU, as it would significantly help reduce emissions. On the issue of shale gas in Europe, for the moment, although there are potentially sizeable volumes of shale gas in the EU, these have not yet been quantified. The risks related to shale gas extraction are known to the industry and well integrity is ensured through respecting regulations and good industry practices. Finally, GasNaturally is looking forward to a communication of the Commission on Shale Gas, which is awaited in the course of 2013, and trusts it will help balance the debate, clear the remaining uncertainties and finally pave the way towards an increase in public acceptance.
What developments in the natural gas business last year have been the most exciting for you?
We have seen rising prospects for diversification of gas sources for the EU in 2012. For example, Poland’s decision to build an LNG terminal on its Baltic coast in November could change the dynamics of energy supply for the country and Central and Eastern Europe. In 2012, some important steps have also been taken towards the realisation of the Southern Gas Corridor. The decision on the final route, expected in June this year, will be a landmark for diversification and security of gas supply in Europe.
How would you evaluate the success of GasNaturally in 2012?
GasNaturally has been successful in raising awareness about natural gas and its benefits, while uniting the entire gas chain in this advocacy, which is now speaking up with a unified voice. We are establishing ourselves as the first port of call for any gas-related matters. The key objective was achieved: gas was referenced in the EU Energy Roadmap 2050 as a “critical energy source for the future”, and this message was reinforced in the Presidency Conclusions in June 2012. But this is only the beginning, and much more work remains to be done!