From the editor [GasTransitions]
The recession that may be awaiting us will presumably result in lower energy demand and therefore persistently lower energy prices. However, if governments and central banks across the world enact the massive stimulus packages they have announced, deflation could well turn into inflation. We could even get to a point where people lose their faith in the value of their currencies, in which case they may flee into commodities as a safe haven.
None of these developments is likely to push the climate issue permanently off the table. Psychologically, the corona crisis may even act as a wake-up call for the climate crisis. We have heard from many sides that humanity is looking increasingly vulnerable in the face of various environmental threats. But such warnings do not register with most people until they experience them. And although corona is not a climate issue, it will make it real to people what a global crisis could look like. People in California and Australia and other places hit by fires and floods already knew of course.
This means we can expect the transition to a low-carbon future to continue and the gas industry, if it wants to prosper, will have to evolve along with it. In the short term, this means above all tackling methane emissions – a make or break issue, as Charles Ellinas recently pointed out in NGW Magazine. Indeed, according to Bruce Robertson of the Institute for Energy Economics and Analysis (IEEFA), with methane emissions at the level they are at now, the industry’s claim that gas emits 50% less greenhouse gas emissions than coal simply won’t wash. Robertson even speculates that the gas industry, if it does not take prompt action, will soon meet its “Volkswagen moment”. See article on page 20.
For the industry’s longer-term survival, the magic word of course is hydrogen. Australia’s Chief Scientist Alan Finkel, who was in charge of the country’s National Hydrogen Strategy adopted last year by the energy ministers of the Australian state governments, does not hesitate to call hydrogen a “hero”. In an exclusive interview with Gas Transitions, Finkel sets out a bold vision of how “green hydrogen”, based on solar and wind power, will even replace LNG as Australia’s main commodity export product.
But Finkel also believes that “blue hydrogen”, based on natural gas and coal, in combination with CCS, will become a permanent part of the energy mix. He has an original argument for this: we need blue hydrogen, he says, not because there is not enough renewable energy, but for security of supply reasons. It is too risky, he notes, to depend entirely on solar and wind power, in view of the complex resource and supply chains they depend on. Don’t miss our interview with Finkel on page 4.
If Finkel is right, it does mean, though, that the gas industry should start to get cracking on CCS. This also happens to be the inescapable conclusion from an influential report made by consultancy AFRY, commissioned by the Portuguese Natural Gas Association AGN. The report was instrumental in helping to convince the Portuguese government to drop the all-electronic decarbonisation pathway it had been travelling on and to embrace zero-carbon gases as a key part of the country’s energy future.
However, as AFRY’s Dorian de Kermadec, one of the authors of the report, points out: the zero-carbon gas pathway will only be viable if the industry manages to develop a CCS network that will have to extend all the way to the North Sea. Not an easy challenge. For more, see the article on page 17.
Gas Transitions will of course continue to report on developments in “blue” and “green” hydrogen and other transition issues affecting the natural gas industry. Many of those issues were discussed at a high level at the World Hydrogen Fuels Summit on 10-11 March in Amsterdam, one of the last conferences to be held before corona closed in on us. You can read our report on this event on page 8.
Thank you very much for your interest in Gas Transitions. Keep safe and do let us know if you have comments or suggestions!
Karel Beckman, editor-in-chief,