"No gas, no affordable transition," gas exporters say
Without natural gas, the affordable transition to a net-zero carbon world cannot happen, the Gas Exporting Countries Forum said May 20.
As an "abundant, affordable and clean hydrocarbon source," natural gas has a central role to play in the energy transition "while simultaneously supporting progress on several sustainable development dimensions including the guardianship of ecosystems, human health, and the economy," it said.
The International Energy Agency said in a May 19 report that there was already enough oil and gas investment to meet demand, while accepting that OPEC countries would meet over half the world's demand for oil, the price of which would drop with demand.
Assessing the totality of national promises and policies, IEA said this was the best way to meet the 2050 target, which had many commentators questioning the change of tack: gas had been an essential enabler for the energy transition, according to the IEA.
GECF however disagrees with the IEA's change of tack, and pointed out measures already taken to decarbonise upstream. The GECF’s in-house developed Reference Case Scenario (RCS) implies a realistic approach when it comes to governments – including some of the most energy-poor nations – increasing their ambitions from current Nationally Determined Contributions (NDCs) and net zero pledges. Like the IEA, the RCS takes into account adopted and announced national energy policies, while building its long-term assumptions. The RCS however also takes in "pragmatic assessment of policies’ implementation as well as progress in technologies that support carbon mitigation."
Based on the latest estimates in the GECF RCS, global primary energy demand is projected to increase by 24% over the next three decades, boosted by cumulative economic and population growth drivers. Fossil fuels are projected to remain dominant, accounting for 71% of the global energy mix in 2050. According to the latest GECF estimates, natural gas will become the leading source in the global energy mix by mid-century, increasing its share from 23% today to 28%.
Net zero pathways rely on as-yet unavailable technologies, a challenge further exacerbated when considering the developing countries that have no access to technologies and financial resources.
GECF estimates that total gas investment between 2020 and 2050 will reach about $10 trillion, a compound annual growth rate of 1.26% from a total of $258bn in 2020 to $375bn in 2050.