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    Transformations Towards Meeting the World’s Greatest Energy and Environmental Challenge

Summary

On the occasion of the Natural Gas Day 2019 held in Tokyo, Japan, June 12, the International Gas Union (IGU) and the Japan Gas Association are pleased to release this official communique in order to contribute to the efforts to fight climate change and clarify how natural gas can play a role in ensuring an economically and environmentally sustainable energy future.

by: IGU, Japan Gas Association

Posted in:

Complimentary, Natural Gas & LNG News, World, Liquified Natural Gas (LNG), Asia/Pacific, Renewables, Gas to Power, Corporate, Political

Transformations Towards Meeting the World’s Greatest Energy and Environmental Challenge

The continued changes in weather patterns and associated extreme weather events around the world are reinforcing the need for urgent and swift climate change mitigation action. It is a shared global responsibility to strengthen the international response to this challenge, to fight poor urban air quality, and to eradicate energy poverty.

In 2015, global leaders adopted two critical documents, expressing their commitments to carry this responsibility forward and to solve these great global challenges: the Paris Agreement and the UN “Sustainable Development Goals” (SDG’s). The world is approaching the first five-year milestone since these important commitments were adopted, and while progress has been made, we are not on track to meet the targets. This means that a course correction and urgent action are needed to ensure that this mutual responsibility is not forfeited.

The global community is at a turning point, as the world is facing vital energy challenges. Global demand is growing as new economies develop, and with that growth comes increasing pressure to reduce emissions and pollution. At the same time, the rapidly changing composition of the global energy mix is putting a premium on energy security and reliability around the world.

Finding a way to supply energy to more people, in a short time, while maintaining good air quality, protecting the climate, and ensuring affordability is one of the greatest challenges of our time. Getting to a sustainable energy future will require a continuous effort to reduce carbon intensity, increase efficiency, deploy more renewables, and clean transport. Natural gas is a key tool in helping to accomplish these goals.

Natural gas is an "affordable", "abundant", and "reliable" energy source with the lowest fossil fuel carbon and air pollutant emission factors. For this reason, Natural Gas is expected to be an energy that will significantly contribute to climate change mitigation and help achieve the SDG’s  – while strengthening competitiveness and national energy security around the world. 

The supply and demand of natural gas is expanding remarkably. According to the International Energy Agency, it is expected that natural gas will have the second largest share of the world's energy mix in 2030, after renewables. It is expected that this will result in increased LNG demand, particularly in Asia. Globally, it is also expected that the number of countries using LNG as a way of meeting their energy needs will also continue to increase, from the 29 countries in 2013 to  42 countries in 2018.

Although all major forecasts, point to the increased role of natural gas well into the future, this cannot be taken for granted.  In order to continue strong growth, the industry must focus on ensuring three core values: cost competitiveness, security of supply, and sustainability.

Cost Competitiveness– Improving the relative cost of gas to other energy sources through a combination of LNG cost efficiencies, pricing environmental externalities, and promotion of local gas production in markets around the world. This is especially important considering that over three quarters of forecast demand growth by 2040 comes from non-OECD regions. 

Security of Supply– Enabling gas supply security through the development of enhanced networks and infrastructure, more flexible commercial models, and new modular access-enabling technologies. Rapidly developing gas infrastructure in Asia and particularly Africa will be critical.

Sustainability– Promoting the environmental sustainability of gas through measures to reduce urban air pollution, develop higher efficiency and low carbon technologies for gas, integrate renewable gas sources like renewable, synthetic and hydrogen gases into existing infrastructure, and limit methane emissions.

Enhancing LNG trade

As the LNG market transitions from regional to truly global trade, there is a need for greater transparency and flexibility. Global supply and demand will need to be balanced, in order to avoid extreme conditions of price volatility and supply concerns.

With the growing globalisation of the LNG market, a single event in one region may affect other regions, and if the supply of LNG is disrupted it will have a global impact. In addition, certain countries, such as Japan and other Asian countries which experienced significant natural disasters in recent years, and are particularly sensitive to energy security requirements, are  keenly aware of the importance of having access to diverse and reliable supply. In this light, it is important to further expand a more transparent and liquid LNG market so that security of LNG supply can be further enhanced to play an even more important role in its resilience even in unexpected emergency situations.

Initiative of IGU and JGA

Based on the above, the IGU will strive to encourage and support industry actions to deliver:

(1) Strong commitment towards climate change mitigation and improvement of air quality;

(2) Further development of market mechanisms that support transparency and flexibility to natural gas markets; 

(3) Meaningful contributions to a sustainable future energy by promoting new value creation and achieving the goals of the Paris Agreement and the UN 2030 Development Agenda.

As a charter member of the IGU, representing Japan, the Japan Gas Association will continue to support IGU activities through 50-year knowledge and experience as an LNG importer country, and through technological development and innovation in the advanced gas application technology field, etc.

About the International Gas Union and Japan Gas Association

Since its founding in 1931, IGU has contributed the development and promotion of the world's gas industry in the field of energy, environment, international co-operation, and technology, as a non-profit international organisation which is composed of 94% of the world's gas market. 

As the charter member of IGU in Japan, the Japan Gas Association, taking advantage of the knowledge and experience as the world's largest LNG importer and advanced gas technology, has contributed over a long period of time to IGU activities through investigation and research of LNG, and through research, development and innovation activities.

The IGU mission is to continue to advance the global natural gas industry as a key contributor to the global progress in sustainable energy and environment. Together with its international community of members, across all five continents, the IGU contributes to the sound development the global gas industry and improvement in quality of life.