Speaking at a panel discussion at ADIPEC last week Vice President LNG and Economy, Gas Division for Total Jean Jaylet and Climate Change Advisor for Shell David Hone presented cogent arguments in favour of facilitating an environmentally-friendly future in which gas is the main energy source.
Adamant about natural gas’s critical role in lowering global CO2 emissions, Jaylet and Hone focused their suggestions for the industry around carbon pricing, gas industry innovations, and its complementary nature with renewables. Considering the COP21 agreement, Jaylet contends that gas has a massive role to play in the future envisioned by the Paris conference. He laid out that this is because gas is:
“Gas has the potential to become the largest primary source of power,” Jaylet said. The advent of LNG technologies will further open the market, “especially the use of floating storage and regasification units and small-scale LNG,” he detailed. LNG bunkering can also help lower maritime emissions under this scenario, and gas-fired power plants can serve as a more efficient, flexible back-up for renewables in the grid than coal.
How to catalyse a widespread transition to natural gas in a low-carbon future?
With a carbon price. Hone established in his presentation that instituting the carbon floor price in the UK accelerated the transition to natural gas there, favouring it over coal. Jaylet also referred to the UK policy as productive in encouraging the use of natural gas. The overlapping of policies in the EU, Hone explained, simultaneously implementing the EU ETS and pushing for renewables in fact dropped the carbon price too quickly. The result was unintentionally “making more room for coal, leaving the more cost effective abatement opportunities (natural gas) by the wayside.”
A standalone carbon price policy would give natural gas even footing on which to compete with other energy sources on the market. As the lowest cost outcome for a lower emissions economy, natural gas is sure to succeed in such an environment, Hone stressed. Hone added that such proactive carbon pricing policies would benefit the development of technologies crucial in a low-carbon world like Carbon Capture and Storage.
In Hone’s and Jaylet’s views, the Paris Agreement and a lower emissions world is a promising arena for natural gas. Total for its part, Jaylet said, will invest in the infrastructure needed to encourage the use of natural gas in countries looking to transition to or acquire gas capabilities. This includes markets where Total has not necessarily done so before. Hone called upon the industry to promote the long-term affordability of natural gas in these emerging markets saying, “coal may appear cheap and quick at first, but has a life cycle cost in the form of environmental and health problems,” which natural gas does not.
Would you agree that better policies are needed to enable and encourage the use of natural gas around the world? Leave us your comments below.
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