Decarbonization starts with natural gas; questions remain

BARCELONA — Is natural gas a transition fuel on the road to a decarbonized future? That was the question posed to several chief executive officers (CEOs) of top energy firms at the Gastech Exhibition and Conference here on Monday.

“Gas is a destination fuel and I believe it is a solution for the future as the cleanest possible fuel,” Saad Sherida Al-Kaabi, CEO of Qatar Petroleum, said during a panel discussion at the conference, which was opened by King Felipe VI of Spain on Monday.

Mr. Al-Kaabi noted that Qatar Petroleum, one of the largest gas producers in the world, aims to increase its output by 33% by 2023 in anticipation of continued strong demand particularly from China.

Zou Caineng, vice-president for petroleum exploration and development at PetroChina’s Research Institute, said China expects natural gas demand to reach 520 billion cubic meters (bcm) by 2030 from 240 billion bcm in 2017. He estimated that 40% of the demand would be addressed by imports. “In China, we believe natural gas will replace oil and carbon… The Chinese government is working on the exploration and development of natural gas and renewable energy,” Mr. Zou said in the same panel discussion.

Gas is still widely seen as a transition energy source for power generation when renewable sources like wind and solar fall short.

Gazprom Export Director General Elena Burmistrova described gas and renewables as a “perfect tandem”, saying: “Natural gas — it is clean, flexible, renewable and perfect fit for renewable generation. And it is a very good technology for the back-up of the system…”

For Repsol CEO Josu Jon Imaz, “Companies like us, Repsol, have placed natural gas as a big pillar of our strategy. Sixty-three percent of our production is natural gas and 75% of our reserve is natural gas.”

The role of natural gas in the overall energy sector in the future is also seen dependent on the progress of renewable energy and technology, as well as policies of governments.

While many say the future of gas is bright, questions remain on whether natural gas as the lowest carbon emitting fossil fuel can keep its environmental advantage over coal.

Natural gas consists of mostly methane, which is a potent greenhouse gas.

Maarten Wetselaar, integrated gas and new energies director of Royal Dutch Shell, said the natural gas industry must work more on monitoring and reducing methane emissions.

“Take the most stringent global warming potential period and, say, how much gas we can leak from our logistics chain for gas to be better than coal? The answer the IEA (International Energy Agency) provides is 3.5%. How much do we currently leak? The IEA estimates is 1.7% or half. There are claims gas has a 50% greenhouse gas advantage over coal. While that is good, that isn’t good enough,” he said. “We can do much better than that.”

Shell, Mr. Wetselaar said, aims to cut maximum emissions of methane to 0.2% by 2025.

“The key thing here is not just improving the way we manage it, but also improve the way we measure it,” he said.

“Currently, the industry is not good enough in measuring its methane footprint and if we don’t improve that, then the credibility falls apart. We need to measure better, manage better and then give the transparency the customer deserves. If we do all those three things as an industry then gas will take its rightful place in the energy transition and energy endgame.”

Francisco Reynes, executive chairman of Naturgy, said one of the challenges is to demonstrate how natural gas is not part of the problem, but a solution for the future.

In the Philippines, the Department of Energy’s Natural Gas Roadmap (2017-2040) envisions natural gas as the “preferred fuel by all end-use sectors” by 2040.

First Gen Corp. has been working to develop the country’s first liquefied natural gas (LNG) regasification terminal at the First Gen Clean Energy complex in Batangas.

In its 2017 annual report, the Lopez-led firm said the LNG terminal is “critical in ensuring uninterrupted supply of natural gas with the expected depletion of the Malampaya gas field starting in 2024.”

First Gen has a portfolio of gas-fired power plants with a combined capacity of 2,017 MW as of 2017.