Christopher E. Smith
OGJ Pipeline Editor
HOUSTON, Oct. 8 -- Addressing the World Gas Congress in Buenos Aires, Petronas Pres. and Chief Executive Officer Tan Sri Mohd. Hassan Marican, emphasized the need for actively traded international natural gas markets if the fuel is to effectively contribute to a sustainable energy system. Barring this, Marican felt a netback to other competing fuels as part of long-term contracts was the best mechanism for generating common reference prices.
Marican went on to say that without such price discovery mechanisms, it is unlikely that new production capacity will occur on a scale necessary to sustain the continued development of gas.
The recent global economic crisis has already forced postponement or cancellation of gas-related projects potentially affecting some 30 billion cu m of gas supply, according to Marican, citing International Energy Agency statistics.
Looking at global economic and energy demand growth through 2030, Marican pointed to both nuclear and clean coal technologies as ascendant competitors to natural gas as the world sought to shift toward less resource-intensive and environmentally damaging energy systems. He said the current energy environment required the natural gas industry’s concerted efforts to ensure the fuel remain a “safe, reliable, and above all affordable” part of the transition.
Marican cited technologies such as floating LNG and combined-cycle gas turbines (CCGT) as enhancing the attractiveness of natural gas. He also cautioned against government’s resorting to “populist measures” in reaction to social and political pressures, citing the dangers of limiting gas exports or establishing domestic price ceilings and calling for “collaborative region-wide approaches” to forging integrated and functioning gas markets.
Marican’s remarks are consistent with the International Gas Union Strategic Panel on “Natural Gas and the Sustainability Question: How Many Answers Can We Provide?” report’s findings. Trude Sundset, vice-president of environment and climate for StatoilHydro, presented the report and cast the issue in terms of securing and affordable energy supply while at the same time grappling with the fact that 70% of all carbon dioxide emissions are energy-related. Sundset stated that, depending on the quality of fuel, combustion of gas results in at least 25-30% less CO2 than oil and 40-50% less than coal.
Sundset went on to say that switching all coal-fired plants to CCGT would itself cut global CO2 emissions by 20%, while also citing natural gas’ combination potential with renewables such as biomethane and hydrogen and the industry’s leadership role in developing carbon capture and storage technology.
Contact Christopher E. Smith at [email protected].
Rystad Energy.
