February 25, 2020
At the recent Baker Hughes AM2020 conference in Florence, International Energy Agency executive director Fatih Birol remarked that the world has entered a “golden age of gas” thanks to the growth of LNG, with current prices set to ensure supplies penetrate Asian markets and particularly India.
“We said the golden age of gas can be materialized through LNG, and it is what we are seeing today,” Birol said. “At the current price levels, which we think will be with us for at least a few years to come, LNG will penetrate the Asian markets,” he said.
“There’s a big opportunity there, huge opportunity, many countries bringing new LNG to the markets — again the US taking the lead, but also from Qatar, Australia, Canada. We see LNG is making major inroads.”
“While electricity generation will drive future demand, it will not be the biggest driver of gas demand growth,” Birol said.
“The main driver is gas use for industry: food processing, textiles, fertilizers — they are the drivers,” he said, predicting the IEA may have to revise higher its gas demand estimates for India in the light of government policy there.
Birol said investment in both oil and gas would continue to be needed, despite energy transition efforts. With the industry investing $330 billion annually in upstream oil and gas at present, even the IEA’s most optimistic scenario for a transition to lower emissions and limited climate change entails annual upstream investment of $300 billion, to offset field declines, he said.
The industry’s ability to retain its social “license to operate” in the face of public concern would depend partly on its willingness to rein in emissions from the upstream production process, which currently account for around 15% of all global emissions, he said.
“The world will need oil and gas for several years to come, but all the oil and gas industry should understand: no oil and gas company will be unaffected by clean energy transitions.”
While striving for a zero-carbon economy may sound good, trying to phase out and eliminate the use of oil and natural gas doesn’t make sense from an economic standpoint and a reliable energy standpoint.
ONE Future believes that science demonstrates methane has an impact on greenhouse gas. To reduce that impact, we believe in utilizing a market and performance-based approach to achieve reduction objectives as opposed to a command and control approach.
ONE Future takes a value chain approach to reducing methane. Our members represent all sectors of the natural gas value chain. While the goal we established in 2014 was reducing methane intensity to 1% by 2025, we have beat that goal two years in a row. In 2017 we achieved a methane intensity level of 0.552%. In 2018 the coalition’s methane intensity was reduced to 0.326% a 41% reduction from the previous year, at the same time production and throughput increased.
The coalition is demonstrating success, as our methane intensity is decreasing, our membership is increasing. ONE Future is proud that just one month into the new year, we have already garnered two new members. This interest in adopting science-based technology and methods to reduce emissions is a clear sign that natural gas will be around for a long time.