Major fossil fuel players, from companies like Shell Plc to Chevron Corp., they are emphasizing a strong idea: the transition to a green future will require much more natural gas.
For its part, China and European importers continue to sign agreements to acquire liquefied natural gas beyond 2050. Along these lines, the United States is advancing with new projects that will make it the main LNG exporter in the world in the medium term.
This push marks a turning point for gas. Previously, cleaner fossil fuel was seen as a short-term bridge to cleaner energy sources. However, environmentalists were seeking to remove it due to concerns that the gas is far more polluting than advertised. Now, the idea of gas demand peaking anytime soon is dying out.
“LNG sellers are looking at this market and feel pretty confident that gas demand will be with us for decades to come,” said Ben Cahill, a senior fellow at the Center for Strategic and International Studies.
The Russian invasion of Ukraine, as well as the energy crisis and record price increases have changed the long-term outlook for natural gas. In that sense, Europe rushes to replace Russian fuel, while emerging nations sign long-term agreements to avoid future shortages.
As recalled, China signed a 27-year agreement with Qatar to safeguard its energy security, and days later, a German importer signed a historic contract to buy LNG from the US until 2046, despite the fact that Germany aspires to be neutral in carbon a year earlier.
Also, according to the International Energy Agency, around 60 million cubic meters of natural gas (bcm) of new production capacity have been approved since Russia invaded Ukraine, almost double the rate compared to the last decade.
Gas has been the main profit driver for energy companies, including Shell and BP Plc, in recent years. Producers had plunged into the lower-margin renewable energy business years earlier, but are now rethinking those investments due to lackluster returns.
“Liquefied natural gas will play an even bigger role in the energy system of the future than it does today,” Wael Sawan, Shell’s chief executive, told investors when outlining a change in strategy following his ascension to the role in January. .
“LNG can be easily transported to the places where it is most needed. And what’s more, on average, natural gas emits about 50% less carbon emissions than coal when used to produce electricity,” he added.
In the US, the development of new LNG plants is gaining support as buyers in countries like Germany and Japan, which have ambitious green goals, sign long-term contracts with exporters.
However, there is still debate about how much gas and investment will be needed, with demand likely to depend on how successful nations are in cutting emissions.
The IEA (International Energy Agency) points out that gas demand must fall sharply by the end of the decade in order to keep the world on the path to net zero by 2050. Along these lines, the agency calculated in 2021 that all new oil field developments , gas and coal need to stop to meet that scenario.
Producers and financial institutions must “commit to ending financing and investment in the exploration of new oil and gas fields, and the expansion of oil and gas reserves,” said Antonio Guterres, secretary general of the United Nations. United. “We rushed into disaster, eyes wide open,” he concluded.
To market natural gas as a clean alternative to coal, big energy companies are working to reduce methane emissions. Shell, ExxonMobil and more than a dozen other producers are aiming to achieve near-zero methane emissions by 2030 as part of an initiative launched last year.
Source: Larepublica
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