- The Writer holds an MSc in Eurasian Political Economy & Energy from King’s College London and also an MA in European Studies from Sabancı University.
In a fast changing energy transition period, the natural gas industry is on the verge on finding its place amid other energy resources. The particularly lack of coherent messages from the industry and its fragmented structures have raised the question of whether the gas industry will have the same presence as it used to have in Europe’ energy mix in decades to come unless it plays a significant role in decarbonization.
In its fifth Intergovernmental Panel on Climate Change (IPCC) assessment report in 2014, it was concluded that if the world continues to emit greenhouse gases at the same rate as they currently do, the world will reach a danger point in cumulative CO2 emissions of 2900 gigatonnes, two-thirds of which have already been emitted since the 1870’s.
The continuous reduction of annual carbon emissions by around 4 percent over the next 50 years would help the global reduction in overall carbon emissions by at least 75 percent in comparison with today’s level, according to the IPCC’s report. The solution to achieving this target has been to systematically cut carbon emissions by decarbonizing energy systems. In this regard, many experts in the field have stressed the role that natural gas could play in meeting these carbon reduction targets and on how natural gas could be used to back up intermittent renewable power generation. The switch from coal-fired power plants to gas power plant would also contribute to the easing of carbon emissions in an expedient and cost-effective manner.
In the IPCC’s assessment report, the remedy for an extensive decarbonization strategy was outlined in three major steps;
1. Reduction in energy demand,
2. Decarbonization of energy supply
3. Switching from low carbon intensive carriers to low carbon intensive energy carriers.
Because the role gas has in CO2 reductions has been highlighted many times as part of the solution by various authorities, natural gas has become a priority for many governments, however, this strong incentive has been tarnished for two major reasons namely; methane and carbon emissions.
It should be noted that due to the difficulty of obtaining reliable data other than the U.S.’s comprehensive estimations, various estimations on the volumes of methane leaked into the atmosphere failed to accurately measure the real impact of methane gas on greenhouse gas accumulation.
Although CO2 emissions through burning natural gas are relatively smaller compared with other fossil fuel options; its level is still considerable and cannot be ignored. As a result, both Carbon Capture and Storage (CCS) technology have been suggested as a solution to help combat carbon emissions derived from natural gas.
Even though its overall cost has declined, CCS technology is still exorbitantly expensive. As a result, its widespread application has been hindered around the world and it has made limited progress for its application in power generation. Consequently, only a small number of places has benefited from CCS technology. In other respects, natural gas is highly unlikely to be seen as a fuel other than its role as a transition or bridge fuel.
Additionally, venting and flaring during the exploration and production operations of natural gas as well as methane leakage from old distribution systems significantly increase the volume of greenhouse gas emissions. Flaring and venting should be differentiated in that flaring is more concerned with carbon emissions while venting is related to methane gas release, which is more potent in causing global warming.
Recent technological developments in the field of electricity generation have put the role of natural gas in decarbonization at risk. Overall cost reductions in renewable energy and improvement in electricity battery technology began to force policy makers to ask whether natural gas-fired power plants could compete with the cutting edge developments in renewables in the years to come.
Continued progress in the field of renewables and in electric storage capacity are signaling that sooner or later seasonal changes, which were once the biggest impediment for the widespread application of renewables and electricity storage, could possibly overcome obstacles with new technological breakthroughs. Therefore, the challenges in natural gas power plants are here to stay in the foreseeable future.
Likewise, after 2014, gas prices caused major setbacks for exploration and production companies forcing them to reconsider their mega projects such as LNG projects. Lower gas prices caused problems for new investments in the natural gas upstream sector. In the period between 2010 and 2015, the volume of gas consumed in OECD countries dropped from 23 percent to 17 percent of the energy mix down to approximately 60 billion cubic meters. The occurrence was down to in particular higher prices in natural gas over the same period along with cost reductions in renewables combined with lower prices for coal. Additionally, sluggish economic growth and the rise in energy efficiency have resulted in the decline of natural gas demand.
Natural gas’s role will strengthen in an era when decarbonization plays a top role of many governments’ agenda to fight against climate change. If natural gas fails to contribute to decarbonization, the role bestowed on natural gas as a bridging fuel would possibly remain unchanged for a time until it peaks and would decline since it would only serve for a transitional period.
In this regard, decarbonization poses both as a challenge and an opportunity for the gas sector. The inevitable decline of natural gas consumption should it fail to achieve decarbonization can only be met through utilization of widespread carbon capture and storage technology. Therefore, large-scale decarbonization should be of vital importance for the natural gas community beyond 2020’s and 2030’s.
- Opinions expressed in this piece are the author’s own and do not necessarily reflect Anadolu Agency's editorial policy.