Asia’s energy transition will take multiple paths

Addressing energy poverty critical for drive to lower-carbon future

By Nigel Hearne

Nigel Hearne is chairman of the Asia Natural Gas and Energy Association and president for Eurasia-Pacific exploration and production at Chevron.

The energy crisis unfolding in Europe and spreading to Asia and other nations around the world due to the Ukraine war has been grabbing headlines for weeks. But there is another energy crisis that is not being reported on a daily basis.

Today, 800 million people lack access to electricity and 2.6 billion lack access to clean cooking fuels, of whom more than 1.5 billion live in Asia. This deficiency has widespread implications, not only for energy security and national security; it is also a humanitarian tragedy.

As the world’s population grows to more than 9 billion by 2040, energy poverty is a real threat.

Many countries still just aspire to provide their citizens with basic reliable sources of energy.

Energy creates economic, social and individual opportunities. It can also ensure we continue to help lift people out of energy poverty and enable human progress.

Discussions this month at the Gastech conference in Milan, among policymakers and energy industry leaders from across the world demonstrated the urgent need for collaboration and cooperation to respond to concerns over energy poverty, deliver economic growth and transition to a lower carbon energy future.

For the Asia-Pacific region, the challenges are perhaps higher than anywhere else, with energy consumption forecast to grow 20% by 2050 to fuel economic growth and help transition millions into the global economy with access to energy.

At the same time, the region needs to deliver a lower carbon energy mix and find a solution to the legacy of coal dependency that is greater than anywhere else in the world, with the fuel accounting for almost half of primary energy demand. On this score, I would argue that there are three aspects to consider.

First, every country will have different needs. Each is at a different place in terms of economic and environmental concerns.

Second, there is no single path to decarbonize existing energy systems. The conversation should not be that one answer is right and one is wrong. We will need all solutions to meet growing demand.

Lastly, we do not live in an all-or-nothing world. We live in a world that must balance the needs of today with the ambitions of tomorrow, which includes energy security and net zero aspirations.

In the face of the uncertainty that countries are experiencing today, optionality is key. It is important that we understand and reinforce that it will require all options, all sectors and different companies to complement what they do well today to meet the needs of tomorrow.

Policies at the regional and national level will drive pragmatic energy solutions, starting with measures to enable a shift from coal to natural gas — and then on to new forms of energy.

Natural gas can enable countries to decarbonize their energy mix today. Natural gas is also a reliable backup for renewable power, solving the intermittency issues of renewables while the energy system evolves.

Natural gas infrastructure is durable and will be adaptable for new forms of energy as those scale over time.

At Gastech, there was a recognition that the U.S. plays a critical role in providing natural gas that can support energy security and national security goals. That supply, in the form of liquefied natural gas, is much needed in Asia, Europe and elsewhere.

To meet demand globally, we must look at the entire energy value chain, not just one geography or one product. The energy system is global and interconnected. Through collaboration and transparency, we can design smart energy systems.

I look at the energy equation from the customer’s point of view. We need to understand what each customer and each country needs to identify pathways where we can invest together. We also need to shift the dialogue from competition to collaboration and cooperation.

It will take all of us working together, with true cross-sector collaboration and partnerships, across government, the finance sector, industry and technology developers, to identify solutions. This is where the Asia Natural Gas and Energy Association comes in. Formed last year, the group brings energy producers, consumers, suppliers and service companies together with government to support pragmatic energy security and decarbonization goals.

Now is the time for the public and private sectors to collaborate. Many people want to write the first and last chapters of the energy system book and skip the middle chapters. But it is these next chapters — on what we must do and how we must do it — that are most important.

Only by weighing all options, and working together to make informed decisions, will we be able to move forward, accelerate energy progress and meet our goals.

I am optimistic that we can get there. As the African proverb says, “If you want to go fast, go alone; if you want to go far, go together.” Let us go together to overcome these challenges and create a brighter future for all.