Natural gas is being sold short in key global energy transition conversations

– by Paul Everingham

The communique issued following the recent G7 Climate, Energy and Environment Ministers’ meeting in Turin contains a range of practical and positive recommendations related to both energy security and the energy transition. 

But it also reflects a missed opportunity when it comes to the role of natural gas in energy systems around the world. 

Increasing energy efficiency, reduced reliance on the use of coal for power generation (particularly unabated coal use) and continued improvement in tracking and addressing methane emissions are recommendations from the communique that will support global progress towards the goals outlined in the Paris Agreement. 

It’s also pleasing to see further recognition of the critical role that carbon capture (both CCS and CCUS) will play in emissions reduction efforts, particularly for hard-to-abate industries.  

These industries – including steel, cement and chemical manufacturing – are essential to everyday life but difficult to decarbonise without technical breakthroughs that would support fundamental changes to how they are produced. Development of at-scale carbon capture offers the chance to decarbonise without compromising output. 

For a third successive year, the Climate, Energy and Environment Ministers highlighted the contribution that LNG had played in supporting energy security following Russia’s invasion of Ukraine.  

“In this context, we stress the important role that increased deliveries of LNG can play and acknowledge that investment in the sector can be appropriate in response to the current crisis and to address potential gas market shortfalls provoked by the crisis.” 

On one level, this is pleasing. LNG imports – particularly those from the US – have been critical to keeping societies and industries in Europe powered during a period of significant challenge for energy markets. 

On another level, however, the contributions LNG and natural gas can make to global energy security and the energy transition are sold short. 

Natural gas isn’t just an emergency fuel to be called on during times of stress and strain. It’s a proven and highly reliable energy source that will be vital to the global energy landscape for decades to come. 

This includes providing emerging nations in Asia (and other regions) with a far lower-emission alternative to the coal that they currently rely on for power generation. 

Natural gas is also the ideal fuel to underpin stable electricity supply as economies around the world – both developed and still emerging – work to incorporate ever-increasing investment in renewable energy into their energy systems. 

My home country of Australia is a prime example of the importance of gas. Few countries in the world have the natural resources that Australia does as it pursues an ambition target of 82 per cent renewable power generation by 2030: from abundant sunshine to plentiful wind supply and land space needed for sprawling infrastructure. 

But renewable energy remains prone to intermittency, which battery storage technology is not yet developed enough to fully mitigate. Ensuring electricity grids can handle large-scale inputs from renewable energy sources is also a massive and expensive infrastructure undertaking.  

Remarkably, Australia, which has long been among the world’s leading LNG exporters, faces a situation where its own basic energy security could now be seriously compromised without urgent investment in future domestic gas supply. 

By continuing to invest in major projects (as its recently-released Future Gas Strategy would indicate), Australia and other producing nations can ensure there is sufficient gas supply to meet their own needs and also those of a diverse range of customers around the world (including in Asia). 

Publicly acknowledging gas as not just a fuel for a crisis but a lynchpin of pragmatic energy transition would be a positive step towards making this happen. 

Paul Everingham is the CEO of the Asia Natural Gas and Energy Association (ANGEA), which works with governments, society and industry throughout Asia to build effective and integrated energy policies that meet each country’s climate objectives.