Regional security in Asia will require energy cooperation

Cross-sector collaboration and partnership – with the finance sector, industry, technology, and governments – can identify solutions.

By Nigel Hearne

GOVERNMENT leaders in the Asia-Pacific gathered in the US earlier this month to discuss regional stability and security. In these conversations, they recognised the importance of energy security in underpinning those goals.

The dialogue at CERAWeek – one of the world’s leading energy events – held in Houston demonstrated the need for collaboration and cooperation in achieving shared objectives. The challenge for the region is immense.

Economies in the Asia-Pacific region are projected to account for 50 per cent of the world’s gross domestic product by 2050. A reliable supply of energy will underpin that growth, and we heard clearly from nations attending the conference that policy must balance affordability, reliability and environmental concerns.

There are 3 considerations to keep in mind as we look at how to proceed.

Optionality is the only solution to uncertainty

Everyone is focused on the first 5 years and the last 5 years of the energy transition. But charting out the course ahead will be vitally important. Every country in Asia will have different needs.

There is no single path to decarbonise the existing energy system. There are multiple paths. And the conversation should not be that one answer is right and one is wrong. We will need all solutions to meet growing demand.

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.

Natural gas is key to this evolution

Natural gas can play a key role in enabling countries to decarbonise their energy mix. There is an opportunity today to use the existing value chain for customers to displace coal.

Since 2010, coal-to-gas switching has saved around 500 million tonnes of CO2. Now, there is potential in today’s power sector to reduce up to 1.2 gigatonnes of CO2 emissions by switching from coal to natural gas. Doing so would bring down global power sector emissions by 10 per cent. We can do that now.

Natural gas also provides a reliable backup to renewable power, solving the intermittency issues of renewables while the energy system evolves.

The investment in natural gas infrastructure is durable and convertible. We can use this system to introduce new forms of energy, as those scale over time.

At CERAWeek, there was discussion on how the US is blessed with natural gas resources that can provide for the nation’s domestic needs. They can also contribute to a reliable supply of energy for our Asia-Pacific neighbours, supplying them for decades to come. These supplies will complement the resources in Australia and elsewhere that are important to Asia’s energy security.

Collaboration is key

Nations are at radically different points along the development and climate change curve with different energy needs and economic challenges.

We need to understand the customer and the country context to identify pathways where we can invest together. This is how we will unlock potential.

The energy system will change. The question is at what pace. Policies at the national level will drive the adoption of lower carbon forms of energy – starting with policies that enable a shift from coal to natural gas.

It is going to take effective policies, investment and regulations, to ensure we provide for the needs of today and the future. To meet demand, you need to look at the entire energy value chain; you cannot solve this issue on a commodity-by-commodity basis.

Through collaboration and transparency we can design smart energy solutions. Cross-sector collaboration and partnership – with the finance sector, industry, technology, and governments – can identify solutions.

The Asia Natural Gas and Energy Association, or Angea, was formed to bring together countries and companies across the value chain to support pragmatic decarbonisation goals. We are working to understand the customer and the country context to identify pathways where we can invest together.

By weighing all options, and working together to make informed decisions, we will be able to set forward on this path. I am optimistic that we can achieve these goals.

As the African proverb goes: “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 bright and exciting future for all.