Inspenet, July 2, 2023.
Is natural gas key in the transition towards a sustainable future? According to major fossil fuel players, from the likes of Shell Plc to Chevron Corp, the transition to a green future will need much more natural gas.
Currently, China and European importers continue to sign agreements to purchase liquefied natural gas beyond the year 2050, and the United States is moving forward with new projects that will make it the world’s leading LNG exporter in the medium term.
This push marks a turning point for gas, as previously, the 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 it was much more polluting than advertised. Now the idea of demand peaking anytime soon is fading away.
The long-term outlook for natural gas has changed
The war in Ukraine, the energy crisis and the record rise in prices 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.
For its part, 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 Germany’s aspirations to be neutral in carbon a year earlier.
According to the International Energy Agency, around 60 million cubic meters of natural gas new production capacity has been approved since Russia invaded Ukraine, almost double the rate compared to the last decade.
Natural 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.
In the United States, 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.
The IEA (International Energy Agency) points out that the demand for hydrocarbons must fall drastically by the end of the decade in order to keep the world on the path to net zero by 2050.
Fountain: https://larepublica.pe/economia/2023/06/28/empresas-petroleras-lideres-ven-al-gas-natural-como-clave-en-transicion-hacia-un-futuro-sostenible-1811152#google_vignette
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