Electrification Lights Up Need for Gas, LNG

The globe’s electrical power load is growing rapidly, but much of the world also has a disconnect about the most likely fuel to keep the lights on: natural gas.

A panel of LNG experts spoke on the challenges for developing a global LNG and natural gas infrastructure at the Gastech Houston Conference on Sept. 18.

Many governments are generally aware that much more power generation is needed, but many countries are having difficulty coming around to the idea that solar, wind and other forms of renewable energy cannot carry the entire load.

“I think we continue to see more of that recognition as we move forward,” said Cynthia Hansen, Enbridge executive vice president and president for gas transmission and midstream. “There are areas that are very challenging. In the U.S. Northeast, we still have a real disconnect.”

The Northeast states have abundant supplies of natural gas, but pipeline projects face major political opposition, resulting in adjacent states having to import gas at far higher prices. In states such as Virginia, however, a major increase in energy demands is expected as the region develops artificial intelligence data centers.

Wind, solar and batteries will most likely not be able to cover the load, panelists noted. Renewables intermittent nature also means they will need power to cover the baseload for those centers.  

“That focus on renewable energy is fantastic, but you need the baseload to back it up,” Hansen said.

Michael Stoppard, global gas strategy lead for S&P Global Commodity Insights, moderated the panel. He pointed out that 20% of the world’s energy is provided through electricity. As many countries turn to electrification programs to reduce greenhouse gas output, the amount of power provided by electricity is expected to reach 33% by 2050.

Some governments have ignored natural gas as a solution, as burning gas for power generation releases CO₂. Proponents of the fuel, however, note that it releases about half as much CO₂ as coal and about 40% less than heating oil.

Speaking at Gastech on Sept. 17, Chevron CEO Mike Wirth noted that boarder adoption of natural gas could reduce coal combustion, which in 2022 produced 15 billion metric tons of CO₂ worldwide.

Natural gas is therefore a logical choice to cut emissions, and for most gas-poor countries, natural gas will come in the form of LNG, panelists said.

“If LNG is going to achieve the more optimistic outlooks that we've heard, it needs to be a winner in the power sector,” Stoppard said.

The panel included two representatives from Asia. Yumiko Yao, senior general manager of the LNG business department for Tokyo Gas, discussed how natural gas will most likely play a temporary role for the future of Japan’s power needs.

The country’s stable power base had formerly been nuclear. However, after the Fukushima nuclear power plant disaster in 2011, the country’s government has been reluctant to build new plants. Japan does have an advantage with LNG, as the nation was an early pioneer in LNG importation and has already developed an extensive infrastructure.

“Switching from coal-fired power generation to gas-fired power generation has an essential role, especially in emerging countries in Asia that have a long way to go for decarbonization,” Yao said. “It is not realistic for those countries to immediately switch all their electricity to renewable energy.”