The 21st Century Stands To Be Our ‘Natural Gas Century’

Our (World Gas Conference) forum is taking place at a crucial point—a period in which we are searching for ways to overcome the consequences of the global financial crisis and industrial recession. In this context, the topic of gas-supply security being addressed by our session is particularly vital.

It should be noted that, in recent years, the issue of energy security, including security of gas supply, has been a focus of debate at the highest levels and has become a priority item on the agenda of international conferences, meetings of political leaders and even military alliances. Today’s forum is a good opportunity for us to discuss this subject within this assembly of top professionals and highlight strategies that gas market players are pursuing for the sake of increased energy security worldwide, without wasting our time dispelling ideological and political prejudices.

The term “investments for higher security of supply” will be construed broadly—not only as necessary capital injections, but also as a system of actions and initiatives on a global scale.

According to the United Nations, by 2030 the world population will grow by nearly one fourth—up to 8.3 billion people. Simultaneously, there will be an increase in energy consumption per capita, to be contributed primarily by the most populated countries—China, India, Brazil and Indonesia. These countries are experiencing a rapid process of industrialization, urbanization and automobile use. Energy consumption will be growing on the back of limited opportunities for boosting oil output, narrow bounds for developing the nuclear energy sector and an extremely low contribution from new, alternative non-hydrocarbon energy.

All this offers excellent prospects for the gas industry.

Most estimates are fairly consistent that in the foreseeable future mankind won’t be able to do without fossil fuels. Natural gas will be the most eco-friendly hydrocarbon that will be used on a broader basis, including for power-generation purposes and as a vehicle fuel. If the 20th century was our “oil century,” then the 21st century stands to be our “natural gas century.”

Coordination of activities among major gas exporters is not enough. Further integration of efforts made by natural gas market stakeholders is needed. Despite the obvious benefits of natural gas compared to other fuels, one should not think that the role of gas in the global energy balance is guaranteed. We believe that all of us who are interested in developing the natural gas industry, namely the International Gas Union, should be more active in shaping the world energy-development model. So far, the main goal pushed forward by some politicians amount to nothing more than just a decrease in hydrocarbons consumption.

Meanwhile, millions of our consumers will be at the mercy of a costly model of future energy consumption, a model that they will have to pay for. At the same time, calculations prove that a high demand for an environmentally friendly economy may be reached without prejudice to hydrocarbon energy, but owing to it. Thus, replacement of nearly half of the existing coal-fired power-generating facilities in Europe with up-to-date gas-fired combined-cycle power stations will cut CO2 emissions in the same amount and will cost only one third of the price of that of wind power generation.

Natural gas is the most reliable energy source in terms of energy security during peak load periods when compared to any other source of energy, including nuclear, solar, wind and hydro energy. Nobody can guarantee maintaining peak loads with energy produced from renewable sources.

When determining the balance between environmental and energy interests, it is important for us to convey to the public that it is necessary to be aware of all factors. For example, a potential reduction in CO2 emissions stipulated by vehicle conversion from oil products to natural gas is not so tangible, if compared to the power industry. Using natural gas in engines will relieve us not only from toxic gasoline and diesel-engine exhaust, but also from using fertile land for producing biodiesel fuel in lieu of food. Gas may and should be used in vehicle engines in a compressed form or as a synthetic engine fuel. Thus, natural gas will make another contribution to sustainable development.

Another essential issue we have to face together, particularly within the International Gas Union, is forming the global gas balance as a basic principle for long-term planning across the entire gas industry.

--Alexey B. Miller