"A bridge to disaster": The problem with relying on gas in the energy transition

At a sprawling convention hall in eastern Singapore, a celebratory mood was in the air as top CEOs, ministers, thought-leaders, economists and policymakers from the global energy community schmoozed, spoke at panel discussions and toured around various booths showcasing companies' latest products and technologies. The narrative of the day revolved around natural gas, liquefied natural gas (LNG) and hydrogen as the catalysts for the "future of energy and the acceleration of the energy transition in Asia and beyond."

This was the scene at this year’s GasTech 2023, the world’s largest convention for natural gas, LNG, hydrogen, low-carbon solutions and climate-related technologies, which took place from 5 to 8 September in Singapore.
Ahead of the COP28 summit in November, such discussions offered insights into the prevailing attitudes among officials and oil and gas companies.

But conspicuously absent from the dialogue was a thorough examination of the environmental impact associated with the integration of natural gas and LNG into countries' energy portfolios.

Although marketed as "cleaner than coal," both natural gas and LNG have detrimental effects on the climate. Methane, the primary component of natural gas, is a potent greenhouse gas, possessing more than 80 times the heat-trapping potential of carbon dioxide over a two-decade span. 

The production and transportation of natural gas also has the potential to emit significant volumes of methane as well as other greenhouse gases.

COUNTRIES AND COMPANIES LOOK TO EXPAND GAS AND LNG

Kicking off GasTech's opening ceremony, Singapore’s Second Minister for Trade and Industry Tan See Leng declared in a speech that Singapore continues to "welcome more global energy traders, including LNG players, to set up their trading operations here and expand their activities in Singapore."

Roughly 95 per cent of Singapore’s electricity is currently generated from natural gas, most of which is transported through pipelines from Indonesia and Malaysia or as LNG via ships.

By 2050, natural gas consumption in the Asia-Pacific region is forecasted to double from its 2020 level to more than 1,600 billion cubic metres. Southeast Asia is predicted to become a net-gas importer by 2025, as natural gas demand exceeds production.

Singapore has established itself as a leading LNG trading and bunkering hub in Asia, said Tan during the speech. A total of 60 LNG traders currently operate in Singapore, including the top-10 global energy traders.

In 2022, about USD 240 billion worth of LNG trade flowed through Singapore, equivalent in value to about 50 per cent of Singapore’s gross domestic product.

Singapore's contradictory marketing campaign as a "city in a garden" while serving as a hub for fossil fuels has faced criticism from various quarters, including environmental journalist Robin Hicks, who called out the city-state's perceived hypocrisy on his LinkedIn profile.

Second Minister Tan, however, argued in his speech that energy security "need not be incompatible" with Singapore’s climate goals. He outlined that Singapore, which is committed to achieving net-zero emissions by 2050, has launched numerous initiatives to decarbonise the natural gas value chain.

"The Republic takes a pragmatic approach to the energy transition and believes that natural gas will continue to serve as a reliable source of energy until fully replaced by carbon-free fuels such as hydrogen," concluded Tan. "Without natural gas, it would be challenging for many countries to achieve the dual objective of energy security and decarbonisation."

Energy ministers from other countries followed suit, capitalising on GasTech as an opportunity to lure more investors in the gas sector. 

Tarek El Molla, Egypt's Minister of Petroleum and Mineral Resources, stressed that while the country has been expanding its energy mix through renewable wind energy, natural gas "is the best choice for the energy transition."

Meanwhile, Nigeria has sufficient natural gas reserves and can increase its production to more than 5 billion cubic feet per day by 2030, stated Ekperikpe Ekpo, the country's Minister of State for Gas within the Ministry of Petroleum Resources.

Pointing to Nigeria’s Decade of Gas initiative, Ekpo added that Nigeria is "open for interested investors to come in and take advantage," and has instituted policies to advance natural gas exploration. 

In a similar vein, Indonesia's director-general of oil and gas, Tutuka Ariadji, stressed that natural gas will play a key role in the nation's energy transition as oil production declines. The Southeast Asian nation is stepping up development of gas projects and seeks to boost domestic use of the fuel after new discoveries in the Andaman and North Bali-Lombok blocks.

Beyond state players, the same rhetoric echoed among business leaders representing corporate giants like ExxonMobil, Eni, Chevron, Shell and Vitol.

Some observers have noted that LNG is currently a volatile, foreign currency-denominated fuel that can threaten macroeconomic and financial stability. They referenced the example of Russia’s invasion of Ukraine, which drove European and Asian gas prices to record highs.

Cristian Signoretto, deputy-chief operating officer of natural resources at Eni - an Italian energy group, said that LNG constitutes the "glue between energy commodities across the globe," emphasising that the gas market is here to grow. The company, he added, is establishing its resource base in Africa and is stepping up production in Indonesia.

Meanwhile, Steve Hill, Shell Energy’s executive vice president, lauded gas as being indispensable in supporting the energy needs of places like Asia, where countries have traditionally relied heavily on coal-fired power generation. In addition to supplying long-established importers across the continent, Shell has recently delivered commissioning cargoes to Vietnam, Philippines and Hong Kong, said Hill.

Perhaps most telling of the gathering's overarching agenda was a statement by Joseph McMonigle, secretary general of the International Energy Forum, who argued that a "linear approach to net-zero is an outdated approach that is not workable in many areas around the world."

"We need everyone at the table," he said. "I hope that at this COP, we will focus on progress and not perfection. There are so many things we can do to make progress on climate change, and natural gas is going to help the world to decarbonise."

"NATURAL GAS CAN ONLY BE A BRIDGE TO DISASTER" 

Amid the atmosphere of excitement and self-congratulatory messaging that permeated the conference, some lingering questions remained unanswered: Can decarbonisation truly be achieved by relying on LNG? Or is this in fact an oxymoron?

Natural gas is "only a bridge to climate disaster," Dean Cooper, World Wildlife Fund’s global energy lead, told FairPlanet. He pointed out that while gas does produce fewer carbon emissions compared to coal and oil, it nonetheless emits GHG and contributes to global heating, whereas renewables do not.

"An urgent transition directly to renewables is the only way to solve the climate crisis. The fossil fuel industry is likely trying to promote gas as a 'transition fuel' to maximise profits, but the science is clear - there is no time for gas," said Cooper. 

The international scientific community has made it unequivocally clear that the world must reduce its reliance on coal, oil, and natural gas to meet climate targets.

As the Intergovernmental Panel on Climate Change (IPCC), the UN agency responsible for climate science, indicated in its 2023 synthesis report, the "global use of coal, oil, and gas will have to be reduced by respectively 100, 60, and 70 percent by 2050."

In 2019, coal contributed to 33 per cent of all human-induced CO2 emissions, followed by oil (29 per cent) and gas (18 per cent). But despite the clarity of these figures, policymakers have been falling short in implementing equally clear measures, the IPCC noted.

The delay in the global decarbonisation process can be attributed to the influential interests of the fossil fuel industry, the UN body observed. Despite mounting evidence of the detrimental effects of fossil fuel exploitation, these industries continue to receive substantial public and private funding. This lack of action poses a significant threat, with the most vulnerable countries expected to bear the brunt, the IPCC warned.

In contrast, Cooper pointed out, renewables such as wind and solar are, on average, currently the cheapest source of electricity worldwide. Furthermore, they provide countries with energy security, whereas relying on imported natural gas increases sensitivity to geopolitical events. 

Renewables, he added, are also the easiest, fastest and cleanest method to provide energy access to the-over-700-million-people who currently live without electricity. 

But while claiming that renewables are "the best energy option for the future," Cooper acknowledged that "the reality is that we can’t convert all fossil fuel users to renewables immediately."In the transition period, he observed, the use of existing power generation may be necessary.

But his, in his view, does not necessitate the building of new gas infrastructure, and financing for renewables must be prioritised in order to expedite the transition away from gas and all other fossil fuels. He pointed that the increasing frequency and severity of extreme weather events underscore the narrowing window of opportunity to avert climate disasters.

Investment in new natural gas projects would be particularly detrimental for low and middle income countries, he warned.

Natural gas plants have a life-span of over 30 years, and considering we need net-zero power sectors by 2035, gas investments would constitute "stranded assets" in roughly 10 years, he said. Moreover, the impending impacts of the climate crisis make it imperative, in his view, to prioritise decarbonisation to mitigate potential economic and environmental costs.

Nature-positive, net-zero world is still possible

The debate around reliance on gas as a transitory fuel on the path to decarbonisation has been heating up in recent weeks.

During the recent Climate Ambition Summit at the UN headquarters in New York City on 20 September, a stark divide emerged between nations advocating for the continued use of fossil fuels and those insisting that preventing all new fossil fuel development is imperative to stabilise the Earth's temperatures.

On 23 September, over 1,400 people converged at the SG Climate Rally (SGCR) 2023, which was held at Speakers’ Corner in downtown Singapore, the only place where protests can legally be held in the city-state. SGCR is a local youth-led climate advocacy group.

"While we understand the need to rely on natural gas while Singapore develops the capacity needed for alternative sources of energy, it is still nonetheless a fossil fuel, and we are concerned that further investments in the LNG ecosystem and pitching Singapore as a leading LNG trading and bunkering hub may come at the expense of the green transition," an SGCR spokesperson told FairPlanet. 

Natural gas may be pitched as the least carbon-intensive fossil fuel, but the production and transport of oil and gas in Southeast Asia contributes around 10 per cent of the region's methane emissions, the spokesperson pointed out.

The group called on the Singaporean government to enhance transparency regarding its plan to achieve net-zero emissions by 2050. This includes disclosing details about the expected trajectory of Singapore's electricity fuel mix, generation capacities and strategies to reduce reliance on natural gas by that target date.

Despite the challenges, Cooper remained optimistic, saying that that he sees a feasible path towards a brighter future. "A just transformation to a nature-positive, net-zero world that limits warming to 1.5°C," he said, "is still possible."

"We have the tools, and we know what we need to do. But the only bridge to that brighter future is renewables, and we must act now. We must all work together to achieve this before it’s too late."

Image by Jonathan Petersson.