Natural gas produces carbon dioxide, sure. But it does so at much lower rates than coal and fuel oil, an alluring prospect for poor countries unwilling to sacrifice long-term plans to expand access to energy and build their economies.
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Sitting on stage with the deputy U.S. energy secretary at the Word Petroleum Congress in Houston this week, Egyptian oil minister Tarek El-Molla listed one natural gas project after another as sign of his country’s commitment to reducing emissions, including switching oil-burning power plants to gas and pushing vehicles that run on compressed natural gas.
“We do implement. We do not just talk,” he said. “But this transition period should be realistic and doable.”
The developing world’s embrace of natural gas stands in stark contrast to western nations’ pledges to do away with fossil fuels all together unless their emissions can be captured and stored underground — a technology that for now carries little economic incentive. The resistance in Asia and Africa to abandoning fossil fuels could extend the runway for the oil and natural gas industries that support the Texas economy.
The United States and Europe enjoyed the cheap energy that comes from burning oil and coal for centuries, building sprawling societies with a standard of living far ahead of much of the world. Now, African and Asian leaders are asking why they should sacrifice their development to solve a climate problem that was largely caused by the West.
“It is not feasible for oil and gas to be taken offline in the short- and medium-term because of the state of our development,” said Lawrence Apaalse, chief director at Ghana’s Ministry of Energy. “We’re just beginning to industrialize.”
Under current climate pledges, natural gas demand is set to peak in 2025 and then begin a slow decline to less than 90 percent of current levels by 2050, according to the International Energy Agency. But developing nations’ embrace of natural gas could push out natural gas’s peak decades, said Michael Stoppard, chief global gas strategist at the consulting firm IHS Markit.
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“We’re expecting natural gas demand to grow through 2050 on the back of emerging economies,” he said. “Under any scenario, gas demand is going to grow more in the developing world than the (wealthier) nations, where there is already decline.”
In India, gas demand is expected to increase fourfold over the next 20 years. Likewise, oil demand there is projected to double over the next decade, said SSV Ramakumar, research and development director at Indian Oil Corp., a state-owned energy company.
Under its climate policy, India is planning to invest heavily in electric vehicles and solar, with the goal of getting 20 percent of its energy from renewable sources by 2030. But the costs of building out India’s power grid, along with concerns about the intermittent nature of solar energy, are limiting that expansion.
“Our goal is to be net zero by 2070,” Ramakumar said. “But a lot of energy appetite is there, so we can’t shoo away fossil fuels yet.”
A similar scenario is playing out in developing economies around the globe.
In Asian countries such as China, Vietnam and Thailand, a big push is underway to switch off coal-fired energy in favor of natural gas to improve the horrific air quality in that region’s cities. In Africa, where access to electrical power is limited, the focus is on shifting populations away from polluting energy sources such as wood and fuel oil in favor of gas delivered by special LNG trucks and canisters of liquid propane.
And while South America gets the majority of its electricity from hydroelectric dams, governments there are also looking to shift away from the coal and fuel oil they do use in favor of gas.
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“It’s not just about greenhouse gas emissions. It’s about pollution and clean skies. That’s a huge attraction for emerging economies with urban populations,” Stoppard said. “They are investing in solar and wind, but those technologies don’t give you 24-7 power.”
Investing in gas pipelines, storage terminals and other infrastructure designed to operate for decades promises to delay efforts to reduce greenhouse gas emissions, even as scientists warn that doing so would likely have cataclysmic repercussions for the planet. Countries represented by the Organization for Economic Cooperation and Development, which includes the United States, Europe and most of the world’s wealthier nations, are responsible for only about a third of global carbon emissions, not much more than China alone produces each year.
There is a growing realization among U.S. officials that the developing world is simply not going to move at the same pace as the United States and Europe. Asked about developing nations’ investment in gas, a spokesperson for the U.S. Department of Energy said it was understood that climate action would be taken in “a way that is affordable, reliable and equitable.”
“Combating climate change is a shared responsibility, and it requires continued focus on technologies that reduce and remove carbon,” the spokesperson said.
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The developing world’s desire for natural gas comes as oil and gas companies face declining interest from investors, who are putting their money into emissions-free energy sources, such as wind and solar.
While oil and gas demand in wealthy countries isprojected to fall, developing nations represent a booming market — not only for exploiting those nations’ natural gas fields, but also for liquefied natural gas exports. The Energy Department recently forecast that United States will have the world’s largest LNG exporting capacity by next year, most of it built along the Gulf Coast.
In Nigeria, where Royal Dutch Shell and Exxon Mobil are both major operators, there are plans to expand gas production twentyfold in the years ahead, said Nigerian oil minister Timipre Sylva.
“We have a responsibility to give power to our people. We also have our commitment to net zero by 2060,” he said. “It’s a delicate balancing act.”
james.osborne@chron.com