Pragmatism needed says head of the IGU

The guiding principle underlying the role of gas in the international energy transition had to be one of pragmatism, an audience of around 40 members of the gas sector and stakeholders heard in a briefing from the International Gas Union (IGU) in Wellington last week.

Milton Catelin, secretary-general of the IGU, told the group that at the global level the world energy market remains in a volatile state – “and this was certainly exacerbated by the Russian-Ukraine war”.

But it was important to recall that this volatility of supply actually started much earlier as a result of under-investment globally, made worse during the COVID pandemic, and then having “spiralled out of control over the last two years”, he said.

To cope with the recent crises in energy supply and security, many governments around the world had needed to wind-back some of their more extreme decarbonisation targets and initiatives, he said.

It was a case of “rhetoric colliding with reality,” Catelin said.

“The underlying fact is that fossil fuels still meet 80 percent of the world's growing energy needs.

“A carbon neutral economy takes time, and it will require both electrons and molecules, and all the necessary infrastructure.”

Natural gas today offered immediate emissions reduction when it replaced coal and oil while providing the necessary grid balancing needed to integrate large scale renewables into the mix, he said.

And thanks to a functioning global gas market, when the Russian gas pipeline was cut off in 2022, Europe was able to attract an unprecedented amount of new energy in the form of liquified natural gas (LNG).

Imports and exports of LNG increased in Europe by 66 percent in one year, he said.

But the IGU was a strong advocate of the urgent need to address climate change. “People who deny climate change are by and large outliers now,” Catelin said.

Although there was no one-size-fits-all in terms of what those actions should be for individual countries, he said.

“Each area of the world has its own unique set of challenges and opportunities that require unique solutions.”

There are still large parts of the world where no modern energy systems exist at all, he said.

“Some countries dream of having the problem of an energy transition - because to them, energy transition means getting energy in the first place, and that's what I think many other countries forget.

“We believe natural gas is an indispensable tool for an achievable energy transition. Gas and renewables are the two foundational pillars for decarbonising the global economy.

“New gas supply, infrastructure and investment will be needed for, not just in New Zealand but around the world.”

Investment is needed in natural gas, increasing the share of renewable and low carbon gases and in carbon capture and storage, he said.

“New Zealand's own Climate Change Commission has already noted that investment is needed within the upstream sector to avoid New Zealand becoming ever more dependent on energy imports.

“We believe gas is here for decades to come and the world needs to welcome that fact.

“The energy transition, so vital to our future, will only be successful if it involves all our collective efforts and resources, and recognises the importance of balancing social development, economic development,” Catelin said.

“Gas can power the energy transition while improving the lives of the world's people and the security of the world's economies.”