Doha: Natural gas has a very important role to play in the energy transition as it is one of the global enablers for reducing emissions quickly, cost-effectively and steadfastly by replacing carbon-intensive fuels as well as backing up intermittent renewables.
The success of the energy transition rests on the use of technologies, the possible pathways for 2022 and how to accelerate the shift to a sustainable trajectory, discussed experts during a virtual event.
The virtual event was hosted by Al-Attiyah Foundation in association with Refinitiv entitled ‘The 2022 Global Energy Landscape: Will the Crises Continue?’.
Murray Douglas, Head, EMEARC Markets & Transitions, Wood Mackenzie said, “Efforts to decarbonise have not been a primary driver of the energy crisis but are restricting manoeuvrability to deliver short-term fixes. We believe that growth will continue in the coming years but we do not expect the industry to recover pre-pandemic levels.
The oil and gas prices will remain elevated and volatile throughout this decade. Speaking about the new technology he said,” Hydrogen and Carbon Capture and Storage (CCS) are dominating the focus for industry. It is incredible to see how fast the pipeline for both technologies is growing in this year and we think it needs to grow quite significantly.”
He noted, there is also this question of hydrogen whether most of that comes from clean hydrogen, through electrolysis or blue which we think is important to scaling up hydrogen industry. “We think gas still has a very important role to play in the energy transition since it will support the development in hydrogen industry pipeline,” he added.
Renewables are not expanding quickly enough to satisfy the rebound in global electricity demand, which is set to grow by 4 percent in 2022, according to the International Energy Agency (IEA).
Renewables are expected to cover only half the projected increase in global electricity demand and the rest of the demand will be covered mostly by fossil fuel-based generation.
Robin Mills, Founder at Qamar Energy discussed the threat of Omicron variant to the energy markets. “The reaction to Omicron shows how jumping the markets were, the damage of Omicron can be seen in fall of oil prices. Given the levels of vaccinations that have been achieved we should not expect that Omicron should be as serious as last year.”
Responding to query about, did COP26 change anything for the energy markets, he noted in the long term it changed things in a number of ways, the direction of travel has become a lot clearer on climate action, the net zero commitments from a number of different countries stepping up from most major economies. Many countries have pledged to reach the net zero carbon emissions target, for example - China by 2060, India by 2070 and Middle Eastern counties to achieve net zero between 2050 to 2060.
These are long term targets that need to be translated to short term goals and actions that will make a difference. “We also saw a lot of action on phasing out coal and phasing out financing for fossil fuel projects and also progress on some of the new energy technologies,” he added.
He also shed light on Carbon Capture and Storage (CCS) highlighting that it is a nascent technology. “It is the time we are seeing momentum again, and this technology has been around since 70s and it’s about commitment, project management and getting the required government support. We are seeing an upsurge in CCS interest in Europe, North America, and Middle East,” he said.
Valérie Marcel Associate, Fellow at Chatham House elaborated on the practical steps governments should be taking to move the CCS agenda forward. She said, this transition is not being driven by technology as Carbon Capture and Storage (CCS) this technology has been existed for capturing gas and preventing leaks and flaring. The transition is relying on policy signals to increase the pace and move forward and there has been clear progress on policy signals.
Axel Threlfall, Editor at Large, Reuters said, the global energy crisis that we are facing today has shown how dependent the world is on fossil fuels. Oil and natural gas prices recently soared to the highest levels in years, pushing up electricity bills as widespread energy shortages hit Asia and Europe.
“The crisis raises questions about whether the world is ready for the green energy revolution when it’s struggling to power itself now. On the other hand, the crisis shows the need to move further away from coal, gas, and oil as prices for those commodities spike,” he added.
