“Natural Gas as a Solution to the World’s Energy and Environmental Challenges”

January 4, 2016

On December 15, IGU and DNV GL, IGU Associate member, invited high-level representatives from the diplomatic missions to DNV GL's headquarters to discuss how to take full advantage of gas’ potential in the future sustainable energy mix. Below are short interviews with three of the speakers. 

 

Remi Eriksen, Group President and CEO, DNV GL

How do you view the role of gas in the energy transition?

Towards 2040, the demand for energy is expected to increase by more than 35%. With the Paris climate deal the world of energy will undergo a major transition. DNV GL believes gas will play an important role in this transition together with renewable energy sources and storage technologies.

Gas is widely recognized as a relatively low-carbon, cost-effective fuel that can be a stepping stone in helping meet CO2-reduction goals as well as reduce unhealthy emissions such as NOX, SOX and particulates.

The role of technology in the energy transition and the need for technology cooperation is important in achieving a sustainable energy future. Can you tell us more about your commitment to innovation and how it is promoting the role of gas?

I believe that good solutions cannot be brought to life by the expertise and knowledge within one industry alone; we must tap into the expertise from many industries and technical disciplines. We continue to invest 5% of our revenue in innovation across our Maritime, Software, Energy and Oil & Gas business areas. For example, a recent extraordinary innovation project on capturing flared and vented gas was able to demonstrate the many viable alternatives and solutions for utilising this, today, wasted resource.  In our continued efforts to promote gas as a marine fuel we have recently revised our Recommended Practice (RP) on LNG bunkering to include recommendations on metering and gas quality. So in a number of cases our research and innovation work aligns well with developing the role of gas and increasing the understanding of risks along the gas value chain.

 

Bjørn Otto Sverdrup, Senior Vice President, Sustainability, Statoil ASA 

What role do you see gas playing in the energy transition?

Gas has a very important role to play in the energy transition, both as a means to reducing emissions through replacing more carbon intensive coal, and also as an energy source that could act to balance and back up a growing renewables sector. For example, replacing current use of coal with gas in the power sector will reduce emissions in the EU by around 450 million tonnes CO2 per year.

We know that the global population will increase and that more and more people will move into the middle class. Gas in combination with renewables could provide energy for society with a much lower carbon footprint that using coal.

 
Statoil and other multinationals are demonstrating that they are part of the solution.  What more can they do?

Statoil and the rest of the industry can work even harder on energy efficiency and reducing emissions. We have shown that we understand the challenge and are taking action. Statoil’s recent announcement of increasing our emissions reduction targets on the Norwegian Continental Shelf by 50% is a good example. We continuously look for where we can improve. Another area where the industry can make a difference is stopping routine flaring of gas. We are part of an initiative to stop routine flaring by 2030, and we believe this is one of the most important contributions our industry can make towards mitigating climate change.

In addition, Statoil works with governments, companies, industry peers and civil society organisations to facilitate the development of cost-effective climate and energy policies.

What are the biggest obstacles to the energy transition?

The world has a huge task in ensuring energy for a growing population while at the same time reducing carbon emissions. The biggest challenge will be to transition our existing energy mix into one that is less dependent on fossil fuels. This task is of massive scale.

Replacing coal is one major step that we should take. One way of doing that is introducing a price on carbon that effectively stimulates the shift that is needed. In Norway we have had a high CO2 tax for more than 20 years. Currently, it is at about 65 USD per tonne. That has helped reduce emissions to less than half the global average. And it has not reduced the attractiveness of the Norwegian Continental Shelf.

At the moment there is not global CO2 tax, but that would help promote a change towards lower emissions.

A lot is written about coal and how it is a huge global pollutant but at the same time gas has come under scrutiny with respect to emissions and leakage. What can the industry do to reduce its environmental footprint?

Through initiatives like the Oil and Gas Climate Initiative (OGCI), Statoil and peers are taking action to reduce our footprint. This includes minimizing methane emissions and routine flaring, improving energy efficiency and working towards commercially viable carbon capture and storage technologies. There is no silver bullet here, but we need a combination of efforts to reach our goals.

 

Martin Layfield, Global Segment Director, DNV GL - Oil and Gas 

How do you view the role of gas in the energy transition?

It is going to play a critical role. Nations need energy now and gas offers the opportunity to connect markets through a number of global supply routes and infrastructure options, for example pipeline gas, LNG and a variety of other options to compress for ease of transportation. The picture will vary across countries and regions. For example, the increased use of gas for power generation and the displacement of coal in the most energy hungry markets such as India and China will make a vast difference to the environmental credentials of those counties.

There is great scope for gas to expand its commercial reach and utilisation.  For example, there is increasing demand for LNG as a ship fuel, driven by legislation in some regions for cleaner shipping and also because of the techno-economic advantages gas as a marine fuel can bring.  This expanding market has led to us recently revising our Recommended Practice for LNG bunkering to include advice for quality measurements and quantity metering of LNG fuel supply (can be downloaded here) and we have worked with a number of ports globally to assess the requirements and feasibility for bunkering operations.

Gas infrastructure has great potential for future flexibility of use. Gas networks have the potential to carry a wide range of gas forms, including hydrogen and bio-SNG. Alternative sources of energy can be fed into existing natural gas pipeline networks.  DNV GL are active in projects looking into the feasibility and implications of these scenarios.

Finally, gas will play a harmonious role alongside renewable energy with improvements to supply and demand side management to ensure the right balance of energy security with the cleanest options for supply.  

A lot is written about coal and how it is a huge global pollutant but at the same time gas has come under scrutiny with respect to emissions and leakage. What can the industry do to reduce its environmental footprint?

Gas of course emits in the order of half of the carbon emissions of coal but a great deal can be done to demonstrate that gas can be even cleaner.   So much can be achieved through technology and improved utilisation of gas.  For example, carbon capture, utilisation and storage (CCUS) is gaining momentum to meet stringent climate change goals and secure energy supplies for the future. DNV GL has conducted a great deal of research in this area including very recently the oil and gas industry’s largest ever controlled release of carbon dioxide from an underwater pipeline to assess the implications associated with the development of CO2 pipelines.  We also believe there is great potential to capture small volumes of gas from flaring and venting operations and convert it into a valuable energy supply source or alternative products.  Again, this is an area where we have conducted a great deal of research.  A number of operators globally are making great improvements in managing process upsets and through improved maintenance procedures to reduce the amount of flaring at their operations.

There is the then the sometimes lesser known or hidden problem of leakage.  This is where accurate metering and measurement of gas through the value chain should play a significant part as this of course effectively represents a monetary loss.  There is also software technology to measure and alert operators to leakage of gas from pipelines for example.  We have seen this successfully deployed by a number of our customers internationally.

We have world leaders committing to climate change, we read about new regional policies like in the EU, we have initiatives like zero flaring from the world bank but in the face of the economic situation will we be able to see a balance between environmental protection and economic growth?

Actually all of these things can align very well, it just might not seem obvious!  The industry downturn offers an opportunity for operators to think differently about the future.  Environmental protection offers economic advantages that might not have been seen as a priority historically.  As discussed earlier, ensuring greater utilisation of gas through reducing losses and converting associated gas from flaring and venting will offer economic opportunities while reducing emissions.  Additionally, production efficiency is not just about optimisation of operational expenditure, which is seen as so critical in the current economic environment. It will have an impact upon the environmental performance of assets.  A more sustainable industry cannot be avoided, especially in a post COP 21 environment.   Innovation will have to play a critical role here.  Assuring the same things we have always strived for as an industry, for example management of technical risks and safety, need to be done cost effectively and under a greater level of global scrutiny of the environmental impacts.  This surely adds up to much greater investment in innovation if the industry is to continue to succeed!