From the editor: Transition as the New Normal [GasTransitions]

The sharp distinction that previously existed between traditional natural gas activities and low-carbon alternatives is increasingly becoming obsolete. All gas companies are now in some way or other involved in – or at the very least interested in – alternative energies.

The oil majors have all adopted ambitious reduction targets and are investing heavily in renewable energies, hydrogen and carbon capture and storage. Grid operators, technology providers and service companies are also exploring the new opportunities emerging from the transition to a more climate friendly energy system.

Although knowledgeable people are aware that the road to net-zero emissions will take decades to travel, changes are coming faster than anyone would have thought possible just a few years ago. Look through the news section of this magazine and you will see the evidence. “European consortia launch big hydrogen projects.” “Total targets 100 GW of wind and solar capacity by 2030.” “Wood Mackenzie: green hydrogen coming faster than anyone thinks.” And so it goes on.

And it can’t be denied that a lot of this news does not bode well for “unabated” natural gas. “Spanish utility Naturgy writes down gas-fired power plants.” “Enel rejects both natural gas and CCS.” “Australian gas-fired power generation at lowest level since 2006.”

Europe in particular is in a hurry to say goodbye to greenhouse gas emissions. As we report in this issue of Gas Transitions, in June the European Commission will present (yet another) major legislative package, called “Fit for 55”, that will lead to a complete overhaul of all existing energy regulations.

What is more, as Lisa Fisher of “green” think tank E3G says in an interview, it will also lead to a reduction in the consumption of “fossil” gas by 30% over the next decade. The European gas market will become much more “fragmented” or “decentralised”, says Fischer, and “the function of gas will change radically”.

One consequence of the energy transition that has not had much attention is the repercussions it will have on geopolitical relations. The existing “world order” owes much to global struggles over fossil fuel resources that have lasted for more than a century. As renewable energy is gradually replacing fossil fuels, a new “world order” looks likely to replace the existing one.

Researchers from Brussels-based think tank Bruegel and the European Council on Foreign Relations have looked into what the EU Green Deal means for Europe’s external relations. They conclude that the consequences will be profound. As one of them, Simone Tagliapietra, Energy & Climate Fellow at Bruegel, says in an interview with Gas Transitions, the Green Deal “will truly shape future EU foreign policy.”

According to Tagliapietra, soon Europe will no longer be dependent on Russian gas and oil anymore and already new gas infrastructure won’t be needed.

So what will be the next “prize”, to put it in Daniel Yergin’s terms? Probably not hydrogen, as many people think. More likely it will be battery storage. That at any rate is the conviction of Simon Moores of Benchmark Mineral Intelligence. In the most recent issue of the Oxford Energy Forum, Moores writes that we are on the verge of a “global lithium-ion economy”.

The number of battery giga-factories is exploding, notes Moores – and so, we at Gas Transitions have noticed, is the number of grid-scale battery storage systems, which are increasingly replacing gas peaking power plants in countries like the U.S. and Australia. We report on this in another special feature in this issue the magazine.

Net zero emissions does not necessarily mean, however, that natural gas will disappear. One way out for “fossil” gas is through “blue” hydrogen based on carbon capture and storage. CCS has been a struggle but there may be light at the end of the tunnel. Canadian technology provider Svante is ready to launch a new technology that it says will drastically reduce the cost of capturing carbon, especially in heavy industry.

The CEO of Svante, Claude Letourneau, even sees a new business model emerging around CCS, he says in an exclusive interview. He believes this will support the decarbonisation of industry worldwide – in North America to begin with.

Hydrogen and battery storage as the new oil and gas, new geopolitical realities, CCS as a new business model: what it all adds up to is that the transition is rapidly becoming the New Normal.