The Role of Natural Gas in the Energy Transition [GGP]

While industry outlooks for natural gas and LNG demand remain buoyant, question marks surround the role of gas in deep decarbonization scenarios consistent with the Paris Agreement’s climate goals. The near-term prospects for gas seem strong, for reasons reflecting the fuel’s superior air quality attributes in comparison with coal or liquid fuels. However, the credentials of gas as a transition fuel could be undermined if flaring, venting, and fugitive methane emissions along the natural gas supply chain are not significantly addressed. In the long term, the imperative to eliminate most fossil fuel-related greenhouse gas emissions—not just those associated with coal and oil, but also most of those associated with the burning of gas—could pose a profound challenge to the gas business as we know it.

The gas sector has started to embrace the idea of “greening” natural gas in order to reconcile the vision of a decarbonized energy system with projections of continued consumption of the fuel. This can be done by using more biomethane from organic sources or by blending hydrogen—produced either from water using renewable electricity (green hydrogen) or from natural gas combined with CCUS (blue hydrogen)—into existing natural gas networks. Some of these pathways could offer decarbonization at scale, including in hard-to-abate sectors, while extending the use of existing natural gas grids into the future. However, none of these pathways is particularly easy from an energy economics point of view, and by no means are they guaranteed to succeed.

READ:  The Role of Natural Gas in the Energy Transition, by Akos Losz and Jonathan Elkind, Columbia | SIPA Center on Global Energy Policy.


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