The world is getting more crowded. It’s amazing to think that every day the global population grows by around 200,000 people. That’s roughly 73 million a year, or nearly nine times the population of Greater London. At this rate, we will share the world with 9 billion people by 2050 – roughly 2 billion more than today.
As the world’s population increases and economic growth leads to a rising middle-class, there will be a greater desire for products and lifestyles with one thing in common: they require energy. In fact, the increase in population and prosperity is going to lead energy demand being 37% higher in 2040.
How are we going to power this growth while minimising impacts on climate change and air pollution? I had the opportunity to address this question at this year’s International Petroleum (IP) Week in London.
In my speech, I argued that natural gas has a unique role to play. Its benefits can be seen when looking at energy security, energy access and environmental sustainability.
Role of natural gas
With regard to energy security, natural gas is abundant. There are enough recoverable natural gas resources to last around 230 years at current levels of consumption, according to the International Energy Agency. Gas can also be used to help countries deal with short-term supply disruptions. In the aftermath of the Fukushima disaster, by connecting into the global gas market, Japan was able to rely on LNG to make up some of its lost electricity supply after the nuclear reactors were shut down.
More than 1.2 billion people around the world live without access to electricity. That means no lights to study by in the evenings. No way to operate computers and charge phones. No fridge to store medicines. That’s a significant barrier to education, communication and healthcare, and much more besides. Natural gas can serve as part of the solution because of its versatility; a gas-fired plant takes much less time to start and stop than coal plants. This versatility makes gas an ideal back-up for other variable energy sources like solar and wind power.
Natural gas, when partnered with renewables, can also play a leading role in attaining environmental sustainability and decreasing air pollution. You see, gas is the cleanest-burning fossil fuel, producing less than half the carbon dioxide and just one tenth of the air pollutants that coal does when burnt to generate electricity. This benefit is being realised in Beijing, for example, where steps are being taken to switch all power generation from coal to gas.
Why else is gas such an important fuel in the future energy mix? For me, the answer lies in its broad range of uses. While it’s traditionally been used to heat and light homes and businesses and power industries, other exciting markets are opening up, including using liquefied natural gas as an alternative to diesel and heavy fuel oil in transportation.
So how can all of these benefits of natural gas be realised? For me, the answer is clear: robust and stable policies and regulatory structures are needed.
Today’s energy policies will clearly have an impact on generations to come. It’s not simply about having electricity available at the flick of a switch, 24 hours a day. It’s about ensuring a sustainable, reliable and competitive supply of energy; one that facilitates growth while tackling the consequences of climate change, as well as rising local air pollution.
Shell believes that one important step for policymakers to take is to introduce well-implemented carbon pricing systems. This will help encourage the switch to cleaner-burning natural gas to generate electricity. We’re not alone on this point. The US Federal Government, the World Bank and the OECD are among those calling for a carbon price.
What can industry do?
I don’t believe the gas industry has done a good enough job of engaging with governments in the policy debate. This must change.
It’s absolutely critical that, moving forward, the industry speaks with one voice. If we fail to do so, there’s a danger that our individual voices drown each other out.
2015 could be a pivotal year, with world leaders coming together to discuss the Sustainable Development Goals at the UN General Assembly in New York, where they’re expected to adopt a set of targets, which build on the Millennium Development Goals. One of the proposed new targets is access to energy for all the world’s citizens. Later in the year, in Paris, the UN will shine an intense spotlight on climate change.
In the run up to these meetings there will be heated discussions focused on bringing the world closer to meeting these challenges. The gas industry could watch all this work play out from the sidelines. Or it could take a different path. A path where it actually influences proceedings. Where it offers integrated solutions and let its united voice be heard loudly, consistently and clearly.
In my IP week speech, I urged all industry representatives to make their contribution count. Because this isn’t just about the future of the gas industry, or the companies that work in it. The stakes are far higher. It’s about the future of the world we live in.
Photo Credit: Sustainable Energy and the Future/shutterstock