Gas comes natural to fast-growing Asia-Pacific

Energy professionals gathered recently at the Singapore International Energy Week to discuss Asia’s key energy issues.

They are arriving at the right time, as the region is facing the challenge of shaping a new energy system.

What will that energy system look like? If the use of coal continues to grow, the impact of climate change and air pollution can only increase.

Renewable sources like solar and hydropower are undoubtedly a crucial part of Asia’s energy future, but still face technical and commercial challenges.

Nuclear isn’t regarded as an acceptable alternative in many countries, especially after the Fukushima disaster of 2011.

So, in my view, natural gas could and should play a crucial role in the Asian energy mix.

The global challenge is clear enough. The world’s energy needs are growing at a fast rate. In the coming decades, there will be more people, more people living in cities, and more people with improving living standards.

This is especially true for Asia.

The International Energy Agency (IEA) says that global demand is likely to increase by a third from 2011 to 2035— with China, India and other Asian countries accounting for a major part of demand growth.

At the same time, Asia faces major environmental challenges. So the region doesn’t only need more energy, it needs cleaner energy, too. And, looking at Asia’s reliance on energy imports, it also needs an economically sustainable energy mix.

Here, natural gas could be of great help. It is abundant, affordable and acceptable.

Abundant, since the IEA estimates that the world holds enough technically available gas resources for over 235 years of production at today’s rates. It’s also linked to international markets through an expanding network of pipelines and supply chains of liquefied natural gas (LNG).

Affordable, because in Asia, according to the analysts of Energy Intelligence, a gas-fired plant is two times less capital intensive than coal and onshore wind, four times less than nuclear, and seven times less than offshore wind. And gas becomes increasingly competitive when you look at the full cost of electricity generation.

This includes immediate costs of production, but also anticipated costs linked with climate change and air pollution caused by burning coal.

And acceptable, for gas is cleaner-burning than other hydrocarbons. When burned for power generation, for example, it emits 50 percent less carbon dioxide (CO2) than coal. And carbon capture and storage can make it cleaner still by capturing 90 percent of its CO2.

Compared to coal, gas also emits less than a third as much nitrogen oxides, 1 percent as much sulfur oxides, and a negligible amount of the small particles that pollute the air of many Asian cities.

How about renewables? Renewables alone, at least in the medium term, can’t meet the total demand for energy. The IEA says that the global share of renewables in primary energy use could rise to 18 percent in 2035.

Renewables also depend on flexible back-up when the wind doesn’t blow or the sun doesn’t shine.

Gas offers this flexibility in power generation, but also in transport, industrial and residential use.

For many countries in Asia, gas is the fastest and most cost-effective way to secure energy supply, while bolstering the fight against climate change and air pollution.

(Maarten Wetselaar is executive vice president of Shell’s integrated gas business.)