Getting to net-zero CO2 emissions by 2050 is doable but difficult. For the global energy sector to hit that goal, governments must stop subsidizing oil and natural gas production and inhibit the building of coal plants. That’s the conclusion reached by the International Energy Agency.
With that as the context, OurEnergyPolicy convened leaders in the natural gas sector to discuss their role in the global energy picture. Their premise: the goal is paramount and not the promotion of specific fuels — or, conversely, the elimination of natural gas. That resource will remain a staple in the home-heating business and also be used to firm up renewable resources when the weather does not permit it.
“When we were talking about transitioning out of coal, natural gas was the bridge fuel,” says Paula Glover, president of the Alliance to Save Energy during the webinar. It still has a huge role to play. As long as we are focused on addressing the big challenges — decarbonizing our system — then the fuels we use to get there are less relevant. Affordability is key.”
The U.S. Energy Information Administration says that natural gas comprises 36% of the electric generation portfolio while coal is at 19% and falling. Natural gas has been replacing coal because it releases about half the emissions when it is burned in a power plant. Wind and solar make up 10%, although their outlook is much brighter. Nuclear energy makes up 20% of the country’s electricity composition while it represents 60% of its carbon-free generation.
Britain’s BP is trying to get out front of the movement: it just set a goal of hitting net-zero by 2050 while also saying that it would cut the carbon intensity of its products in half by 2050. Meantime, it is monitoring its sites to control methane leaks — an offshoot of natural gas that is a potent greenhouse gas.
The company says that the coal-to-natural gas transition has reduced CO2 emissions by hundreds of millions of tons over the last decade. By 2040, it adds, renewable energy will comprise 14% of the electric generation pie — meaning that natural gas will have to kick in and back it up. It also says that technologies and the economics underlying carbon capture and sequestration are improving
At the same time, it is imploring the European Commission to recognize natural gas’ benefits. The commission is now strategizing how to reach net-zero by 2050 and it is considering whether to dissuade investments in gas plants. At the same time, energy ministers from the world’s richest nations (G7) just met over two days and agreed to stop funding new coal development.
A similar noose is also around the neck of both coal and natural gas in the United States, specifically in such states like California and New York. But natural gas’ advocates say that aggressively electrifying everything is unreasonable — that the discussions must be “fact-based” and centered on low-carbon fuels.
“We are shifting the company to an integrated energy company,” says Orlando Alvarez, chief executive of BP Energy Co., at the webinar. “Our portfolio of fuels is changing. But hydrocarbons are core to our strategy and we believe that natural gas has a future in that. It can enable the transition. We are making sure that natural gas is in the narrative. This is not a race to renewables but a race to lower carbon.”
The American Gas Association AHA adds that natural gas delivers three times more energy on the coldest days of the year than does the electric system on the hottest days.
But the wind is at the back of clean energies. Globally, the International Energy Agency is calling for “the immediate and massive deployment” of those technologies. And by 2035, it says that carmakers should only build electric vehicles. Solar photovoltaic installations should reach 630,000 megawatts by 2030 while wind energy should hit 390,000 megawatts, its roadmap says. Altogether, that is four times the record set in 2020. Energy efficiency improvements, too, are vital — enough to reduce energy use by 4% a year through 2030.
“Net-zero means a huge decline in the use of fossil fuels,” the energy agency says.
Indeed, Andrew Forrest, the founder of Australia’s Fortescue Metals Group, sees it the same way. In a fireside chat sponsored by the Atlantic Council, he said the global community is at a crossroad: given the population surge and the expected need for more energy, going entirely green is the only plausible option. And he was particularly critical of the notion that carbon capture was imminent or that fossil fuels should be used to produce hydrogen.
The key to the hydrogen economy, he adds, is to scale up the technology. Electroayzers, which create an electric current to split apart the hydrogen and oxygen from the water where it is found, must be the focus. Enapter, for example, says that’s its electrolyzer is getting better, cheaper, and more reliable because its cutting-edge tools are standardized and mass-produced.
“That future is right upon us,” says Dr. Forrest. “Developing countries want to see this happen. They do not want to be hogtied by oil and gas companies. Think you will put carbon back into the ground? This is the perennial lie. There’s only one solution: clean hydrogen, which produces no carbon.” ‘Blue hydrogen’ produced from natural gas “just kicks the can down the road.”
Most experts say that the United States can get 70% of the way to its net-zero goals by 2035. The technologies to do so now exist. But the real challenge is to get the rest of the way. This country, specifically, will have to double the current pace of investment over the next 15 years. The cornerstone of such research will be on energy efficiency, decarbonized electricity, and electrification in transportation, buildings, and industry.
As for hydrogen, 70 million tons a year are created: natural gas accounts for 75% of all hydrogen production. Incredibly, 98% of that production comes from using carbon-intensive sources. Green energy, in contrast, is limitless and free — a strong incentive to make the leap from “blue” to “green” hydrogen.
Hydrogen is being tested for power generation. It is currently used to make such products as steel and ammonia. Dr. Forrest says that “green ammonia” is now used in trucking and shipping, which he sees as the “low-hanging fruit.”
Ponder: oil and natural gas pipelines can be used to transport that hydrogen — up to 20% by volume. Furthermore, getting to net-zero will require the use of energy storage. That does not just involve battery storage used to warehouse solar and wind electrons. It also includes pipelines, which can hold natural gas and release it when the sun has died down or the wind stops blowing.
“Natural gas is used as a punching bag,” says Ross Turrini, chief gas operating officer, National Grid. “It’s the American underdog. In 2050, you will see that gas systems have been a major part of that transition. The future is not ‘no gas,’ it is ‘less gas.’ This is a 30-year transition. A lot of R/D has to happen. It has to be a thoughtful, engineered transition. And affordability is critical.”
Pressure is building to limit temperature increases and to hit net-zero goals. The International Energy Agency understands the mission, forcing it to make a declarative statement — that fossil fuel funding must go. No doubt, governments are providing incentives to develop new technologies and clean energy. But oil and gas consumption won’t cease. Those emissions must be offset while the oil and natural gas giants are prodded to be all-inclusive energy providers.
