NATURAL GAS: MEETING THE CHALLENGES OF A SUSTAINABLE ENERGY FUTURE

Maarten was appointed Executive Vice President for Shell’s Integrated Gas Business on 1 January 2013. Based in Singapore, he is accountable for Shell’s global LNG and GTL businesses with geographic accountability for countries such as Australia, Qatar, New Zealand, Indonesia and Russia

The world is getting more crowded. Only an impactful figure: every day the global population grows by around 200,000 people, that’s roughly 73 million a year. At this rate, we will share the world with 9 billion people by 2050 – approximately 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 percent higher in 2040. It is important that we address adequately this growth while minimizing impacts on climate change and air pollution.

Natural gas, a unique key player

Shell is convinced that natural gas has a unique role to play. Its benefits can be seen when looking at energy security, energy access and environmental sustainability.

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.

More than 1.2 billion people around the world live without access to electricity, according to the World Bank. 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. 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. 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.

But there are also some other strong reasons why gas is such an important fuel in the future energy mix. Mainly its broad range of uses, from the traditional ones on . 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.

Policy choices

In order that all of these benefits of natural gas are realized, we need robust and stable policies and regulatory structures in place.

Today’s energy policies will clearly have an impact on generations to come. They will need to ensure 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 wellimplemented 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.

The industry must have a clear and consistent say 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. This is especially important given that the make-up of the long-term energy mix is driven by government policy and national politics, rather than market dynamics.

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 some 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. This is not only a discussion about the future of our companies or about our industry. The stakes are far higher. It’s about the future of the world we live in.

SOLUTIONS

One important step for policymakers to take is to introduce wellimplemented carbon pricing systems. This will help encourage the switch to cleanerburning natural gas to generate electricity

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