Natural gas: a key role in a sustainable energy future
We believe natural gas offers the following advantages:
- It emits about 50% less carbon dioxide than coal and can effect significant, immediate reductions in emissions when it replaces coal
- It is cost competitive in relation to coal and the construction costs of nuclear plants, and no subsidies are necessary
- It is flexible and can be used as back-up energy for enabling intermittent energy carriers such as wind and solar power
- It has the potential to be combined with carbon capture and storage (CCS) when this technology is matured
- It is an abundant resource, which is also illustrated by the potential of shale gas
The International Energy Agency estimates at least a 50% increase in global gas demand by 2035, and Statoil is well positioned to capture this growth.
However, for gas to fully play its role in the energy mix, political will is needed in both consuming and producing countries. For producing countries, it is important to ensure access to gas resources when demand increases. In Norway, for example, access to new exploration areas is essential to maintaining and growing our position as a reliable supplier of low-carbon energy. Moreover, while gas resources are abundant, a large number of projects will need to be developed to bring these resources to the market, and some of them are more challenging and costly than others.
Natural gas part of EU emissions reduction strategy
Statoil is the second-largest supplier of natural gas to the European market.
In 2011, Statoil took several initiatives to ensure that natural gas is properly addressed by EU policy makers in their attempt to define a "decarbonised" society. In October 2009, EU member states agreed on a target for the reduction of greenhouse gas emissions of 80-95% by the middle of the century compared with 1990 levels. The 2050 targets have led to discussion about how to design energy systems in the future and they have intensified the competition between different fuels for shares in Europe's future energy mix.
Together with Centrica, Eni, E.On-Ruhrgas, Gazprom Export, GdF-Suez, Qatar Petroleum and Shell, Statoil has taken part in the European Gas Advocacy Forum (EGAF), which produced a joint position paper in spring 2011 on how natural gas can help Europe to reach its target of an 80% emission reduction by 2050 . To promote the role of natural gas in Europe, Statoil also launched "The Gas Machine" campaign online in early 2011 .
Both Statoil and the position paper's main argument is that the use of natural gas in power generation offers significant emission reductions, is cost efficient and a proven technology. Replacing old coal plants with new natural gas-fired plants could lower carbon emissions by 70% per kilowatt-hour generated. This takes into account the entire life cycle from exploration and extraction through to decommissioning and disposal. Even the most modern coal plants emit twice as much carbon dioxide per kilowatt-hour as natural gas combined-cycle power plants.
In the medium term , combining investments in natural gas plants with renewable energy investments could ensure a secure supply of energy with reduced carbon dioxide emissions - even when the wind is not blowing or the sun is not shining. As natural gas-powered plants can start up or shut down within minutes, this flexibility can complement intermittent renewable energy sources.
In the long term , CCS could enable natural gas to play an important part in the energy mix in a decarbonised 2050. After 2030, CCS could be retrofitted to natural-gas power plants to achieve near-zero emissions. According to an IEA report from 2008, CCS technology alone could have the potential to reduce greenhouse gas emission by 20% by 2050. Mitigation targets can be reached up until 2030 using existing technologies. This would give us until 2030 to demonstrate the maturity of CCS technology.
Gas in transport and residential sector
The use of gas in transport can contribute significantly to dealing with local pollution and poor air quality. This is already true in countries such as Pakistan, India, Argentina, Iran and Brazil. At present, the transport sector represents a very small part of total gas consumption. Growth is strong, however, and, in some estimates, as much as 80-100 billion cubic metres of gas will be used in the transport sector towards 2030-35. For highly congested urban areas, electric vehicles in combination with vehicles that run on gas can make a big difference in combating both climate change and local pollution.
In a similar fashion, natural gas can work together with biomass in modern low-carbon heating systems in the residential sector. Gas can fuel combined heat and power systems, and even decentralised heat pumps. In fact, we believe that having natural gas available is often the decisive element that triggers the other elements in modern energy systems in which renewable energy plays an increasing role.
The shale gas revolution
The shale gas revolution has the potential to transform the global energy picture. Statoil has already secured important positions onshore in the USA and is well placed to take part in this development. As we increase our shale gas and shale oil energy presence in the USA, we will utilise our value chain expertise from Europe to maximise production value and ensure that environmental and climate challenges are properly addressed.