PTQ Gas 2022 Issue

tion also presents another oppor- tunity for natural gas to have a long-term play in decarbonisation. Hydrogen can be produced in many ways, with two chief meth- ods being through steam methane reforming (SMR) and auto thermal reforming (ATR), which use natural gas combined with carbon capture, utilisation and storage (CCUS) tech- nologies to create low carbon inten- sity hydrogen (known generically as blue hydrogen). In this capacity, hydrogen from a natural gas feedstock can support the development of the low-carbon hydrogen market, stimulating the development of end-use applica- tions in addition to hydrogen pro- duced using 100% renewable energy (also known generically as green hydrogen). Ammonia applications Ammonia production offers a sim - ilar application to natural gas in a decarbonised world. Much like blue hydrogen, blue ammonia can be produced with hydrogen from natural gas paired with CCUS. Ammonia has many end-use appli- cations, including as a clean-burning fuel and a method for transporting energy. Ammonia for use as energy and storage offers an opportunity to scale demand for ammonia, both blue and green, which can add to the decarbonised solutions in the world portfolio, especially in hard-to-abate industries such as overseas shipping. The clean energy transition is fre- quently discussed as a journey with a clear destination, assuming the effort will be over once the world finally reaches net zero, and the energy sector can coast on from there. Unfortunately, this is unrealistic. Energy consumption will continue to increase, especially in the developing world, and the definition of sustaina - bility will shift with our understand- ing of the world around us. Beyond the transition However, when it comes to natural gas’s enduring role in our economy, it is useful to think of a ‘beyond’ the energy transition, to illustrate how natural gas will remain crucial to many industries. Further, we must

of domestic clean and renewable energy assets will, of course, play an increasingly critical role in meet- ing decarbonisation goals. To help accelerate the transition, natural gas will remain an important part of the global energy portfolio, helping to meet demand, and do so affordably. Diversification To develop clean energy assets in a meaningful way, we will need a healthy blend of different tech - nologies, including solar, wind, hydrogen, hydropower, geother- mal, biomass, ammonia, natural gas, nuclear, and more, to establish a net- zero economy. A prime example centres around the intermittency, or variability, of renewable assets, namely wind and solar. When the sun isn’t shining and the wind isn’t blowing, power sup- ply dips, making it difficult to match demand. In these cases, natural gas-powered quick-start engines can provide a solution, adding to supply when the renewable assets fall short. This strategy was recently deployed in California, where Gov. Newsome declared a state of emer - gency for the power grid over con- cerns solar supply would be unable to match summer energy demand in conjunction with an ongoing deple- tion of hydroelectric supplies due to extended drought. In response, the California Department of Water Resources added four temporary gas-fuelled generators, totalling 120 MW, to existing power plants to sta- bilise energy supply. Hydrogen goals Hydrogen can also benefit from the support of natural gas. The immedi- ate goal with hydrogen is to stimu- late the market to increase demand for the clean fuel while simultane- ously building out supply, which will help further scale the low-car- bon hydrogen market for wider adoption. Today’s levellised cost of low car- bon intensity hydrogen isn’t cur- rently competitive with natural gas, diesel, or gasoline on its own, and while many end-use applications exist, sufficient scale has yet to be obtained to bring down costs to a competitive rate. Hydrogen produc-

Natural gas: cleanenergy transition So, what is the solution? How can countries achieve energy independ- ence? The seemingly obvious answer would be to charge ahead on renew- able energy build-out; however, technological shortcomings, par- ticularly around intermittency and long-term storage, continue to limit this as the only solution. The more realistic solution lies in pairing clean energy generation with natural gas. This will help support and accelerate the net-zero transition for decades to come. Though some argue that a clean energy landscape requires the elim- ination of all fossil fuels (including natural gas), clean energy without the help of natural gas will not allow the world to hit its decarbonising tar- gets in the time-frame laid out. Of course, reaching a status of full net-zero emissions is the goal, but to keep society running at the energy intensity with which it currently operates, the only realistic path- way to a decarbonised world must involve natural gas as part of the solution. Bankability of decarbonised projects adds to the allure of nat- ural gas. For most countries, it is simply not feasible to direct ade- quate resources to fully transition to renewable energy on a timeline quick enough to provide benefits in the medium term. But many areas are gifted with natural gas reserves that can be responsibly leveraged locally or regionally to help lower emissions across the energy and fuel landscapes. Multiple solutions For example, floating LNG pro - jects can provide access to stranded undersea gas reserves, which can help accelerate the clean energy tran- sition for many developing nations. The same goes for the Middle East and North Africa, which have sig - nificant resources of both natural gas and renewables. The prudent choice is to leverage multiple solutions and resources that, together, form the new clean energy economy. As countries continue their pur- suits of energy independence, seek- ing energy prices independent of global markets, the development

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