Industry makes a case for natural gas

(L to R) Mansar, Lee, Eik, unmentioned, Subedar

(L to R) Sabeur Mansar, Arthur Lee, Arne Eik, Afzal Subedar (second to right) and Laurent Fragu (right)

With COP 18 taking place on the grounds of the third largest natural gas reserve in the world, a side event addressing the industry’s approach was well in order. Organized by Petroleum Industry Environmental Conservation Association (IPIECA), a global association of natural gas companies and the industry’s main connection to the United Nations Environmental Program (UNEP), the side event served to “explore the expanding role of natural gas and make a link to climate change,” according to Sabeur Mansar, Vice President Commercial and NBD at Shell, Qatar.

“Qatar is the largest producer of liquefied natural gas, producing 77 million tons per annum,” he said, “there’s no better place or time to have this conversation.”

Arthur Lee, representing IPIECA, gave an overview of how natural gas is gradually taking a load off coal in projected estimates of fuel usage worldwide. He said that over the next ten years, the retirement of coal fired power plants will range anywhere from 11 to 22 percent depending on the price of natural gas rising or lowering, respectively, according to demand. With new exploratory techniques, however, the location and extraction of more natural gas from reserves worldwide has served to drive the cost down, he said.

“Natural gas has an enhanced role in power generation in scenarios that put a price on carbon emissions,” Lee said.

The industry has taken a great interest in understanding the precise GHG impact of natural gas systems, he added, with strategies in place to better manage emissions and compare the use of alternate technologies at every stage of its procurement and life cycle.

“In mitigation scenarios,” Lee said, “natural gas coupled with carbon capture and storage (CCS) plays an important role in the later half of this century, if and when there is an actual price on carbon.”

Since 2005, there’s been a decoupling of the price of oil and natural gas, with the later lowering significantly, again based on increased resource estimates. Natural gas has therefore experienced an increased level of usage in power generation and industry and is gaining interest as an export.

“It’s very well known that natural gas has half the carbon emissions as coal on a unit energy basis,” Lee said. “It’s a significantly better environmental performer than coal, and this has lead to US emissions reductions.”

Lee said that an independent body, the National Petroleum Council, comprised of experts from the petroleum industry, consultants, scientists and others, formed at the request of policy makers to evaluation natural gas technologies.

“We believe that gas is a not only a transition fuel but also a destination fuel,” Mansar said, beginning Shell’s portion of the event. “Science tells us that there is a cap to the amount of CO2 we can put in the atmosphere—as energy demand doubles, we have to halve CO2 emissions. There is no silver bullet. We need to manage the demand. We need input and to work together.”

Mansar spoke of the global energy mix predicted through 2050, with gas being a cornerstone since it is a cheap option among the alternatives. At the current rate of production, he said, there is enough natural gas to last 250 years.

Mansar explained halving of CO2 emissions must coincide with the projection of a doubling in global energy demand due to a future shift of many rural poor to urban and energy-intensive conditions

Mansar explains that halving of CO2 emissions must coincide with the projection of a doubling in global energy demand due to a future shift of many rural poor to urban and energy-intensive conditions

“We [Shell] see an interplay among renewable and natural gas,” Mansar said. “Renewables need gas, and the world needs both. Renewables need gas, because when wind is not blowing and sun is not shining, gas can fill the void.”

Mansar spoke of Shell’s long-term commitment to R&D related to natural gas, specifically gas-to-liquid (GTL) technology. “We’ve been committed to this for three decades,” he said.

“We believe there is a gas revolution, and it’s up to us to seize the opportunity. Gas needs to enjoy a level playing field … a robust trading scheme … carbon capture and storage projects … adequate regulations.”

Arne Eik, lead consultant, responsible for climate policy and market analysis at Statoil, a company overseeing the second largest exports of gas to Europe said: “We are facing a massive challenge. [Mitigating] the two degree scenario [in reference to the temperature rise that scientists predict would cause significant sea level rise] is very hard to reach, but we cannot give up.”

Under a more stringent climate policy, emissions costs would be higher, he said, and this is a development fully supported by Statoil and the industry.

“We have a climate strategy consisting of several elements,” Eik said. “We’re focusing on carbon efficiency with 2020 targets for various types of oil and gas. We’re focused on development and renewables; we want to bring gas to the market as a sustainable solution.”

On behalf of Statoil, Eik said that the EU ETS should remain the cornerstone of the climate policy in Europe—“If we don’t see higher prices than we see today, we will not see investments in cleaner technology, and we will not se switching from coal to gas. We would like to strengthen the EU ETS short term and long term, take out allowances … there are a lot of allowances now due to the special circumstances … we think it’s justified to remove allowances as a one-off thing to do… it’s important to have established emission reduction targets that stimulate fuel switching and investment in cleaner technology.”

Eik explains the constant natural gas demand projected over time compared to a drop around coal and oil

Eik explains the constant natural gas demand projected over time compared to a drop around coal and oil

Afzal Subedar, management specialist at Qatargas, spoke about GHG strategies in place at one of Qatar’s two major natural gas companies. Known for its Ras Laffan terminal and refinery, QatarGas is a venture between Qatar Petroleum, Total, ExxonMobil, ConocoPhillips, Shell, Mitsui, Marabeini, Idemitsu Kosan and Cosmo Oil.

“Our accounting and emissions reporting is based on EU ETS,” he said. “From 2009 onward we’ve come through evaluations with flying colors—there have been some challenges but we are very happy that we have overcome those, and we are trying to best manage our inventories and programs.”

He described a US$ 1billion project, Jetty Boil-Off Gas (JBOG) Recovery Project, which is “the largest environmental project of its kind in the world and purely environmental.”

It enables boil-off gas to be collected from RasGas and Qatargas LNG ships for compression at a central facility. When it’s fully operational, he said it will recover about 29 billion standard cubic feet per hear of gas that would have otherwise been flared (with a 90 percent recovery efficiency). This, he said, would be enough to power more than 300,000 homes and result in GHG emissions reductions of 1.6 million tons per annum.

Subedar explains specific strategies Qatargas has deployed since 2006 to address GHG emissions

Subedar explains specific strategies Qatargas has deployed since 2006 to address GHG emissions

Since the GHG strategies between Qatargas and RasGas align, Laurent Fragu, Environmental Engineering Specialist at RasGas, picked up from Subedar’s presentation to expand on his company’s role as related to and in line with Qatar’s sustainability goals. RasGas is a venture between Qatar Petroleum and ExxonMobil known for its Barzan gas and Ras Laffan helium projects. Fragu explained the efforts it’s making to reduce emissions at each step of the value chain, including acid gas removal, liquefaction, tail gas treatment to reduce emissions and increase efficiency, flare minimization, common facilities to reduce cargo emissions, large gas carriers with specialized engines and overall terminal enhancements to increase efficiency.

“Sustainability initiatives are part of the 2030 national vision,” he said. “We are currently looking at zero discharge for wastewater management, a biodiversity program and more approaches to mitigate environmental impacts.”

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