CERAWEEK: Natural gas called key to rapid, low-cost decarbonization worldwide

Natural gas has an important role to play in the global energy transition as the quickest and most cost-effective solution to decarbonization, but producers and exporters have a duty to keep that transition an inclusive one, conference panelists said March 9.

Over the past 15 years, the US shale gas revolution has allowed a great many power generators to make the shift from coal to gas-fired power, significantly reducing the US emissions profile. Panelists speaking from the CERAWeek by S&P Global energy conference in Houston said they believed the same can and should happen on a global scale.

"Pennsylvania and Ohio led the US in absolute emissions reductions between 2005 and 2019 -- they did so with less than 5% renewables, and they did it by replacing coal with gas," said William Jordan, executive vice president and general counsel for EQT.

Over that same period, Jordan said West Virginia actually reduced its carbon emissions by more than California. By the same logic, he said he believed the best way to decarbonize the world is by doing the same in countries like China and India, where coal remains a key component of the power sector.

In 2021, coal generated roughly 900 billion kWh of electricity in the US market. Thanks to a wave of coal plant retirements and combined-cycle gas newbuilds over the past decade, that's down from peak levels around 2 trillion kWh in the late 2000s, according to data from the US Energy Information Administration.

With some 3 billion people worldwide still using biomass for cooking and heating, gas can and should play a significant role in supplying lower carbon power to parts of Africa and Asia, said Robert Neff, president of Chevron Middle East, Africa and South America Exploration and Production.

Emissions reduction

The natural gas industry's most effective short-term decarbonization strategy remains up for debate, though, with several panelists emphasizing the need for strict carbon measurement in the upstream and midstream sectors, along with carbon offsets where mitigation efforts are more challenging.

There's a kind of social license required to operate, said Andrew Walker, vice president, LNG strategy and communications for Cheniere Energy. According to Walker, Cheniere plans to begin providing emissions-related information on LNG cargoes this year, allowing end-users to make informed decisions with regard to carbon and methane emissions.

Over the past year, certified gas has emerged as a key future component of the US market, with producers like EQT and Southwestern committing to upstream methane measurement and abatement. Several platforms to facilitate the trading and tracking of certified gas certificates -- either bundled with physical natural gas or unbundled -- have also emerged, including the MiQ Digital Registry and Xpansiv.

A call for inclusivity

As consumers in the US and Europe look to cut their emissions footprint, Jordan said is was important for the industry not to lose sight of issues related to energy poverty and inclusiveness

"We need to think beyond our borders," he said. "Two-thirds of the world's recoverable resources are in just four countries -- the US, Russia, Iran and Qatar -- so energy poverty is something we can't forget when pursuing decarbonization strategies."