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Time to intensify green drive

With energy demand set to double this century, carbon emissions need to be reduced and renewable energy will be essential

US President Donald Trump's decision to withdraw the United States from the landmark Paris climate accord must not become a distraction from urgent global efforts to combat climate change.

Countries in Asia were among the most committed supporters of the Paris goals. Now is not the time to break stride but to reinforce the resolve.

Energy demand is set to double this century, with the world's population reaching 11 billion, up from 7.5 billion today. As the world changes, so will the energy system that powers it, driven by the need to reduce carbon emissions and - crucially for Asia - tackle the deadly air pollution that blights so many lives.

Coal is a big contributor to that pollution. This can, and must, change. Put simply: We will need more and cleaner energy if Asian countries are to thrive in the coming decades.

Today, coal is still the biggest source of power in the region, at 47 per cent of the power mix, compared to natural gas at 10 per cent. In some countries, coal's share is rising.

For Asia's population, renewable energy will be essential to meeting growing demand while tackling climate change and air pollution.

But renewables chiefly produce electricity. There are parts of the economy, such as industries producing iron, steel, cement, plastic and chemicals, that cannot be electrified yet - certainly not at a reasonable cost. That is one reason why the world will still need oil and gas in large quantities in the coming decades.

During this time, we will see a big change in the way energy is produced, used and made available to people. And I see a combination of renewables, such as wind and solar, and natural gas - the cleanest-burning hydrocarbon - playing an increasingly important role. Gas-fired power plants can quickly respond to an increase in demand for electricity when there is no sunlight or little wind.

By the end of the century, many millions of people in emerging economies will join the middle class. Most will use mobile phones and refrigerators. Many will drive cars - or travel in self-driving cars - as their quality of life improves.

All these will create enormous pressures on the global energy system.

At the same time, we face serious environmental challenges. What kind of air will our children and grandchildren breathe? How will climate change impact the quality of life of people in the most exposed areas, such as coastal regions?

Natural gas is one of the few energy sources that can be used across all sectors of the global economy, including fuelling transport, heating and lighting homes, and powering industries. Reserves are abundant and available in many regions.

The environmental benefits are also clear. In power generation, for example, natural gas emits around half the carbon dioxide emissions and less than one-tenth of air pollutants compared to coal. Some countries are already taking significant steps to boost the use of gas.

GREATER USE OF LNG

China plans to raise the share of gas in primary energy from 6 per cent today to 15 per cent by 2030. It is also widely using gas for transport, with more than 200,000 trucks and buses fuelled by liquefied natural gas (LNG).

In the city of Lanzhou, strict air pollution policies reduced coal consumption by 40 per cent and significantly increased the number of days with clear skies between 2012 and last year.

Elsewhere, in India, where gas makes up only 8 per cent of the energy mix, the government is moving towards a greater use of gas in the economy, creating infrastructure such as gas pipelines and LNG terminals. In Gujarat, India's most industrialised state, gas now makes up 25 per cent of the energy system, fuelling transport and cooking, as well as major plants producing petrochemicals, fertilisers and glass.

Policies of successive governments will determine the extent to which gas will play a key role in the coming decades. Their decisions must reflect the commitments made at the UN Paris climate summit.

Government-led mechanisms that put a price on carbon dioxide emissions will stimulate the development of low-carbon and renewable technologies. Singapore, for example, will be the first country in South-east Asia to have a carbon tax to encourage industries to reduce emissions.

Beyond policy choices from governments, a lot will also depend on the action of energy companies.

For Shell's part, we continue to increase our investment in gas, now around half of our total production. And we are exploring commercial opportunities in areas such as biofuels, hydrogen and wind power.

Governments, companies and consumers have the power to shape a new energy future, where renewables and natural gas play critical roles. Now is the time to step up the drive to deliver on the environmental pledges made in Paris.


The writer is integrated gas & new energies director at Royal Dutch Shell. This article appeared in 
The Business Times last Friday.

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