Why plain old natural gas is the hottest thing at the 'Super Bowl' of energy
CBC
At a Texas energy conference that features some of the field's most innovative technology (scrubbing carbon from the skies and the race to build the world's first fusion power plant, for example) — this year, people can't stop talking about plain old natural gas.
The world's appetite for liquified natural gas (LNG) is expected to grow 40 per cent in the next five years, according to S&P Global, a financial information and analytics company. Natural gas hasn't historically been a hit with environmentalists, but executives say it's seeing greater demand and believe it will play a role in meeting a worldwide need for stable electricity and helping countries shift away from coal.
"Practicality and pragmatism will always win out," said Tengku Muhammad Taufik, CEO of Malaysia's multinational oil and gas company Petronas.
The commodity has a new lustre these days, thanks in part to the rise of AI. Data centres, which store computer systems and servers, suck up enormous amounts of electricity that needs to be available all hours of the day. Tech giants have cast a wide net to look for different energy sources to power data centres — including hydrogen, geothermal and nuclear power — and energy industry observers predict natural gas will be a big part of the mix, at least in the short term.
"Data centres and AI are energy hogs," Meg O'Neill, CEO of Australian oil and gas company Woodside Energy, told CBC News. "We ask ourselves, 'What's the energy source that's going to be most flexible to be able to meet that energy demand?' And we think LNG will play an even more important role."
Concerns around energy security, particularly in the wake of Russia's invasion of Ukraine has also spurred demand. O'Neill said buyers are returning to the table and asking for long-term LNG contracts.
"Last year, we signed 10-year deals with leading industrial players in Japan, Korea and Taiwan," she said. "They know that they're going to need LNG as part of their energy mix, and they want the price certainty."
Patrick Pouyanné, CEO of the French multinational energy company TotalEnergies, told an audience in Houston that gas-fired power plants can also help transition countries off coal. According to data and analytics firm Wood Mackenzie, burning gas produces only half the carbon dioxide as burning coal.
"I'm convinced gas will be the core of the energy transition," said Pouyanné. He said it can also play a role in shoring up the power generated by intermittent wind and solar.
There's truth to that, said Dan Grossman of the Environmental Defense Fund (EDF), but he noted that companies using natural gas have to make sure they're dealing with their methane emissions.
"If you really do want this to be the decade of gas, then from a climate perspective, you better make sure that you have your house in order when it comes to methane emissions," said Grossman, who is vice-president of energy transition with the U.S.-based environmental advocacy group.
A renewable energy developer also pushed back against the sunny portrayal of natural gas.
John Ketchum, the CEO of NextEra Energy, the largest producer of wind and solar power in the U.S., said it takes time to build a natural gas plant from scratch, and that labour shortages make the problem worse.
"To get your hands on a gas turbine right now and actually get it built throughout the market, you're really looking at 2030 or later," said Ketchum.
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