26 Aug 2015
Natural Gas Flaunts its Green Credentials at World Gas Conference
Delegates at this year's World Gas Conference in Paris were keen to emphasise the environmental advantages of natural gas over coal, although concerns remained as to overall consumer acceptability, hard-to-trace leaks and emissions.
With oil prices down below the US$60 barrel mark, the industry is suffering deep depression. Despite this, delegates and exhibitors at this year's tri-annual World Gas Conference in Paris were on something of high, buoyed by the prospect of the expanding opportunities for gas.
Many speakers and exhibitors were keen to present natural gas as an environmentally-friendly source of energy compared to oil and coal, as it emits less carbon dioxide (CO2). This view, however, is not universally held. Indeed, a number of detractors did point out that the gas still releases greenhouse emissions into the atmosphere, while there were also some concerns that many markets might be resistant to piping an explosive gas directly into people's homes.
The overall theme for the conference was Growing Together Towards a Friendly Planet, with each day of the event also having an individual theme. On day one – catchily billed as Natural Gas as a Core Pillar for a Sustainable Future for the Planet – the industry message was that natural gas surely would scuttle coal and slow down runaway global warming. Representatives of Exxon Mobil, Chevron, Royal Dutch Shell and BP all queued up to describe how natural gas releases around 30% less CO2 than fuel oil and about 60% less than coal.
A number of environmentalists, however, claim that with atmospheric CO2 levels approaching 400 ppm, the last thing the planet needs is energy companies championing one fossil fuel over another. Switching to gas, they argue, will merely slow down mankind's dangerous atmospheric experiment, while starving alternative energy projects of the brainpower and funding needed to make them viable.
Despite investor and state-owned energy companies dominating the list of top emitters, it was clear that, collectively, the big energy companies see natural gas as the primary solution to environmental and energy supply problems. The opening speakers repeatedly associated natural gas with environmental benefits and sustainability. Ben van Beurden, Chief Executive Officer of Shell, headquartered in Holland, also linked sustainability with social, economic and environmental causes throughout his keynote presentation.
Van Beurden's message singled out cheap coal as the carbon demon, but did not mention oil, the lifeblood of his business. He said: "The emergence of a coal-plus-renewables energy system could see emissions in countries such as Germany either reducing too slowly or going up. It's like the approach of a second-hand car salesman – buy now pay later, but with huge interest."
Rex R. Tillerson, Chairman and CEO of Exxon Mobil Corporation, based in Dallas, opened his keynote speech by trumpeting the success of US shale gas, both in economic and environmental terms. The energy boss soon hit a more somber note, however, saying: "One in seven of the world's population has no electricity. Two out of five rely on burning wood, charcoal and animal waste for their basic energy needs. The World Health Organisation estimates that four million people died from household pollution in 2012."
Tillerson continued by describing how the US shale gas boom had reduced the country's CO2 emissions and boosted its economy by 60%. He said: "This was achieved without the US having a comprehensive carbon policy." He claimed the environmental improvement across the US was: "primarily because of the energy industry's commitment to investment in new technologies and operational improvements." Some commentators attribute the emissions reduction in the US to market forces, with energy producers switching from coal to gas due to the abundance of cheap gas following the fracking revolution.
High on the agenda was the practice of routine gas flaring. More than the entire annual gas consumption of China (140 billion m³) of valuable gas is apparently wasted, emitting some 350 million tons of CO2. In 2012, Russia, Nigeria and Iran alone wasted around 60 billion m³ of gas between them.
Ahead of the Conference of the Parties (COP21) to the UN Framework Convention on Climate Change (UNFCCC) also to be held in Paris at the end of 2015, the Global Gas Flaring Reduction Partnership (GGFRP) is searching for solutions.
The second day's more optimistic theme was Gas, Renewables and Electricity: Together a Perfect Combination. While it was generally accepted that gas is cleaner than oil and coal, it is not as widely adopted as a home heating fuel. In France, for instance, the use of gas is around 27.6%, still lagging behind wood (28.1%) as a preferred heating fuel.
Piping gas directly into homes and encouraging consumers to use it for heating is also proving challenging in Australia. Andrew Staniford, Chief Operating Officer of the Australian Gas Network, brought both good and bad news to the conference. The good news was that effective marketing had increased new existing home connections. The bad news took stock of dwindling price competitiveness and consumer use, along with a real threat from reverse-cycle air conditioning units, with consumers now apparently asking: "Why have two systems when we can have one?"
Not entirely agreeing with the concept of gas as the perfect transitionary fuel, Professor Edmilson Moutinho de Santos of the Institute of Energy and Environment, University of Sao Paulo, was promoting the direct use of gas beyond gas-to-power scenarios. De Santos believes, though, that breaking down consumer cultural preferences for electro-thermal heat (already delivered by Brazil's controversial hydropower mega-dams) will be extremely difficult.
China, in particular, has a growing interest in increasing the natural gas share of its total energy sourcing to around 10% by 2020, a move largely motivated by its desire to offset its rising air pollution and reliance on dirtier coal and oil. China is also increasing its focus on renewable technologies, with wind power generation up 25% compared to virtually zero a decade ago, with a total of more than $80 billion spent on the sector in 2014.
Natural Gas as a Growth Factor for the New Economies was the theme for day three. Ali Moshiri, President of California-based Chevron Africa & Latin America, was keen to acknowledge the enormous potential of the Asia-pacific market, with gas demand in the region predicted to grow by 47% between 2013 and 2035. He was also swift to point out, though, that gas infrastructure would be the key enabler within the supply and demand dynamic.
In his presentation, Liu Yuzhang, a Research Professor with Beijing-based PetroChina, described how commercially-viable shale gas was abundant in China. According to Liu, 200 wells had been drilled in 2015, rendering an estimated yield of five billion cubic metres of shale gas.
Day four's theme – Human Capital for the Future of the Gas Industry – focussed on the talent required to realise the potential of natural gas. The recent downturn in oil prices saw many global companies lay off staff in cost-control exercises. Inevitably, then, gaps in the numbers of available talent will occur in the future, with potential recruits having be forced toward other industries. Antoine Rostand, Managing Director of Texas-based Schlumberger Business Consulting, warned that demand for experienced petrochemical professionals in 2018 would outstrip supply by 80%.
In the exhibition hall, though, there was little sign of austerity, with exhibitors sparing no expense in the battle for attention. Gazprom's stand featured a full-size volleyball court, complete with girls wearing the obligatory volleyball bikini. Another hit with thrill-seekers was Exxon Mobil's full-size racing car simulator, while Yemen LNG entertained delegates behind the towering white walls of its very own traditional-style fortress.
Overall, interest in Liquefied Natural Gas (LNG) was high. Hazrin Hanim Binti Rani, Business Planning and Commercial Analyst for Malaysia's Petronas Floating LNG (PFLNG), was in Paris to promote the advantages of the company's $1.5-2.5 billion floating LNG processing vessels. He said: "Once operational, PFLNG1 & 2 will change the landscape of the LNG business, with the vessels capable of processing a capacity of 1.2 and 1.5 million tonnes per annum respectively.
"Where liquefaction, production, processing and offloading was previously only possible onshore, it can now all be done hundreds of kilometres offshore in closer proximity to the gas source." PFLNG1 is targetted for commissioning in 2016 on the Kanowit Field, off Sarawak, with PFLNG2 expected to start servicing the Rotan Field, off Sabah, in 2018.
Spirits were also high on the Woodside stand, where interest in FLNG as a preferred development concept was a hot topic. Lying up to 700 m beneath the sea, 425 km north of Broome, Western Australia, are an estimated 4.3 billion m³ of dry gas and 453 million barrels of condensate. Woodside, headquartered in Perth, describes its Browse FLNG venture as a 'mega-project' that could yield 3.9 mtpa of LNG, 22,000 barrels per day of condensate, as well as 1,000 jobs. The Browse FLNG could also earn the Australian government billions of dollars in tax revenue over its estimated 40-50-year lifespan.
While many at this year's event presented gas as a low emission alternative to oil and coal, gas leakage from aging underground pipes was also identified as a potent source of greenhouse emissions and one that is notoriously difficult to detect. In the US, there are 3.9 million kilometres of natural gas pipelines, with much of the older stock noticeably deteriorating and possibly leaking. China has 400,000 km of urban gas pipeline, with plans to expand to 600,000 km.
As many pressures sensors fitted to existing pipelines are not accurate, a new monitoring solution – the BeiDou Navigation Satellite System (BDS) – has been implemented. This will soon expand from 10 cities to 100, according to Beijing's National Administration of Surveying, Mapping, and Geoinformation.
A range of equipment designed to pinpoint underground leaks accurately was on display at the event. Sun Liang, a representative of Germany's Serewin, was keen to introduce the company's range of hand-held methane gas detectors and its automobile-mounted Leakplotter system. He said: "Many leaking pipes are buried under road surfaces, so being able to drive while you detect and measure makes sense.
"The Leakplotter records actual measured concentration of leaking gas, giving a permanent record of actual speed and concentration. The data can be accessed via a laptop and more accurate locations pinpointed."
Switzerland-based Pergam-Suisse AG, meanwhile, had on offer its ALMA (Airborne Laser Methane Assessment) detection helicopter system. ALMA's 1.65µm wavelength is designed to detect methane near the first absorption band of methane and is said to offer an economical detection solution for longer transmission pipelines.
The Pergam-Suisse AG team was also displaying its 6.5 kg, Class 3R Laser Methane Copter (LMC). Remotely operated, this pre-coordinated mini-copter system has the obvious advantages of being able to track over those less accessible locations that emit fugitive bio-methane gas, such as landfill sites or pipelines, where scaffolding would otherwise have to be used.
The 26th World Gas Conference was held from 1-5 June at the Paris Expo Conference and Exhibition Centre. Some 3,500 delegates from 91 countries attended the event, representing an estimated 95% of the global gas market. Over 500 speakers addressed delegates across the four days, while more than 600 organisations were represented in the 45,000 m² exhibition hall.
Steve Daniels, Special Correspondent, Paris