Greenhouse gases: Is natural gas the low hanging fruit?
In the lead up to Flame in May 2017, Dr. Wolfgang Peters, Managing Director at The Gas Value Chain, he gives insight into COP21. In May, he will be speaking in the sessions "The Future of Midstream Gas" and "Pipelines & Interconnectors".
The treaty of „COP21” (21st Conference of Parties under the United Nations Framework Convention on Climate Change) is widely perceived as decarbonization – understood as the abolishment of fossil fuels - being a “done deal”. The thrust of the agreement is however directed at the reduction of greenhouse gases (“GHGs”). It does not contain generally binding steps or targets to abolish fossil fuels. Its implementation hinges on individual pledges („Intended Nationally Determined Contributions“, „INDCs“) of the participating states for the reduction of GHGs. The INDCs vary in volume and content but also none of them prescribes the abolishment of fossil fuels. Moreover, it is undisputed amongst experts that the INDCs submitted in Paris do not suffice to achieve the 2 degree (let alone 1.5 degree) target. The author hypothesizes that such shortfall is essentially a manifestation of an affordable subsidies constraint in the face of renewables not (yet) having reached market maturity.
This conundrum is not widely known and has barely been discussed. It is, therefore, not surprising that individuals as well as lobby groups draw entirely different conclusions from COP21: From proclaiming the more or less “sudden death” of all fossil fuels without differentiating between coal, oil and natural gas to carrying on in “business as usual” fashion.
This article aims to demonstrate that the approach of COP21 must be understood as a reiterative process catering for “checkups” in 5 year intervals in order to work towards a progressive reduction of GHGs, to a large extent hinging on further technological progress and cost degression of renewables in order to overcome the affordable subsidy constraint.
In the meanwhile, the step-by-step approach of COP21 does not only legitimize, but rather dictates an imperative to push for a change in the mix amongst fossil fuels, namely in favor of the environmentally friendly natural gas. The author is of the decided opinion that natural gas is a „low hanging fruit“ in the quest for materially and immediately reducing GHGs. This is, to the detriment of climate protection, not recognized in Europe, and particularly not in Germany. In the following some of the aspects supporting the author’s hypothesis shall be discussed.
About Dr. Wolfgang Peters
Wolfgang has been working in the oil and gas industry for some 33 years: with Mobil, briefly with Duke and then with RWE, in different senior management positions straddling the entire value chain in a variety of countries. He retired from RWE as CEO of the Czech RWE Supply & Trading CZ a.s. in March 2016. Wolfgang now runs his own company, The Gas Value Chain Company (GVC). GVC offers i.a. project management and commercial support services. Wolfgang also acts as commercial expert in arbitrations and mediations. GVC supports gas advocacy and joined Eurogas as the first new “liaising member”.