Gas industry, it's time to cross the bridge

The natural gas industry is seeking to establish itself as the preferred "bridging solution" ahead of nuclear energy. But instead of rejoicing at the troubles of nuclear energy in the wake of the Fukushima accident, the gas sector would do better to prepare itself for a future without fossil fuels.

Until recently the natural gas industry had put every effort into establishing natural gas rather than nuclear power as the alternative "bridge" to the carbon-free energy future. But now that Fukushima has made the supposed global "renaissance" of nuclear energy seem even less likely to occur than it did before, the natural gas industry sees itself as the winner and is exulting in its position as the only alternative energy source. However, pride often comes before a fall, and the natural gas industry has yet to prove that it can satisfy the energy needs of the future.

Seizing the opportunity provided by the shift towards renewable sources of energy, the natural gas industry has for a long time advertised itself as ecologically sustainable: natural gas is described as the “clean fossil fuel” and the traditional glossy blue marketing brochures are becoming increasingly green. It is true that the specific CO2 emissions from the combustion of natural gas are significantly lower than those of crude oil and of coal in particular. In addition, natural gas power plants offer the most efficient fuel utilisation of all thermal power plants, which means less energy wastage. Natural gas plants can also quickly vary their output and therefore represent a convenient standby option as increasing use is made of wind and solar energy, which tend to be intermittent and unpredictable.

But all is not as rosy as it seems. Natural gas has its own environmental drawbacks. Radioactive sludge is produced as a by-product of natural gas extraction. The mining of unconventional shale gas, which the industry has big hopes for, causes significant damage to the environment. Sometimes claims are made for natural gas that overshoot their mark. Thus during last year’s oil catastrophe in the Gulf of Mexico, lobbyists said that when natural gas leaks into water it does not pollute it and that natural gas can therefore be safely extracted from the deep sea. Although this is the case for sub-sea pipelines through which pure natural gas flows, it is not true of all offshore extraction because natural gas often comes out of the bore hole mixed with crude oil.

However the key question with regard to the future prospects of the natural gas industry is how it will position itself vis-à-vis renewable energy sources. Although to the outside world industry always portrays gas-fired power plants as the perfect complement to intermittent renewable energy, in private

Company representatives look at renewable energy as competition in the fight for market share
conversations company representatives let out that they are quite concerned about the advent of renewable energy sources. They look at renewable energy as competition in the fight for market share. And they feel uncomfortable with the outlook that once the “transition phase” is over and they get to the other side of the “bridge”, to a carbon-free energy supply, there will no longer be any place for fossil-based natural gas and consequently for natural gas companies.

The natural gas companies could try to resist this kind of future and to prevent the development of renewable energy. Or alternatively they could themselves undergo a sustainable transformation. This does not necessarily mean that they have to become wind and solar energy providers. In fact, they do have good prospects as gas companies in a carbon-free energy market, as long as they seize the opportunity while it lasts.

Because natural gas companies have the advantage that their business model as well as their pipelines, storage facilities and power plants, which are currently set up to operate with natural gas, can also be operated using non-fossil gas. In addition to biomethane, which is obtained from organic biomasses, the concept of renewable methane developed by the Fraunhofer Society in particular offers opportunities for a sustainable transformation of the gas industry. This concept uses wind and solar energy for water electrolysis and the hydrogen produced is converted into methane using CO2. Renewable methane thus constitutes a storage option for temporary surpluses of renewably-generated electricity, and it burns in an environmentally-friendly manner, emitting only the same amount of CO2 that was used to produce it. If natural gas companies seize opportunities like these they are assured a future, even on the other side of the "bridge".


About the author

Marcel Viëtor (vietor@dgap.org) is the author of the recently published book "Energiesicherheit für Europa. Kernenergie und Erdgas als Brückentechnologien" (Energy Security for Europe. Nuclear Energy and Natural Gas as Bridging Solutions) and the EER-articles "Nuclear or gas?" and "Assumptions and accidents". He is a resident fellow for energy and climate policy at the German Council on Foreign Relations (DGAP) and an associate at the Stiftung Neue Verantwortung (snv), a Berlin-based think tank on responsible leadership.