Gas is part of the long term solution to climate change

Interview with Torstein Indrebø, Honorary Secretary General of IGU

Gas is part of the long term solution to climate change

By Jozef Badida

Torstein Indrebø, then Secretary General of the International Gas Union, was a distinguished guest of the XXI Autumn Gas Conference organised by the Slovak Gas and Oil Association. Energy analyst Jozef Badida discussed with him the role of natural gas in a low-carbon energy mix, climate goals, Russian-Ukrainian gas dispute and challenges ahead of IGU.

Torstein Indrebø

1) IGU advocates for natural gas as an integral part of a sustainable future. However, what if a sustainable future cannot be reached with fossil fuels? Have you ever heard about the carbon bubble? It might happen that majority of fossil fuels, including natural gas, would be unburnable if we want to limit greenhouse gas emissions significantly. Can you imagine this scenario?

I have not seen any serious scenario without fossil fuels in the foreseeable future. All analyses, including the IEA World Energy Outlook, predict that the world will consume rather more than less fossil fuels. But most of us agree that the mix of fossil fuels must be cleaner. With increased use of gas the mix can be much more environmentally friendly. We have to distinguish between coal, oil and natural gas. Coal is the most carbon intensive when burnt in power plants and can gradually be replaced with gas. So, back to your question: IGU sees the share of renewable energy increasing, but renewable energy cannot replace fossil fuels with the current known technology and cost level.

2) However, the idea is connected with a potential decision of politicians to radically decrease the fossil fuel production...

Politicians are not inventors of new technology. However, they can set policies that will reduce CO©ü emissions. Modern societies need energy 24 hours 7 days a week and wind and solar cannot provide that alone. Therefore, I don’t believe in the phasing out of fossil fuels production in a foreseeable future. If you look towards 2050, I am sure we will see a lot of oil, gas as well as coal.

More renewables and nuclear energy are part of the solution as well as carbon capture and storage (CCS)

In 2012 IGU presented a publication with a gas pathway towards 2050 analysing how we could meet UN climate goals (“Global Vision for Gas”). First of all we have to focus on energy efficiency and energy savings. In parallel we should gradually phase out coal, and we can also replace some oil with natural gas in the transportation sector. More renewables and nuclear energy are part of the solution as well as carbon capture and storage (CCS).

3) During the climate summit held by the UN Secretary General Ban Ki-Moon in New York back in September a new coalition of institutions, local Governments and more than 500 individuals, among others Rockefeller´s ancestors, committed to divesting $50 billion from fossil fuels investments within the next 3-5 years and reinvest in new energy sources. How do you read this kind of messages?

It is clear, also in our analysis, that there will be more investments in wind and solar energy, and declining cost level makes renewable energy more competitive. The main investments will, however, be made in fossil fuels and will be much higher than in renewables. More than one billion people in Africa and Asia don’t have access to electricity and modern energy services today. A major part of these needs will be covered by fossil fuels, and I am confident that natural gas will play a main role. Major gas discoveries have been made in sub-Saharan Africa recent years.

4) Fossil fuels are currently relatively cheap but what if carbon pricing is set up worldwide. It will cause their price hike. Do you still believe in so many investments being poured into fossil fuels?

It is not realistic that we will see a global carbon price at a level that will phase out fossil fuels. Even in Europe the carbon price is so low that coal consumption is increasing in the power sector. Hopefully, we will see a higher carbon price or other regulatory initiatives making it more economically attractive to use gas in the power sector. We could reduce CO©ü emissions with 50% per kWh produced by doing that. Changing the global energy system will impact jobs, economics and competition between nations. That is why it is so difficult to reach a world-wide UN agreement on emission reductions.

5) Alright, but is this approach sufficient to be on the safe side limiting global warming under 2°C?

The 2°C limit is very ambitious, but it can be reached because technologies are already here

Your question is important. IGU analysis shows that it is possible, but whether it is practically implementable is another thing. Even Europe, with a declared climate policy and reasonable strong economy compared to other countries, is increasing the consumption of coal. What can we expect from other poorer nations? The 2°C limit is very ambitious, but it can be reached because technologies are already here. We have to start with the low-hanging fruits and that is the replacement of coal and energy savings.

6) Let´s touch a hot topic of this season - the Russian-Ukrainian gas dispute. Do you agree that it threatens the European gas industry as many final consumers consider switching to another energy source?

This is a gas dispute between Ukraine and Russia over gas price. Gazprom has not threatened to cut gas supplies to other European customers and continues to supply its European clients according to the contracts. They have a dispute with Ukraine and stopped supplies to them due to lack of payments for the gas.

7) However, what about the image of natural gas?

the situation is hurting the image of gas because it has been involved in a political dispute

We have to admit that the situation is hurting the image of gas because it has been involved in a political dispute. That is not good for gas and the gas industry in Europe. Particularly, here in Central Europe, where you have few supply alternatives. It is important to improve the image of natural gas in general, as we are a long term and capital intensive industry in need of a stable and predictable business environment to attract investments.

8) After seven years in the position of the IGU´s Secretary General you will soon hand on the baton to your successor. What have been the main achievements of this long period and what could be done better?

An important change, during my term in IGU, has been the increased focus on the role of gas in a low carbon energy future and our engagement in global energy politics. This became necessary as a result of the financial crisis and reduced demand for gas in Europe as well as the challenge related to climate change. As a response to this development IGU has become (i) more open to the parties outside the gas industry (ii) more active in the global policy making area, and (iii) engaging in dialogue with climate organisations like Greenpeace and others.

We also have expanded our cooperation with the United Nations and World Bank in the efforts to reduce global energy poverty, and enhancing the use of gas to support local economic development.

We have done a lot, but need to do much more in the field of communication and media. The coal and nuclear industry have a long tradition of lobbying for political support while gas was the fuel of choice until recently. Now, we must be more proactive and support our interests through fact based information and external dialogue.

Gas is part of the long term solution to climate change, improved air quality, sustainable economic development and job creation. We have a strong case, but must be better to communicate these messages. Gas advocacy has therefore become a top priority of IGU and its members.

This article also appeared in the gas journal Slovgas in Slovak.

Torstein Indrebø, Honorary Secretary General of the International Gas Union Mr Indrebø holds a Master of Science in Business from the Norwegian School of Economics and Business Administration, Bergen, and has a degree in Petroleum Taxation from the University of Bergen. He joined the Oil and Gas Division of Norsk Hydro in 1980 working on commercial issues on oil and gas ventures in the North Sea. In 1985-1986 he was assigned to Mobil Oil in USA. In 1995 Indrebø was appointed Vice President and Head of the Oil and Gas office of Norsk Hydro in Brussels, Belgium in 1995. In 2001 Mr Indrebø returned to Norway and assumed the position as Vice President Strategy and Business Development, Natural Gas. He served as President of the Norwegian Gas Association from 2001-2005. In October 2007 Mr Indrebø was appointed Secretary General of the International Gas Union and has transferred the IGU Headquarters and Secretariat to Oslo, Norway under the sponsorship of Statoil. After 7 years he left the chair to Pål Rasmussen in December 2014.