Greenhouse gas reductions will fall short of Paris agreement targets, or natural gas companies will face a future of underused and ultimately stranded assets, unless decision-makers and investors abandon the false promise of natural gas as a “bridge” to a low-carbon future, Climate Action Tracker asserts in a report released yesterday.
The report, titled Foot Off the Gas, “challenges projections that forecast an increase in natural gas consumption,” the organization states. “Although these projections have proven too bullish in the past, governments and companies are staking significant investments in natural gas infrastructure on them, ignoring the increasing role of low-carbon alternatives, and the need to reduce emissions to combat climate change.”
“Natural gas is often perceived as a ‘clean’ source of energy that complements variable renewable technologies. However, there are persistent issues with fugitive emissions during gas extraction and transport that show that gas is not as ‘clean’ as often thought,” said Bill Hare, Berlin-based CEO and senior scientist at Climate Analytics. “Natural gas will disappear from the power sector in a Paris agreement-compatible world, where emissions need to be around zero by mid-century.”
“The idea of a continuing role for natural gas as a bridging technology is not consistent with the reality of advances in flexibility enabling technologies, such as grid expansion, supply and demand response, as well as storage,” added Yvonne Deng, Managing Consultant at Ecofys.
The release notes that “massive investments” in liquefied natural gas (LNG) pipelines and terminals continue, even though infrastructure utilization rates are down to 54% in the United States and 25% in Europe.
“This overinvestment in natural gas infrastructure is likely to lead to either emissions overshooting the Paris Agreement’s 1.5°C and 2.0°C goals—or a large number of stranded assets as the shift to cheaper renewables takes place,” said Climate Analytics policy analyst Andrzej Ancygier.
And that shift is already taking place. “One example is China, where in 2016 the [International Energy Agency] projected renewables would rise to 7.2% of the power supply by 2020—but by the end of 2016 they had already reached 8%,” said Niklas Höhne, founding partner at the New Climate Institute. “India and the Middle East are also seeing renewables rising much faster than mainstream projections.”