Tag Archives: carbon emissions

Mexico’s Demand for Natural Gas Spurs Pipelines, Disputes

July 15 (Source: Bloomberg) — More than 700 miles of new pipelines in Texas are being built to ship more of the state’s natural gas to Mexico, raising concerns from U.S. environmentalists who want to see low-carbon renewable energy grow instead.

Exports of gas to Mexico are expected to grow dramatically by the end of the decade. While the U.S. has a long history of pipeline exports to Mexico, the explosion of new pipeline construction is raising environmental concerns about wild landscapes, an expected expansion of hydraulic fracturing, and greater use of natural gas instead of other sources of energy such as solar and wind.

But Texas, with bountiful supplies as a result of the shale boom, sees opportunity for exports south of the border.

“Having an opportunity like the Mexican market does help Texas producers and the industry, especially in a time when prices are lower here and demand is lower,” said Brian Kalinec, an independent geophysicist in Houston. “You are basically filling in demand if an opportunity exists and I think that any Texas producer close to the border would consider these possibilities.”

Continue reading…


Time to seize a prosperous future fuelled by natural gas

Compared with coal, natural gas produces half the carbon dioxide, less than a third of the nitrogen oxide and just one per cent of the sulphur dioxide, with virtually no particulates. That China is looking to import LNG from B.C.’s shale gas is good news for both Canada and for the Earth’s atmosphere. But LNG will only slow China’s massive coal-fired power growth. Here’s the really good news. According to the U.S. Energy Information Administration (EIA), China possesses the world’s largest technically recoverable shale gas reserves that, at 1,115 trillion cubic feet, are almost twice as large as Canada’s. These vast resources remain undeveloped due to the early stage of Chinese recovery technology. That’s why the University of Calgary’s announcement of a new Canadian/Chinese Research Centre aimed at unlocking that potential is so newsworthy. At the signing ceremony in Beijing on October 23, U of C President Elizabeth Cannon stated that the project “will help China move from a coal economy over to gas.”

Read the Full Story >

Natural gas climbs on Obama US energy plan and cold weather


President Obama spoke Wednesday at Georgetown University in Washington about America’s energy security. (Photo: Doug Mills, New York Times)

Natural gas prices climbed Wednesday as President Barack Obama said he wanted the United States to use more of it instead of foreign oil. Obama has declared he wants to cut US oil imports by a third by 2025 and announced a number of initiatives that would see the US use more natural gas, and biofuels to power vehicles and produce electricity.


But the prices increase was not on Obama’s statements alone… colder-than-normal temperatures are expected to cover parts of the Midwest and East Coast through this weekend, lifting gas-heating needs and drawing down natural gas inventories in advance of the spring shoulder season.

Here on HRN we have long stated that North America needs to better leverage their natural gas resources in an effort to reduce carbon emissions. In the US, there is the added benefit of reducing dependance on foreign oil suppliers in the middle east who do not share the same interests as the US.

The US has become the largest producer of natural gas in the world, with abundent reserves found in shale gas deposits. Unfortunately, rather then keep up higher production rates and increase usage in power generation and transportation, plans are underway to start to export natural gas to China and other countries… and export the lower carbon benefit along with it.

Canada can also use more natural gas in power generation and transportation. Last reports published still had Canada sitting at just over 12,500 compressed natural gas vehicles across the country. That is a dismal number. The US is not much better but at least the number is going up. A number of US companies with large fleet vehicles have already made the conversion recognizing the many advantages to compressed natural gas vehicles. For example, Verizon’s purchse of over 500 CNG vans last June (See HRN: “Verizon buys natural gas vans“).

Point. Lets take full advantage of the energy resources we have in North America rather then exporting it and burning higher carbon resources. It is obvious that we can not entirely replace one energy source with another. It will take all available resources to meet our growing energy demands. However, the energy mix can make better use of lower carbon energy sources like natural gas, and zero carbon energy sources like wind, solar and hydro. (Keep in mind that the mineral resources, and manufacturing of wind, solar etc takes energy which is generally provided by oil, and coal).

So while Obama has suggested that increased usage of US natural gas is important, and noted that Canada’s oil sands are the best secure supply of oil, dont forget Canada’s vast resources of natural gas from shale reserves in the Horn River Basin and elsewhere in Canada. Though Canada can use more domestic natural gas for its own power generation and transportation, it will still produce a surplus. And if the US is not their to buy the Asian market will be.

Wall Street Journal: US GAS: Futures Rise on Cold-Weather Boost


Who killed the natural gas car?


From 1996 to 1999, General Motors invested and developed the EV1, the first mass-produced and purpose-designed electric vehicle by a major automaker.

The EV1 was inspired in part by the eventual California Air Resources Board (“CARB”) 1990 rule that each of the U.S.’s seven largest carmakers would be required to make 2% of its fleet emission-free by 1998, 5% by 2001, and 10% by 2003, in order to continue to sell cars in California. However, long story short, GM determined that the EV1 was not economically feasible.  Subsequently, GM and an alliance of automakers litigated the CARB zero emission regulation which resulting in a rewrite of the regulation that permitted the automakers to avoid zero-emission objectives and produce other low emission vehicles like natural gas vehicles (“NGV”), and hybrid cars. The EV1 program was scrapped along with most of the EV1 cars which were repossessed. The majority were crushed and a few were distributed to museums under the agreement they would never be driven.

The EV1 story inspired the 2006 documentary film “Who Killed the Electric Car?” which explores the development, limited commercialization, and scrapping of the Ev1 program. The film explores the various reasons why the program was scrapped, and looks at various parties that might have “killed” the program.

The bottom line – and hindsight – is that GM and other U.S. automakers failed to recognize the opportunity in front of them. They scrapped the EV1, missed the hybrid opportunity (which Toyota and others captured) and never really pushed a NGV. Instead GM started producing the Hummer for American consumers. And even now with the abundance of natural gas in North America, and increasing pressures to reduce carbon emissions, U.S. automakers are reluctant to support NGVs.

While many in and out of the natural gas industry are looking to natural gas as a viable “bridge fuel” that can provide lower carbon energy for electric power generation and transportation, the automakers are not biting. And despite natural gas vehicles being produced and marketed worldwide by all major manufacturers, U.S. manufacturers doubt a natural gas car is feasible in North America. Their primary reason is convenience. There are simply not enough natural gas filling stations to make NGV attractive to the average consumer. That may have been true once upon a time. Today compress natural gas (“CNG”) are more abundant and growing on at a steady pace with aggressive expansion by companies like Clean Energy which have a strong presence in densely populated states like California.

So why is it that U.S. automakers can produce and market a natural gas vehicle in internationally but not in the U.S. or Canada? North American auto makers do provide NGV for commercial fleet customers. Its an easier decision for many of these customers as they have central filling stations on their own sites. U.S. automakers continue to see NGVs a niche market in North America. In fact in last at the 2010 CERA Week Conference natural gas and its opportunity as a bridge fuel to reduce emissions and reduce dependence on foreign oil, automakers were noticeably quiet.

John Viera, Director of Sustainability & Environmental Policy at Ford Motor Company told the CERA Week conference; “We see natural gas vehicles remaining a niche market.” And that may be true unless consumers are prepared to be more active in their filling practices. Something that will be very difficult to change.

Jeffrey Jacobs, vice president of Chevron Technology Ventures, said natural gas-powered cars made sense in some regions. Mr. Jacobs is quoted: “Natural gas is not a good fit. We don’t see a significant penetration beyond that we have now.”

Auto-makers in North America focusing on squeezing more efficiency out of internal combustion engines, for example by reducing vehicle weigh, or moving toward zero- or near-zero emission electric or hydrogen cars.

So who killed the natural gas car? Well, its not dead. Its just being quietly used by commercial fleet owners that see the many advantages that natural gas offers in fuel efficiency, lower fuel costs and lower carbon emissions. And this market has the opportunity to expand usage with more commercial fleets, government (municipal, provincial, state) fleets, 18-wheelers, etc using more natural gas. If this happens, would fuel providers make natural gas more available in order to compete and service these customers? You bet. In time – and with more filling stations – perhaps the average consumer would recognize the improved convenience of natural gas. (Its also worth noting some of the advancements – mostly outside North America – being made with home filling stations. In Canada, natural gas runs to nearly every house and building in the country).

Cheverolet Astra

And the natural gas car is certainly not dead outside of North America. Those countries  that have implemented policies that have encourage alternative fuels have established robust distribution systems. A good example is Brazil, who recognized the energy value of their abundant sugar cane resources. Still in the works, Brazil now has a robust distribution network for alternative fuels – including natural gas. North America needs to recognize the value of abundant natural gas being unlocked from shale deposits and encourage this energy source to be used more. Brazil has ~1.6 million natural gas cars on the road compared to only 150,000 in the U.S. It is also worth noting that  GM do Brasil introduced the MultiPower engine in August 2004 which was capable of using CNG, alcohol and gasoline as fuel, and it was used in the Chevrolet Astra 2.0 model 2005, aimed at the taxi market.

Its not about convenience. Its about savings. Unfortunately, consumers usually don’t change their status quo until it becomes too expensive. When oil shot to $145 / barrel in 2008, SUV and other gas guzzling vehicle sales fell. There was a new surge in hybrid sales, and manufacturers started marketing fuel efficiencies. So it can happen. With increasing oil prices, and continued pressure to reduce carbon emissions, it is possible for a natural gas vehicle market to emerge in North America.

Pickens expects approval of key natural gas plan

T. Boone Pickens is confident that the The Natural Gas Act will be passed in the U.S. If so, it would dramatically expand the use of natural gas as a transportation fuel among heavy- duty fleets. House and Senate versions of the bill provide tax breaks for natural gas-powered vehicles and fueling stations.

Full story at Houston Chronicle: Pickens expects approval of key natural gas plan

This is a step in the right direction for the U.S. to use domestic energy resources and reduce carbon emissions from the heavy-duty transportation fleets. Canada should take note and implement similar tax incentives to better use vast natural gas resources in Canada. Even with expanded domestic use of natural gas, Canada would continue to post a surplus for export to the U.S. and Asia.

We encourage you to support the Bluebridge Plan.

Encana CEO sees low natural gas prices for next two years

Randy Eresman, CEO, EnCana Corp. (archive photo)

Following their shareholder meeting approving the split of Encana into two companies – EnCana Corp. (natural gas) and Cenovus Energy (oil saneds) – company CEO Randy Eresman gave his prediction that natural gas prices are likely to remain under $5.50 and likely under $6.50 for the foreseeable future as technology improves production costs.

This may be bad news for shareholders of natural gas companies, but Eresman stated that those companies like EnCana positioned in lower cost shale gas properties like the Horn River basin will do fine while higher cost conventional plays may be more challenging. Eresman is quoted as stating:

“The best producers at the lowest cost will be the ones that survive in this new environment. And with our exposure to these lower-cost plays, we are very well-positioned.”

Eresman went on to state:

“We can do well and survive and have a very strong positive cash flow. [But] I expect there will be some difficulty in bottom-line earnings for all corporations that are exposed to natural gas.”

The Horn River basin remains one of the only active basins in Canada, and one of three in North America. And while some may be concerned about their natural gas stocks, the abundance of shale gas and low prices simply reinforces the opportunity to leverage this abundant domestic resource as a low-carbon alternative to oil and coal.

Globe and Mail: EnCana sees tough terrain ahead



Horn River basin still the best kept secret in natural gas

Back in June, Keith Kohl of Energy and Capital called the Horn River basin “The best-kept secret in natural gas discoveries”. In his latest article “How Canada is Suffering from Peak Natural Gas” he goes into detail about how Canada’s powerhouse energy province Alberta has been recording declining production in conventional gas since 2001 and that no amount of conventional drilling in Alberta is going to reverse this trend.

But despite the concerning decline of Alberta’s natural gas production, Mr. Kohl once again reminds his readers of the “best kept secret in natural gas”… British Columbia’s Horn River basin. In his October 13th article he states;

There’s but one province that has managed to increase natural gas production year after year: British Columbia. Back in 2000, BC made up just 12% of Canada’s overall production. Since then, that share has grown to over 18%.

The Horn River Basin isn’t news to us. In fact, I still believe this unconventional shale play is one of the best-kept secrets in natural gas discoveries. It’s a trend too costly to ignore.

Please don’t get me wrong: Alberta is will continue to be a powerhouse for Canadian energy. But I’ve found, more often than not, it’s worth it to stay ahead of the curve. Once BC gets a sufficient infrastructure in place (a few pipeline stocks come to mind), they’re going to give Alberta a run for their money.

Some forecasts predict that British Columbia will surpass Alberta in total natural gas production by 2020 – perhaps sooner. Analyst Michael Mazar of  BMO Capital Markets has stated; The Horn River Basin “has the potential to render those plays obsolete.” (See HRN: Will the Horn River Basin make Alberta the next “have-not” province?”)

Infrastructure is moving forward at a fast pace in BC and production estimates continue to grow. Fort Nelson is fast becoming the “next Fort McMurray” in Canada. Overall, Canada has a great opportunity to leverage increased domestic natural gas resources to lower carbon emissions by increasing the amount of natural gas used in the country’s overall energy mix.

Energy and Capital: “How Canada is Suffering from Peak Natural Gas” by Keith Kohl

Natural gas is here. It’s now. It’s cleaner. It’s more affordable. What are we waiting for?

BP CEO Tony Hayward

BP CEO Tony Hayward

BP CEO Tony Hayward is very optimistic about the global potential for natural gas.

“Natural gas can transform the global energy outlook. It’s here. It’s now. It’s cleaner. It’s more affordable. What are we waiting for?” – Tony Hayward, CEO, BP Global

The Role of Gas in the Future of Energy (Source: Oil Voice)
Speaker: Tony Hayward, CEO, BP Global
Speech date: 08 October 2009

Ladies and Gentlemen, it’s a great pleasure to be in Buenos Aires and to be invited to address this prestigious World Gas Conference. I’d particularly like to thank our Argentine hosts and the organizers, the International Gas Union.

As some of you may be aware, BP has a special connection with Argentina thanks to our very successful joint venture in Pan American Energy. And Argentina has a strong connection with gas – gas provides half of the nation’s energy.

Today I’d like to share with you my thoughts on the world’s energy challenge, and the significant role gas could play in helping to address it.

Low cost, readily available energy enabled the global economic development and prosperity of the 20th century. Now, at the beginning of the 21st century – as living standards rise and urban populations expand – satisfying ever-growing energy demand in a sustainable way has become probably the world’s biggest challenge – it’s one that is political, practical and economic.
According to BP’s projections, we’ll need about 45% more energy in 2030 than we do today. And we mustn’t underestimate the scale of what it will take to deliver that.

To meet it, we’ll need an investment of some $25 – 30 trillion, that’s more than $1 trillion a year between now and 2030.

In oil alone, declining production from existing fields, coupled with new demand, means we’ll have to bring on nearly 50 million barrels/day of new production over that time – that’s almost twice the current level of production in the entire Middle East.

There’s no doubt that Alternative Energy will play an increasingly important role in addressing the issues we face. A more diverse supply – one made up of fossil fuels, as well as nuclear, wind, solar and biofuels – is certainly a good idea, both for energy security as well as helping to address the challenge of climate change.

But we need to be realistic – the transition to a lower-carbon economy won’t happen overnight.

Why is that?

Well, the sheer scale of the energy industry makes this impossible.

To give you an example, it takes 30 years to turn over the capital stock in the power sector and 15 years in automobiles.

Such long lead times mean that, like it or not, fossil fuels will continue to play a very significant part in our future energy mix. We estimate that by 2030 they will still be satisfying around 80% of our energy needs.
In the realm of alternatives, promising too much too soon is dangerous. It risks rendering the entire global effort both politically and economically unsustainable.

And the world can’t afford that.

So we’re talking about an evolution – not a revolution in the energy mix.

Our energy future isn’t predetermined. We can and we need to shape it. What we badly need is a roadmap for this transition.

One built around a clear and realistic understanding of the existing infrastructure, changing technology, economic incentives and the inevitable policy trade-offs we’ll face along the way.

In fact we’ll need a series of roadmaps as the transition won’t be a ‘one size fits all’. It will vary by country and by sector depending on each nations needs and resources.

I’d like to focus my remarks today on the area of electricity generation as this will be one of the principal drivers of growth in the global demand for energy to 2030.

While the industrial and electrical sectors use some petroleum products, the three big energy sources are coal, nuclear and of course, natural gas.

Going forward, the share of renewables will certainly increase. Wind power for example can be cost-competitive in certain locations. In the US it’s been the fastest growing of all energy sources over the last couple of years. Nuclear too is expected to gain ground.

But the technology, infrastructure and regulatory framework for those alternative energies are expected to take decades to be deployed at scale.

In the meantime, the choice for utilities boils down to two hydrocarbons: coal and gas.

Coal of course produces more carbon than any other fossil fuel. To give you an example: it accounts for around 50% of America’s power generation, but it also accounts for 80% of the resulting carbon emissions.
And although Carbon Capture and Storage is often trumpeted as the path to cleaner coal, it still faces a number of challenges which will take time and effort to resolve.

I don’t believe we’ll see the commercial use of CCS at scale for at least another decade or more – and it won’t come without a price. If and when it is established, there will be substantial costs associated with its use.

I don’t think we can afford to wait.

We need to begin to take carbon out of the energy mix today.

And we need to be realistic about how we’re going to achieve that.

Until renewables gain a sizeable share of the power sector and cleaner coal is available through Carbon Capture and Storage, I can see only one way of doing it – by increasing the use of natural gas.

Gas is the fuel that offers the greatest potential to provide the largest reductions at the lowest cost – and all that by using technology that’s available today.

If we get it right, gas can transform the global energy outlook in the decades to come.

It has a long list of advantages.
– It’s easily the cleanest burning fossil fuel. Compared to coal, it only generates 50% as much carbon per kilowatt hour and a fraction of coals’ nitrogen and sulphur dioxide emissions.
– It’s very efficient. Combined-cycle turbines, fuelled by natural gas, are quick and relatively cheap to build. They can generate electricity at up to 60% efficiency in terms of power generated as a proportion of energy input.
– As well as burning fuel more cleanly, natural gas generators can be switched on and off more easily than coal-fired plants. They can also be expanded with fewer political objections than those invariably encountered by coal.
– Gas can complement renewable energy. Given the intermittency with which wind and solar power operate, gas-fired plants are ideal for providing the necessary swing capacity.
– It’s the most versatile. Natural gas is unique in that it can be used for transportation, as well as for generating electricity.
– And it’s abundantly available – more abundant than oil.

According to BP’s Statistical Review of World Energy in 2008, proven global gas reserves reached more than 6,500 tcf, or 1.2 trillion boe, with enough reserves in place to provide the equivalent of 60 year’s consumption at current rates. And reserve estimates are rising sharply as technology unlocks unconventional resources.
I’m pleased to say the world seems to be waking up to the advantages of natural gas. Last year consumption increased in both the OECD and non-OECD countries. It was the only hydrocarbon to do this – and this in spite of the recession which dampened demand for all fuels.

Much of this success is explained by new technology opening up access to new supply, and recent developments in the US provide a perfect example with which to illustrate this story.

North America is experiencing nothing short of a renaissance in gas development. Just four or five years ago, the industry was having to look at importing gas simply to satisfy the country’s existing needs.

Today the situation is very different – A quiet revolution has occurred in the gas fields of North America.

New techniques such as hydraulic fracturing and horizontal drilling are accessing deposits of unconventional tight and shale gas, and coal bed methane.

One field where these techniques were pioneered – the Barnett Shale near Ft. Worth in Texas – has almost singlehandedly turned around the production of natural gas in the US.
The technology has also led to other major new discoveries, not only in traditional oil and gas states such as Texas and Louisiana, but also in areas like Pennsylvania, Ohio and upstate New York.

As a result of this, the picture of natural gas in the US has been transformed in a very short period of time.

US dry gas production increased last year by 3.9 bcfd, despite production taking a major knock from Hurricanes Gustav and Ike. Without those disruptions, production growth would have been closer to 5 bcfd which amounts to just under 10% year on year.

Estimates vary, but the US may now be sitting on between 50 and 100 years worth of recoverable natural gas.

All this is highly significant for the rest of the world as those new technologies have only just begun to be applied to unconventional gas resources elsewhere.

We believe there’s the potential to find and develop tight gas and shale gas in North Africa and the Middle East, Europe, China and in the southern cone of Latin America.

There’s also potentially high quality coal-bed methane in Australia and South-east Asia.

All in all we estimate that as yet undeveloped or unidentified unconventional gas could contribute a further 4,000 tcf to gas resources over the next few years.

That would add another 60% on top of our 2008 figure for world proven gas reserves – a total of roughly 100 years of consumption at current rates.

In the meantime, the availability of gas around the world is expanding through trade in LNG.

The number of countries that import LNG has risen from 9 in 1999 to 22 today and the movement of trade is gradually changing too – from traditional A-to-B cargoes, to multi-basin, multi-point deliveries with increased trade between the Atlantic Basin and Asia-Pacific.

Put simply, gas is becoming a global commodity – more flexible, more tradable and more secure.

So looking at all these advantages, why don’t a lot of the forecasts point to a more rapid growth in demand?

And what will it take for the world to encourage and accelerate its growth?

I believe that on the one hand it requires decisive and appropriate policy action on carbon pricing, and on the other, a more customer focused offer to the utilities.

It’s clear we need to begin to address the issue of climate change. Until both producers and consumers know and pay for the cost of carbon, the uncertainty around planning and investing in the transition to a low carbon economy will remain high.

The power sector is a good example of where a uniformly applied carbon price could positively impact choices and behaviours.

It could influence the choice between coal and gas in the most cost effective way and it would allow informed investment into sustainable and more economically attractive gas plants.
At BP, we favour a Cap and Trade system because it gives environmental certainty based on an absolute emissions cap.

Such a system needs to treat all carbon as equal and push for the best possible outcome in terms of both carbon and economic impact across all industrial sectors.

I believe the ultimate objective should be a global Cap and Trade system, but that’s probably some way off. The best place to start is at the national level.

Turning now to the users.

In the US, it’s fair to say that utilities have historically favoured coal over gas. There are a number of reasons for this, but principally it’s been about price – gas has been more expensive than coal, and gas prices have also been more volatile.

The current low price of gas has increased its share of power generation. But to capitalize on this advantage and compete properly with coal, we need to address volatility.

We must review how we contract and price gas sales.

Utilities need to be able to hedge against price uncertainty using flexible market mechanisms. Regulators need to ensure a level playing field enabling producers and consumers to work together to manage short-term fluctuations.

The bottom line is that the new abundance of gas reserves should now give the power industry and its regulators the confidence to discuss long term supply arrangements – and rising demand should give producers the confidence that such arrangements can be profitable.

With that, let me conclude.

Natural gas has often been described as a ‘bridge fuel’ to a lower carbon future.

It’s definitely that – But I believe it can be much more.

Using the technology we have available today, greater use of natural gas can provide us with the quickest, most realistic path to achieving the largest emissions reductions at the lowest cost.

It can be a ‘destination fuel’ – a fundamental fuel in a lower carbon world.

Natural gas is here. It’s now. It’s cleaner. It’s more affordable.

So, ladies and gentlemen, what are we waiting for?

Tony Hayward
BP Chief Executive

Britain to become increasingly dependent on natural gas

Mr. Alistair Buchanan, Ofgem Director General

Mr. Alistair Buchanan, Ofgem Director General (Telegraph Photo: HEATHCLIFF O'MALLEY)

Ofgem, the energy regulator for England, Scotland and Wales has estimated in a report that Great Britain needs to invest up to GBP200 billion on energy-related over the next 10 to 15 years to ensure the country can meet its targets to cut carbon emissions and shore up its energy security.

The report titled “Project Discovery – Energy Market Scenarios” uses scenario analysis to put the GB’s energy into the wider global and environmental context. Four different scenarios were invetigated and in all scenarios Britain becomes increasingly dependent on natural gas imports over the next 10 to 15 years.

It is apparent that countries worldwide are increasingly turning towards natural gas as a key energy source for meeting energy needs while reducing carbon emissions. As a cleaner alternative, natural gas emits 50% less carbon then coal and 30% less then oil products like gasoline and diesel. In North America we have realized a dramatic increase in natural gas reserves due to new technology that allows for the economic extraction of natural gas from shale gas and this same opportunity is likely to play out around the globe.

In all four scenarios  the report suggests LNG plays an important role in meeting demand and global demand for LNG could double or even triple by 2020. Energy security is key and in the GB natural gas is dependent on the EU market and specifically Russia. The report references the important role Russia plays in  EU, and GB natural gas imports;

GB security of gas supply is directly impacted by the supply and demand balance of gas in the EU. A shortage of gas and hence high prices in the EU could result in diversion of supplies away from the GB market e.g. LNG, Norwegian gas and potentially even gas held in GB storage through the interconnectors (as occurred during last winter’s Russia-Ukraine gas dispute).

It also states;

It is clear that under all scenarios there is a need for both Russian gas imports to increase and, under some scenarios, a significant increase in LNG imports in order to meet EU demand. In all our scenarios the market is operating with significant uncertainty about the level of Russian gas. Higher levels of Russian gas imports would reduce the LNG requirement that we have assumed, and vice versa.

So, LNG imports into GB depend on the actions of Russia. So while Kitimat makes plans for exporting LNG from the Horn River basin to Asia, perhaps  the new LNG terminal in Saint John will one day export to the GB.

Ofgem Report: Project Discovery – Energy Market Scenarios (pdf)

Natural gas key to cutting CO2

According to a major study by the International Gas Union (“IGU”) the world needs to increase natural gas production by 70%  in order to reduce carbon dioxide emissions quickly enough to avoid the worst effects of climate change.

The study’s main conclusion was that economic and environmental factors should push global gas demand to more than 4 trillion cu m/year (about 141.2 tcf) by 2030, from about 3 trillion cu m currently.

The study then compared two 2030 scenarios.

  • Scenario 1 – Continuation of current policy trends. Conclusion – Primary energy demand would reach 16.5 billion tonnes/year of oil equivalent in 2030. Of this, natural gas would represent 23%, or 4.3 trillion cu m. Carbon dioxide emissions from all fuels under this scenario would reach 41.6 billion tpy.
  • Scenario 2 – Green-Policy. Conclusion – Primary energy demand would reach 15 billion toe/year in 2030. Of this, natural gas would represent 28%, or 4.8 trillion cu m. Carbon dioxide emissions from all fuels under the “green policy” would reach only 27.7 billion toe/year, compared with 30 billion toe/year currently.

HRN supports the increased usage of natural gas in the overall energy mix and will be launching a new project to support this position.

Reuters: Natural gas to play key role in cutting CO2  – study