The continuing series of Global Business Leader sessions, part of the ADIPEC conference series, saw the world’s most important oil and gas leaders come together to discuss the burning issues.
The first session on Tuesday, entitled “The Golden Age for Gas and LNG?” involved Vicki A. Hollub, President And CEO, Occidental Petroleum Corporation; Alexander Medvedev, Deputy Chairman, Management Committee, Gazprom; Mario Mehren, Chairman Of The Board Of Executive Directors, Wintershall and Hendi Prio Santoso, President Director,Pt Perusahaan Gas Negara (PERSERO) Tbk.
Global leaders of the gas industry voiced concerns on Tuesday about policies they say are hampering gas market growth in regions like Europe, where a greater emphasis is placed on climate change, even as cheap coal dominates the market.
Policy on gas is hurting its take-up, even as there is little impact on carbon emissions reduction, Mario Mehren, chairman of Wintershall said at yesterday’s morning Global Business Leaders panel session.
“Gas growth optimism has faded away; demand isn’t what was expected with slower growth in China. And we in the industry are suffering from cheap coal. In Europe, that has prevented gas from playing an important role,” he said.
Europe should consider policies to phase down coal in power production, according to Institute for Sustainable Development and International Relations, which said Europe may miss its target of cutting emissions by at least 40 percent by the end of the next decade. By 2030, unabated coal supply needs to drop by more than 50 per cent to make way for low carbon electricity sources, it said.
Gazprom’s Alexander Medvedev said energy demand will continue to grow. In 2030, consumption of primary energy will go up 21 per cent and in 2040 it will go up 32 percent, while conservative estimates say gas consumption will grow by 30 per cent in 2030 and by 50 per cent in 2040, he said.
The Russian gas company is a majority stakeholder in Nord Stream – a gas pipeline with a fundamentally new route for Russian gas exports to Europe.
To support the growth of gas, Medvedev said the best energy combination to reach climate change targets is to have a mix of renewable energy and natural gas, not to play the two against one another. “Unnecessary politisation of natural gas attempts to frighten dependence on Russian natural gas - this is unethical,” he said.
Even with ‑ at economic growth, gas demand is expected to jump significantly in a few years,” he said. “All the necessary investments should already be done,” Medvedev said.
Vicki Hollub, president and chief executive of Occidental Petroleum Corporation said “United States gas exports could jump up from current levels to cater to global demand.”
“We don’t expect it to be a big LNG player, to be able to compete with Qatar, but there is a healthy supply of gas that can continue to be built,” she said.
Meanwhile, Indonesia, which was a major gas exporter in the 1970s, has become a net importer of energy as oil production declined. A significant demand for gas is expected from Indonesia, with a growing domestic population. The country has a massive gas reserve, which is an important solution to its energy needs.