Peter Coleman, CEO and Managing Director of Woodside, said it is vitally important for the gas and LNG industry to emphasise its low carbon credentials during the coming years
Reducing emissions is vital for the future of both the energy industry and the environment according to Peter Coleman, CEO and Managing Director of Australian oil and gas company Woodside. He urged the natural gas and LNG sector to show that it is a major part of a low carbon future as the energy landscape transforms. “You have to look at the changes that have occurred in the last 10 years and then compound that to the next 20 to 30 years,” said Coleman.
“Reducing the carbon footprint - from the well to the customer - has to be a focus for Australia.” He said the country is ahead of the rest of the world in some ways with its carbon storage projects, but he added that more needs to be done, pointing to the generation of electricity through solar power as a positive way forward as the sun shines most days in Australia.
Looking at business models Coleman said breaking them up into segments, starting with the ownership of the plant and working up through the chain of supply, was a way to ensure maximum efficiency with regard to generating cleaner energy.
The size of the project and analysing the state of the market are also important factors, he said, before adding that companies “sitting out of the game on the sidelines” will find that they have been left behind by an evolving energy landscape. However Coleman said pricing and the point of view of the consumer needs to be taken into account.
“The customer may not be prepared to pay for the increased cost of LNG,” he said. “It’s the same principle as when someone gets on a plane and is asked to pay extra for a ‘green ticket’.
The customer just wants the lowest price. “In my view it will need regulators to step in to ensure the appropriate mechanisms are in place (to ensure clean fuel). You may also find that countries will put increased taxes in place on products which are not carbon friendly.”
Coleman pointed out that Woodside has signed up to all the regulations in place with regard to cutting emissions and producing cleaner energy and added that electrification of the whole chain was a key factor for the future.
Coleman used the Gastech conference, held in Houston, Texas, to call on the gas and LNG industry to demonstrate how it can be a major force in the energy mix over the coming years, and stated that in order for the sector to be credible it should open up to having its output monitored and assessed by independent bodies.
He said: “We may feel superior that our product, as the cleanest burning fossil fuel, can displace coal, delivering a net reduction in global emissions. “Indeed the International Energy Agency calculates that coal-to-gas switching has saved around 500-million tonnes of carbon dioxide since 2010. But this won’t appease those who oppose all fossil fuels. It’s on us, as an industry, to demonstrate that we are cleaning up our act, reducing methane emissions and reducing flaring to an absolute minimum.”
Coleman said that just one “cataclysmic” weather-related event taking place anywhere in the developed world that could be clearly attributed to climate change, could see governments act in a way that the energy industry might not be prepared for. He said there were two main reasons why reducing emissions should be a main part of any strategy, both by individual companies and the gas and LNG industry as a whole, the first of which was that the world needed a sustainable energy path.
He said: “For the sake of future generations, for the sake of the planet, we need to find a way to deliver extra energy with fewer emissions. If we wait to see if the scientists are right or not, it will be too late.” Coleman added that it also made business sense to reduce emissions, as consumers were increasingly demanding much cleaner energy. “If we don’t heed those demands, we will be left behind,” he said.