Steve Hill, Executive Vice President, Shell Energy, focuses on the role of gas in the transition of the energy mix amid growing concerns over air quality and climate change
What are the major opportunities for long-term market growth across the industry?
The biggest opportunity for the growth of gas is the integral role it plays in the transition to a lower carbon energy system – reducing emissions and improving air quality, being a reliable partner to renewables to maximise their contribution to the power system and by providing the cleanest choice for energy demand in sectors that are difficult to electrify, such as heavy-duty transport like shipping.
And what are the most pressing challenges?
The crucial challenge for gas is to address methane emissions which can diminish the relative greenhouse gas emissions, benefits of natural gas. The long-term role of gas in the energy mix depends on accurate measurement, transparent reporting and ongoing reduction of methane emissions throughout the entire gas supply system.
The other challenge is recognising and promoting the use of gas in cutting emissions and tackling air pollution. That requires government-led policies and regulations that are consistent with these outcomes. A great example is China where policy driven coal to gas switching resulted in cleaner skies for Beijing and surrounding areas.
At the same time, gas needs to continue to improve its competitiveness and flexibility to meet evolving customer needs.
How important is Gastech as an event in bringing aspects of the industry together?
Gastech has over the years become a key industry event, bringing stakeholders together from all parts of the value chain and all regions across the globe. It has become a platform to collectively discuss challenges the industry is facing and, more importantly, stimulate meaningful conversations on the solutions we need to develop and implement.
How can suppliers and customers work closely together to provide a mutually prosperous marketplace?
Suppliers and customers need to recognise that they have diverging needs and both need to embrace the solutions that can bridge between these. Suppliers are still needing long-term contracts with credible and creditworthy offtakers to secure the financing required to launch new projects. Customers need increased flexibility as they need to manage the uncertainty created by changing regulations, changing fuel mixes, and increased competition in their markets. The LNG portfolio model is one solution that meets both these needs.
Does more need to be achieved in the field of transparency across supply and demand?
As we move to increased commoditisation of our industry, increased transparency is an inevitable and beneficial outcome.
How positive are you for the future of gas and LNG in an evolving worldwide energy mix?
Gas and LNG have an enormous role to play in enabling the world to meet growing energy demand and at the same time address growing concerns of climate change and air quality.
I am very optimistic about the future of gas —the cleanest-burning hydrocarbon— in the long-term, both as a partner to renewables as the world electrifies, and as a cleaner energy source to decarbonise hard to electrify sectors.
What do you hope to take away from this year’s Gastech event?
I am always keen to learn about changing customer needs and new trends in the gas and LNG market, and to catch up with my many friends within the industry. I look forward to Gastech giving me an opportunity for both.
Steve Hill will be speaking at Gastech on September 17 at 16:30 as part of the Global Business Leaders’ Panel: How can buyers and sellers find a balance to co-operate and develop strategies for long-term market growth?