Update: The Impossible Paradox of Global Gas and the Energy Transition

December 6, 2022

US Liquified Natural Gas industry did not exist 10 years ago.
The US is now neck and neck with Qatar for world’s largest LNG exporter.


Russia’s catastrophic Ukraine invasion has devolved into a resource war with the wider world, Russia using natural gas and its control of pipeline supplies as a weapon against Democracy, and a global rule of law.

Europe, due to some quick planning and execution on the infrastructure side, looks like it can make it thru this winter, barely, if weather cooperates.
But in the meantime, with Europeans willing, and able to pay 2, 3, or even 10 times higher than normal price for gas, countries in the developing world are being priced out of the market – wealthy countries are, in effect, “exporting blackouts”, as Pakistani economist Ammar Habib Khan explained to me a few months ago.

As CNBC’s Bryan Sullivan notes below, October in Germany was the warmest in 140 years of records. We know that an increasingly unstable jet stream makes any hopes that luck will continue tenuous at best.
European storage facilities have been filled this fall in part while Russian gas was still flowing earlier in the summer. That supply is now cut. To achieve the same levels this time next year – the math is daunting.

The possible bright side of this crisis is that, globally, the transition to renewable energy has been turbocharged.

The contradiction there is that building out the LNG capacity that Europe needs now would take most of a decade, but the natural gas so desperately needed now, may not be in a decade or 15 years.
Presenting the impossible paradox of the energy and climate emergency.

Sky News:

The global energy crisis is turbocharging an “extraordinary” boom in renewable energy so vast it could yet “keep alive the possibility of limiting global warming to 1.5C”.

That verdict from the world-leading International Energy Agency (IEA) comes today in a new report, which also predicts the world will build as much wind, solar and other renewable power in the next five years as it did in the last 20.

The massive expected increase is some 30% higher than the amount of growth forecast just one year ago.

That fact highlights “how quickly governments have thrown additional policy weight behind renewables,” amid energy security concerns following Russia’s latest invasion of Ukraine, the IEA said.

“Renewables were already expanding quickly, but the global energy crisis has kicked them into an extraordinary new phase of even faster growth as countries seek to capitalise on their energy security benefits,” said the think tank’s chief, Fatih Birol.

However, a separate report last month from NGO Urgewald warned oil and gas majors are planning a “frightening” expansion that would pump out an extra 115 gigatons of climate-heating carbon dioxide – the equivalent of 30 years of European Union emissions.

The analysis from the IEA still finds an “extraordinary new phase” of growth will see solar overtake coal to become the largest source of power worldwide by 2027.

US natural gas prices below.

Advertisement

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: