Session summaries
Khalid Bin Khalifa Al Thani, Chief Executive Officer, Qatargas
John S Watson, Chairman and CEO, Chevron
Rex Tillerson, Chairman & Chief Executive Officer, ExxonMobil
Ben Van Beurden, CEO, Royal Dutch Shell
Khalid Bin Khalifa Al Thani, Chief Executive Officer, Qatargas
Natural gas is the solution to maintaining stable and secure energy supplies when the wind is not blowing and the sun is not shining, concluded Khalid Bin Khalifa Al Thani, Chief Executive Officer of Qatargas, who addressed the 26th World Gas Conference on Tuesday morning. Mr. Al Thani cited the role of natural gas in the development of a sustainable energy system. It is the only fuel available in such abundance that could adequately support greater use of renewable energy technologies, he said. Though fossil fuel reliance could not be overcome overnight, greater investment in natural gas, along with the removal of older, less efficient infrastructure, would be central to an overall reduction in emissions. He also highlighted the attraction of LNG as an alternative to higher polluting and less reliable fuel sources, referencing Qatar’s leading role as a developer of LNG. Calling for its greater use as a transportation fuel, Mr. Al Thani said LNG could help meet energy demand from a growing global population, which he said is predicted to reach eight billion in the coming years. Recognising Europe’s role as a leader in renewable energy development, he encouraged the wider adoption of natural gas as a means to underpin a lower carbon economy. Mr. Al Thani acknowledged the commitment of the United States to addressing climate concerns, while also citing China and India as examples of countries working to reduce pollution on public health grounds.
John S Watson, Chairman and CEO, Chevron
Mr. Watson opened his speech with an inclusive message: “The world is going to need all forms of energy if we are to meet global demand – oil, coal, gas, renewables…”
Highlighting the scale of the challenge, he said: “Global energy demand will increase 40% by 2035 as incomes increase and the middle class expands”.
A larger middle class, he explained, will result in greater demand for energy in the home as well as the business and manufacturing sectors. Meanwhile, 1.4 billion people around the world still do not have access to electricity and 2.5 billion people still burn solid fuels to cook and heat their homes.
To meet the challenges presented by this increasing demand, and to drive growth and economic prosperity, it will be essential to generate affordable energy, said Mr. Watson.
Natural gas and LNG will be essential to the energy mix, he continued. Indeed, natural gas as part of Chevron’s portfolio is growing significantly. The challenge, however, is where new supplies will come from in order to meet the rapidly rising demand.
Mr. Watson noted the ‘tremendous growth in natural gas in the United States due to shale’, noting that it would not be long before the excess will be exported from the US as LNG. He said that the success of the shale market in the US was in large part due to the regulatory system which facilitated the growth of the industry and transformed the US into an ‘energy super power’. Given the significant natural gas reserves around the world, Mr. Watson argued that opportunities for development are multiple but not all countries can or choose to develop supplies, meaning many countries will rely on LNG imports instead.
The difficulty for those who are developing new greenfield projects now is that they will need to be economically viable. This is a challenge given the low price set by the US brownfield sites. The solution will be to find innovative ways of making the new sites economically competitive. At the same time, he concluded, host government support will be critical to attract investors.
Rex Tillerson, Chairman & Chief Executive Officer, ExxonMobil
Energy is the gateway to economic development and advancement, said Rex Tillerson, Chairman & CEO of ExxonMobil as he addressed the26th World Gas Conference in Paris on Tuesday morning. Expanding use of natural gas is essential to meeting anticipated energy demand growth of 35%, he continued, particularly for communities that remain unconnected to electricity grids and without stable energy resources for cooking and heating.
Mr Tillerson cited a predicted growth in gas demand of 65% over the coming 25 years, with gas overtaking coal as the second most prolific fuel source by 2025 and exceeding oil by 2040. Referring specifically to unconventional gas demand, driven in part by the US shale gas revolution, he anticipated growth of approximately 300% over a similar period. Mr Tillerson also referred to the extensive natural gas reserves in Europe but called for countries such as Germany and France to embrace greater dialogue about unconventional gas production as a means of enhancing energy security and greater diversity in their energy mix.
Shale gas development in the United States, he continued, has supported millions of new jobs and revived manufacturing during a period of limited macroeconomic growth. Greater diversity in the energy portfolio has also enhanced international energy security, which has played a role in global stability.
New technology has delivered significant environmental performance improvements, including reducing CO2 emissions in the United States to levels last seen in the 1990s, despite the addition of more than 50 million energy consumers and the lack of a comprehensive cost of carbon policy.
Mr Tillerson called for greater collaboration between government, industry and the public to provide the right policy signals and the transparency and clarity needed to secure long-term, stable investment for technology that will enable supplies to be expanded in a safe, reliable and environmentally responsible way.
Ben Van Beurden, CEO, Royal Dutch Shell
Ben Van Beurden, CEO of Royal Dutch Shell, used his keynote speech at the World Gas Conference today to re-iterate his call for a robust carbon pricing system on a regional, national and international scale.
He argued that without a robust carbon price, the world will see the continued emergence of a coal and renewables based energy system. Coal is cheap, he explained, and renewables are heavily subsidized. The result will be higher emissions, not less.
Mr Van Beurden asked how do we ensure that gas, not coal, is at the heart of the energy solution to meet rising demand.
“The benefits of gas are well documented,” he said. “Gas is flexible, abundant, its ranges of use are increasing, it’s a strong ally for renewables, and it makes economic sense. Building gas power stations is faster and cheaper than coal. So, the quicker we move away from coal to a mix of gas and renewables, the cheaper energy will become.”
“Still, the golden age of gas will not come automatically; we will need to work for it.”
As well as policy certainty provided by a robust carbon price, Mr. Van Beurden argued that the industry must work together to emphasise the importance of gas as a flexible, reliable complement to renewables. “Renewables are crucial,” he said, “but they still depend on flexible back-up for when the wind doesn’t blow or the sun doesn’t shine.”
At the same time, he argued that it will be essential to drive down capital cost inflation. “The cost of gas will be critical to success,” he explained. “By this I mean capital costs through supply chain integration and the standardisation of design, construction, and engineering.”