From the Covid-19 pandemic and supply chain shocks to increasing inflation and Russia’s intrusion of Ukraine, federal governments and companies around the globe are trying to deal with and fix significant crises– a lot of them interlinked– on numerous fronts.
Against this tough background, energy markets have actually been roiled, with gas and oil rates rising and fears over security of supply– Russia is a significant exporter of hydrocarbons– increased following the war in Ukraine.
All the above is happening at a time when significant economies and huge companies are developing strategies to move far from nonrenewable fuel sources to low and zero-emission options.
Events in Europe over the previous couple of months have actually tossed the fragility of this prepared energy shift into sharp relief. Speaking at the World Economic Forum in Davos recently Fatih Birol, the executive director of the International Energy Agency, stated he believed we were “in the middle of the first global energy crisis.”
During a different conversation at Davos moderated by CNBC’s Steve Sedgwick, a panel of professionals and magnate attended to how finest the world might discover an escape of the troubled scenario it now deals with.
“We are at a crossroads,” Mar Ãa Mendiluce, CEO of the We Mean Business Coalition, stated. “One could think that, because of the energy crisis, it makes sense to invest in fossil fuels, but it’s rather the opposite,” she stated.
Gas was now more costly than solar or wind, Mendiluce argued. The objective of keeping worldwide warming to 1.5 degrees above pre-industrial levels– a crucial part of the Paris Agreement– was, she stated, “pretty much dead unless we accelerate the transition.”
Clean energy, Mendiluce stated, supplied energy security, tasks, a healthy environment and was expense competitive. “So it is now or never … if you’re going to invest, you’d rather invest in renewables than … in an asset that might become stranded pretty soon.”
Patrick Allman-Ward is CEO of Dana Gas, a gas company noted in AbuDhabi Appearing along with Mar Ãa Mendiluce on CNBC’s panel, Allman-Ward, maybe unsurprisingly offered his position, made the case for gas’ continued usage in the years ahead.
“As you can imagine, I’m a firm believer in gas as a transition fuel and the combination, particularly of gas together with renewable energy, to solve the intermittency problem,” he stated.
“Because yes, we have to go with renewables as fast as we possibly can in order to achieve our net zero objectives. But … wind doesn’t blow all the time, and the sun doesn’t shine all the time. So we have to solve that intermittency problem.”
The concept of utilizing gas as a “transition” fuel that would bridge the space in between a world controlled by nonrenewable fuel sources to one where renewables remain in the bulk is not a brand-new one and has actually been the source of heated argument for a while now.
Critics of the concept consist of companies such as the Climate Action Network, which is headquartered in Germany and includes over 1,500 civil society companies from more than 130 nations.
In May 2021, CAN set out its position on the matter. “The role of fossil gas in the transition to 100% renewable energy is limited,” it stated, “and does not justify an increase in fossil gas production nor consumption, nor investment in new fossil gas infrastructure.”
Back in Davos, Mendiluce assessed the arguments advanced for using gas. “I get your point, you know, that maybe now the market will demand more gas,” she stated.
“But when I speak to companies that are now dependent and have a high risk in gas, they’re looking at ways to shift it. Maybe they can’t do it in the short term, but they know that they’re going to do it in the mid-term.”
Renewables, she went on to state, were a “competitive source of energy,” including that speed of release was now crucial. “So if I was to invest … I would be very careful not to invest in infrastructure that will become stranded.”
