Natural Gas is the Real Deal

Natural gas will be the "backbone rather than the back-up" of the global energy supply mix but the industry must change public perception about unconventional development methods, Shell International Chief Energy Adviser Whim Thomas said this week.

"It is not a temporary back-up until renewables take over," he told delegates at the Global Business Summit on Energy in London.

"Renewables grow very fast but we need more fossil fuels to meet demand," he said.

A recent International Energy Agency report showed that renewables in OECD countries in 2011 took their share of the total primary energy mix from 7.8% to 8.2%, while natural gas consumption remained flat. In non-OECD countries, gas consumption increased by just 2.1% in 2011, "a much smaller increase than the sizeable 7.2% leap seen in 2010," the IEA added.

But, "it is still an age of hydrocarbons," Thomas said.

With a required investment of $380 billion/year, the global gas market is estimated to see growth of 50% by 2030 and double today's level by 2050, Thomas said.

He added that natural gas is "acceptable, abundant and affordable [with] 250 years of reserves at present production rates" and has half the carbon dioxide emissions of other fossil fuels, such as coal.

"Gas really does have a bright future," but the public perception regarding unconventional gas is a major challenge faced by the industry, he said.

"Protests around non-conventional gas have led to knee-jerk reactions by governments," he added.

Thomas said the UK is playing a leading role in addressing the issue and called for industry to take charge in changing public opinion by being more transparent, publishing operating principles and engaging with local communities.

"This will not come by itself; industry needs to play a leading role rather than a passive one," he said.

AMEC Chief Operating Officer Neil Bruce echoed Thomas' view that gas will remain a major part of the energy mix.

"Oil and gas is a key part of the energy mix," he said. "The really encouraging thing over the last 5 to 10 years is the actual political and community debate moving away from 'either/or' and now it's talk of a mix."