International Gas Union president, Dr Abdul Rahim Hashim, recently spoke with Pipeline Magazine about the increasingly important role of natural gas within the global energy mix
GAS is a key fuel source in addressing the energy challenges faced around the globe, according to Dr Hashim. “For example, 21 per cent of the global energy mix is now gas, and by 2030 this will increase to 25 per cent, which is the fastest rate of growth among all fuel sources,” he says.
Speaking on the sidelines of the World Petroleum Congress, which was held in Doha, Qatar in December 2011, he emphasised another leading industry event, the World Gas Conference (WGC), the flagship event of IGU. Taking place in June this year, it showcases the many issues, challenges and opportunities facing companies and governments involved in the gas sector.
According to Dr Hashim, the broad focus of the conference mirrors that of the IGU itself: “IGU covers the entire value chain of the gas industry, from exploration through to utilisation, including exploration, production, storage and transmission and at the same time, we address issues of sustainability.”
He explains this is a particular area of interest to the IGU and its members, with sustainability in this context referring to both sufficient ongoing energy supplies and to environmental awareness. “A lot of talk in the area of sustainability is around renewable energy sources, but we believe this should also address the sustainability of other fuel sources. We believe gas is an important part of the sustainable energy system of the future.”
“The reason for that is very simple– just as renewable energies in the form of solar and wind power can be switched on and off very quickly, so too can gas supplies,” he says, with gasfired power plants able to be activated and deactivated much faster than their coal or nuclear-powered equivalent.
Dr Hashim explains that the Middle East has been extremely important to the efforts of the IGU, particularly Qatar, with Qatargas marketing director, Alaa Abu Jbara, chairman of its co-committee on LNG.
“They have been very active in the organisation, we had our council meeting in Doha in 2010 and they have also contributed in terms of being involved in the various committees we have. This sees them provide necessary expertise, having made a significant contribution to the IGU’s World LNG Report and in making its skilled staff available on the IGU’s various committees.”
Challenges among the opportunities
“The major challenge for us is making sure that gas is part and parcel of energy policy documents for various countries.
Gas is a fuel source that is often taken for granted – we want to increase the representation of gas within national policies, especially in Europe and also in the US,” says Dr Hashim.
In discussing some of the key successes the IGU has had in this regard, he points toward another key industry body, the International Energy Agency. Having previously concentrated on the oil industry, in recent years the IEA has broadened its focus to also cover gas, with its June 2011 report,
The Golden Age of Natural Gas, one of the most prominent examples of this. “That’s something which has completely, dramatically changed the view as far as gas is concerned. There’s no one single solution to addressing the energy issues of the world, but natural gas is very important.”
The pricing dilemma
Another of the challenges facing gas exporters and importers is the issue of gas prices, with pricing models varying across different markets in the US, Asia Pacific and Europe.
“Our view is that the gas market should determine gas prices…I think the market wants to move away from oil-indexed pricing, to be more open, but obviously producers want it to be linked to something,” says Dr Hashim.
“The reasoning for this is the long-term nature of many projects, which require huge capital expenditure. In order to finance these, investors need something that is substantive to which they can link gas prices.”
Natural gas versus unconventional
One of the key issues in terms of energy sources, including gas supplies, is energy security. As Dr Hashim explains, “the reserves that we have in terms of conventional gas supplies is around 60 years, based on what we know about consumption and reserves. With unconventional, this number rises to around 250 years.”
Unconventional gas is a massive resource that is available not only in the US but also in other parts of the world.
“In terms of conventional gas, around 60 per cent lies in three countries – Russia, Qatar and Iran. With unconventional, this also takes in Europe, US and South America, along with some parts of Australia and South Asia. It’s much more widespread, so in terms of security of supply, it is much more diverse.”
He also points to the challenges that exploration and production of unconventional gas reserves have presented, most notably in the US, where issues of environmental damage, water consumption and pollution have made headlines around the world. “We understand there have been some misconceptions, perhaps some lack of full understanding around the issues related to the extraction of shale gas,” says Dr Hashim.
“What the industry needs to do is become much more transparent and make sure the design and operation of shale gas is truly at a standard that provides safe operations, at the same time making sure all these issues are put on the table for the general public to understand. Some of these issues can be resolved with proper dissemination of information.”
As he begins the last six months of his tenure as president of IGU, along with participating in the WGC 2012, a key focus for Dr Hashim and the IGU during this period is its development of a roadmap that will provide industry forecasts over the next 20, 30 and 50 years and perhaps beyond. According to Dr Hashim, the IGU hopes to release this report in April this year, “this will give us a view of where natural gas will be as far as the global energy industry.”
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