We don’t have the luxury yet to be choosing technologies for the energy transition

In an exclusive interview with Energy Connects Editor-in-Chief Chiranjib Sengupta in Houston, Joe McMonigle, Secretary General of the International Energy Forum (IEF), spoke about the critical role of natural gas and LNG as low carbon energy sources for the transition. Highlighting the importance of clean utilisation of gas to compliment renewable energy, the Secretary General explained why technologies such as carbon capture and storage (CCS) are vital to the sector’s future success not just as a bridge to the transition, but as a transition solution in itself. Here are the edited excerpts:

What are your thoughts on the role of natural gas and LNG in the current energy mix?

I think it was like 10 years ago when the International Energy Agency (IEA) came out with a report called the Golden Age of Gas, and basically predicted that natural gas would grow by 25% of the energy mix. And in this case, the IEA was spot on: natural gas is really about 20% now of the energy mix globally, and I think it's on track to grow even more. Natural gas has proven itself as a low carbon energy source in a world searching for low carbon solutions. It also is a great complement to wind and solar, which are intermittent. And of course, it's a feedstock for so many other resources.

But I think going forward, natural gas is going to continue to play a really pivotal role because sometimes it's talked about as a bridge to the transition, but it actually is a transition solution in and of itself. I mean, if we think about the possibilities of coal to gas switching and the enormous reductions in CO2 and other pollutants that we could reduce as a result of that, in the US alone, switching from coal to natural gas has really put us on track to meet our climate goals, especially here in the US. But of course, we need to do this more globally. So I see a lot more room for growth for natural gas.

There are also other platforms, like for example, in shipping and maybe even in road transport. In China, they're successfully creating LNG trucking which is displacing a lot of diesel and oil. So I think natural gas has a lot more room to grow, and that’s why we must talk about not just the future demand, but how we can continue to utilise the resource but in a cleaner way.

"Natural gas has proven itself as a low carbon energy source in a world searching for low carbon solutions. It also is a great complement to wind and solar, which are intermittent. And of course, it's a feedstock for so many other resources. I think going forward, natural gas is going to continue to play a really pivotal role because sometimes it's talked about as a bridge to the transition, but it actually is a transition solution in and of itself."

With so many conversations taking place around the energy transition, why do you think it's so critical to have a focus on upstream investment?

Well, I'd like to say that we really need to manage the transition. I think like three or four years ago, it was a one-way conversation about the transition that basically had to be done at all costs. So there was really no regard to affordability or to really the practical and realistic goals that were being set, or how realistic the goals that were being set were.

I argue very strongly when I meet with ministers and policymakers that we have to be very careful and manage the transition because the one thing I'm very concerned about is high prices and volatility as a result of underinvestment in upstream oil and gas. So while we pursue the transition and all these new technologies, we have to keep investing in oil and gas because it's going to be with us, whether we like it or not, through 2050. And natural gas has even more legs and greater growth along the path to 2050.

The IEA’s technology report that they do every two years was updated recently. Essentially, it's a great summary of where we are in the transition because the report says wind, solar, hydro and traditional nuclear can get us about halfway to meeting our climate goals. The other half has to come from new technologies that are not commercialised yet or even envisioned yet. Of course we have to put hydrogen and CCS in there. Fusion is a growing technology, but it needs to be further commercialised and proven although we're making great strides there.

So the point is, until the other half, those technologies are ready, we have to keep investing in oil and gas. If we don't, high prices and volatility will be the new normal. And that will undermine public support and progress on climate and the transition.

Is there any particular technology that you would bet on for the next decade or so?

Well, I don't think we really are in a luxury position to be choosing technologies. I think just like energy sources, we need all of the above. the technologies we need all the above. We need to see what will really work. And I'm a little concerned because some governments around the world tend to play favourites on the technologies. Hydrogen certainly has a lot of momentum behind it, and the European Union in particular has put a lot of money behind it and has given a lot of momentum. But something like CCS is also a much needed technology that we need, but it doesn't have as much investment behind it.

We have to go from small amounts of CO2 that are captured now to billions of tons. So we need a lot more work done there and it requires investment. We need policymakers to focus on Article 6 at the next COP meeting so that we create some investments for technologies like CCS.

But I'm really excited about small modular reactors: I think it has a great potential. I noticed that in the US, in AI and the data center, super-computing sectors, they're all looking at small modular reactors just for the data center consumption. Fusion is really exciting as well and there's a lot of private capital now chasing fusion. We have a lot of possibilities out there, and we need to invest more in clean tech and R&D. That's going to be the real secret to meeting our climate goals, and it’s going to be a very interesting decade ahead in terms of technology.

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