The Role of Natural Gas in the Transition to Renewable Energy

The Role of Natural Gas in the Transition to Renewable Energy

Alex Volkov
Vice President Global LNG Marketing, ExxonMobil Upstream Oil & Gas Company
Gastech 2020 Virtual Summit, Global Leaders Panel
Recorded via Zoom and broadcast September 7, 2020

The Role of Natural Gas in the Energy Transition

Thank you and it’s a pleasure to be here with you on Zoom today, albeit in a very different setting than last year’s Gastech in Houston. I hope that all of you that are joining us are safe and healthy. I’m also thankful we have technology that allows us to still get together and talk about the LNG and the importance of our industry going forward. There will be, one day, a post-pandemic recovery where we are once again able to function as a society without the fear and constraints we see today.

There are few challenges more important than meeting the world’s growing demand for energy while reducing environmental impacts and the risks of climate change. Affordability, particularly for LNG, will be a key enabler for any global energy solution.

Natural gas plays a key role in the energy transition now and is expected to continue to play a key role in the future to help meet government climate targets. But there are also immediate benefits now. As you know, natural gas is abundant and can help to reduce GHG emissions quickly, at a large scale and in a cost-efficient manner in all sectors versus other fossil fuels.

Replacing coal with natural gas for power generation reduces GHG emissions by up to 60%, NOx by up to 90% and particulate matter/SOx by up to 99.9%. Natural Gas can support higher penetration of renewables, lowering GHG emissions in the power sector by maintaining reliability, resilience and stability of the grid. We can see that natural gas plays a pivotal role in meeting demand and lowering emissions, but LNG will be the key in making this a reality and we are preparing to meet the future capacity needs today.

It’s important to note that ExxonMobil takes a long-term view, particularly with regard to economic development and resulting energy demand scenarios. While this changing marketplace demands flexibility and innovation from energy producers, the transformation we’re seeing across the energy industry signals opportunity for both producers and consumers, particularly for nations accelerating economic growth and for those established markets striving to meet environmental goals.

With effective partnerships, natural gas can unlock cost effective long-term energy solutions as a partner with low carbon gases and renewables.

Growth in our society will continue. Demand for energy will follow and we will be there to meet that demand. We expect natural gas demand to grow by 1.3% per year to 2040 and LNG will meet about one third of that gas demand growth.

More capacity will be needed to meet the growing demand. In this current business environment, capital investments across the industry are expected to be down from previous announcements, but we remain committed to the global LNG business. Due to market conditions, we are mindful that some of our projects may proceed at a slower pace than previously anticipated.

To wrap up, let me say that in the midst of an evolving energy landscape and a dynamic marketplace, we’re excited about the critical role natural gas will continue to play in powering the global economy and fueling its growth.

The case for natural gas as an integral component in the world’s future energy mix is clear. In a society increasingly recognizing that economic development and environmental progress must go hand-in-hand, natural gas offers a solution toward a more prosperous and sustainable future. So I am enthusiastic about the future of gas and the great applications that await its use.

Thank you and I look forward to hearing my colleagues and the upcoming discussion.

Alex Volkov