Russia's invasion of Ukraine could accelerate momentum around transitioning to alternative sources of energy, but natural gas will remain a key part of the global energy mix, industry officials say.
Russia's invasion has made clear the value of domestic energy independence and that Europe — reeling from natural gas supply shortages — has special reason to speed up its transition to renewable sources. But conventional energy sources, and natural gas especially, are poised to play a considerable role in the energy mix for decades.
"In any scenario we see, natural gas is a big part of the energy future through 2050," Enbridge senior vice president of strategy, power, and new energy technologies Matthew Akman said at the Reuters Global Energy Transition conference today.
That is, in part, a response to mixed messaging from policymakers about their desired pace for the clean energy transition.
TotalEnergies chief executive Patrick Pouyanné criticized governments for taking a scattershot approach to oil and gas, with many countries now demanding that companies scale up production in response to shortages after years of treating the sector coldly. Conversely, Akman said it took Enbridge years to get offshore wind projects on line in Europe, calling long permitting processes "a huge challenge for the energy transition."
Boston Consulting Group managing director Paul Goydan said that governments have largely responded to the war by trying to minimize price shocks for consumers. These efforts — like the US releasing oil from its strategic petroleum reserve or Mexico subsidizing gasoline and diesel — could entrench fossil fuel infrastructure and "work against our combined efforts to tackle climate change."
Other speakers said that Russia's invasion of Ukraine had underscored the need for energy security and affordability, steering policymakers away from a single-minded focus on emissions and making natural gas more palatable.
"Policy must reflect a sustainable transition, rather than drastic measures that sacrifice quality of life," said Baker Hughes chief executive Lorenzo Simonelli, who expressed concern about renewables' intermittency.
Natural gas should not just be thought of as a "transition fuel" but as a "destination fuel" in regions that would have otherwise relied on more carbon-intensive coal-fired power, Simonelli said.
In addition, the pipelines that supply natural gas today could later transition to supplying higher quantities of cleaner sources, like hydrogen and renewable natural gas, in the future.
"It is good to invest in gas infrastructure now," Akman said.
