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Critics of Gas Should Be Realistic

Author: Michael A. Levi, David M. Rubenstein Senior Fellow for Energy and the Environment and Director of the Program on Energy Security and Climate Change
November 28, 2012
Financial Times

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Delegates arriving in Qatar next week to attend the annual UN climate change negotiations may wonder whether the choice of venue is a bit daft. The tiny Gulf emirate, a member of Opec, the oil producers' cartel, owes its prosperity to fossil fuels, while the climate agenda aims to move the world away from the stuff.

Yet Qatar, which has staked its future not on oil but on natural gas, is the perfect place to tackle a question that has become central to the climate debate: should natural gas – cleaner than coal and oil but still a fossil fuel – be embraced or avoided by a world seeking solutions to climate change?

Two trends are propelling natural gas to the heart of climate policy discussions. The first is the steady emergence of a robust global gas market, with Qatar at its centre. The second is the shale gas boom that has delivered massive new supplies in North America and might yet do the same elsewhere in the world.

Its advocates embrace cheap natural gas as an answer to the world's climate woes that is rare in that it requires little or no action from governments.

The logic is straightforward. The world still generates 46 per cent of its electricity from coal, a figure that is projected to increase slightly over the next 25 years without any changes in government policies. Replacing coal-fired power stations with gas-fired equivalents slashes carbon dioxide emissions roughly by half. If natural gas is abundant and cheap, the market will make this replacement on its own, reducing climate risks in the process.

This view is popular in the US. But it has received a wary welcome in Europe and among climate activists, for whom dealing with climate change is inseparable from efforts to boost renewable fuels.

Alas, those who oppose natural gas on the grounds that all CO2 emissions are intolerable, are living in a fantasy world. Curbing supplies of natural gas immediately would simply lead to more use of coal and oil because renewable, zero-carbon energy is still relatively expensive. The result would be higher CO2 emissions and greater climate risks.

Yet in the long run gas sceptics are correct. If the world is to meet the long-term climate goals that policy makers have embraced, it will need to start turning to zero-carbon sources within a decade or two. That will mean moving away from coal and natural gas, unless a cost-effective way can be developed to capture and store the emissions these create. It also means pursuing renewable energy and nuclear power, which today are the only commercially viable zero-carbon electricity sources.

Therefore a near-term shift to inexpensive natural gas may undermine incentives to innovate cheaper approaches to renewables and nuclear power, which must be developed to support a transition to zero-carbon power.

In light of these competing claims, the delegates in Doha would benefit the world by coming to a mutual understanding. Abundant gas is good news in the foreseeable future: the US should be applauded for its gains, others should seek to emulate it, and all should use policy to encourage the replacement of coal with gas in the short term. Doing so sustainably will require active international co-operation to make sure nations learn from each other's experiences, particularly when it comes to extracting shale gas safely.

But the parties should also agree that gas is far from a permanent climate solution. With that in mind, they should strengthen their efforts, individually and collectively, to promote innovation and development of cost-effective zero-carbon energy options. That would include fostering technologies to capture emissions from gas-fired power plants and laying the groundwork for policies to shift energy systems from natural gas to zero-carbon options when the time is right.

This approach reflects the need for cost-effective emissions cuts to start soon and a global shift to zero-carbon energy in the not too distant future. Neither alternative – a narrow bet on natural gas or an exclusive focus on zero-carbon fuels – can deliver the change the world needs.

The writer, a senior fellow at the Council on Foreign Relations, is author of 'The Power Surge', to be published next year

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