Shell chief says new innovations will make a difference; urges Thailand to keep focus on gas
The price of natural gas is expected to continue falling and can potentially become the “backbone” of cities around the globe in the future, says a global head of Shell’s gas unit.
Jefferson Edwards, Shell’s general manager for Global LNG and Gas Market Development told a conference held in Singapore earlier this week that the energy firm predicted the prices of natural gas would stay on a downward trend due to innovations taking place in the United States and China. “We think cost will continue to fall as innovations come out of China and the US,” said the Shell executive, referring to the development of shale resources in the world’s two major economies.
The so-called “shale revolution”, that comes as a result of innovations in drilling techniques, has led into a major decline of natural gas prices.
The Economist Intelligence Unit has forecast that the price of liquefied natural gas (LNG) in the Japan, one of the biggest markets for LNG, will slide from US$16.2 per million British Thermal Unit (BTU) in 2013, to $15.6 this year, $13.9 in 2015, $13 in 2016, $12.5 in 2017, and to $12 in 2018.
In Thailand, where natural gas has already contributed to more than 70 per cent of fuel for power generation, Edwards argued the country should still continue to look at gas considering its challenge in developing a coal-fired power stations.
“Obviously, building a coal-fired power plant will be a challenge. If you look at the efforts in the south, the timelines have slipped and slipped and then the country can slip into an energy crisis,” he said, referring to the delay in the Electricity Generating Authority of Thailand’s coal-fired power project in the southern region.
Speaking at the global launch of the report “New Lenses on Future Cities” during the World Cities Summit 2004 held in Singapore earlier this week, Edwards said Shell aimed to have more frequent dialogue with mayors and municipality officials around the world to provide them a better standing of the benefits of natural gas, which it believes can become the backbone of cities in the future.
Despite some perceptions that natural gas is more expensive than other fossil fuels, Edwards said taking all “externalities”, especially healthcare costs, gas is very competitive with coal since it releases 50 per cent less carbon dioxide and less other emissions. Furthermore, the ability of a gas-fired generator to quickly ramp up and down, and to provide intermittent output, makes it a complementary match to renewable energy like wind power and solar power, rather than competing against it.
In his presentation, the Shell executive described some other features that demonstrated how natural gas could become the backbone of a city:
_ Combined heat and power: Gas can be used to power industries with increased efficiency by using waste heat for water heating or air-conditioning.
_ Micro combined heat and power: Gas can be used to heat homes and offices while allowing waste energy to generate power, improving efficiency.
_ Fuel cells: Gas can be used in fuel cells, which enable clean and efficient energy supply for cities.
_ Road transport: Natural gas can be used as CNG, LNG, fuel cell to fuel road transport.
_ Cooking: Natural gas can be used to provide fuel for cooking.
_ Water transport: LNG can power river barges, emitting 25 per cent less greenhouse gas emissions and pollution than traditional fuels.
However, some recent reports, including a study Methane Leakage from North American Natural Gas Systems, published in the February 14 issue of the journal Science, have argued that using natural gas will not help the world get over its climate-change problem, citing the normal leakage of methane during the process of natural gas production.