What Australian gas can expect from COP 21

Paris is playing host to the world's leaders for COP 21 climate talks.

Paris is playing host to the world's leaders for COP 21 climate talks.

The Australian gas industry can expect positive news from the COP 21 climate talks in Paris, with many commentators, including Deloitte, predicting the talks will push for policies to incentivise gas use in order to provide a cleaner energy mix for contributing nations.

The two-week conference began on 30 November, and already Prime Minister Malcolm Turnbull has declined to end fossil fuel subsidies but pledged a substantial part of the Australian foreign aid budget to help vulnerable nations deal with climate change.

Each nation present has so far made a pledge to reduce emissions so global temperatures don’t rise by more than 2°C. 

It’s going to be a news packed fortnight, with potentially enormous impacts on Australian natural gas given its status as the lowest producer of emissions of all fossil fuels. The recent shift towards gas in many developed nations has already proved beneficial as countries and companies strive to reduce their carbon footprint.

Speaking to Gas Today, Deloitte partners of Sustainability Services, Paul Dobson and Shailesh Tyagi, both spoke of the positive but business-minded attitude that is coming out of the COP 21 discussions.

“There is clearly a pragmatic approach – and although there will be those either at or on the fringes of the conference who would like to turn off coal tomorrow, that’s neither a realistic nor practical approach. We are in the midst of a transition and nations and businesses are ready to get onto that transition road,” Mr Dobson said.

“The energy mix is what is needing to change. And it is; although it will take time. The COP is about balance, and putting us on a forward trajectory. It’s the energy mix that will adjust over the coming years and gas will have a key role to play in that mix as the lowest emission fossil fuel.

“National governments are taking a more positive outlook towards this, and businesses are much more on board. Look at ‘We Mean Business’ for instance. It is a global pledge, and a who’s who of large companies both local and global that are wanting to join forces with state and national governments to do the right thing together. Things are moving in the right direction. What’s going to be the right answer? No one’s sure but there is a lot more positivity around getting to that two degree world.”

Mr Tyagi said “What has gone very well this time is not only the commitment and pledges by the countries, but you also have big global players such as Unilever making massive commitments in this area.

“The second point is the ‘matter of money’, as I call it. Developing countries are seeking more pledges into massive funding, as they say “global warming was not created by us”. However,  whether this argument is germane or not, developing countries also need to have targets to enable the funding to be created. If India decides to invest in one thing, and China decides to invest in another, then the funding will come, because markets will be created. It then shifts from politics to a business case for both.”

Mr Tyagi added “COP is all about how we can invest in low carbon economic activities and how we can bring both private and public sectors together for research and development. COP 21 is an attempt at creating the right energy portfolio mix that contains a clean coal technology, both conventional and unconventional gas, and more investment into the renewable energy sector.”

And the place for Australian gas was made evident by Gas Today editorial board member Keith Orchison, in his This is Power blog. Orchison drew attention to France’s president Francois Hollande after he described coal, oil and gas as being “the energy of yesterday” when talking on day one of the conference.

“Fact check that against the projection of the International Energy Agency (of which France is a prominent member) a fortnight ago that $US25 trillion will be spent on oil and gas development alone between now and 2040 on the basis of the pledges the summit nations have made,” Orchison writes.

“Or contrast it with the IEA’s special report proposing a much more ambitious “bridge scenario” — aimed at pushing more strongly towards achieving the two degree warming goal — which sees power generation capacity in 2030 being almost 1,800 gigawatts coal-fired and 2,100 GW gas-fuelled (versus about 2,300 GW non-hydro renewables).”

The numbers suggest the gas industry is not only going to help the world meet both its emission targets and energy demands, it is essential to the success of future energy plans.

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