Gas sector is opting for long-term relevance

30-05-2017

Recently I was in Amersfoort at the anniversary conference of the Klimaatverbond (Climate Alliance). We (Gasunie and GasTerra) sponsored this event, which revolved around making residential areas 'gasfree'. An interested bystander might wonder why. Companies generally strive to maximise sales and profits; they try to sell as many products as possible at the highest possible price. Is the gas industry an exception to this? And how credible is this? Who takes a butcher seriously when he says we should eat less meat?

The answer to this is simple: social responsibility and enlightened self-interest. The gas sector is faced with a choice: does it want to maximise short-term profits or remain relevant over the long-term? If it chooses the latter, then gas companies must play an active part in implementing the required transition to a climate-neutral energy supply and even help to accelerate it, given the urgency of the situation. If our industry does not participate in these activities, then more and more people will start to see it, justifiably, as part of the problem instead of the solution. In the end that will inevitably lead to the loss of our social licence to operate and consequently to loss of continuity.

This would be welcomed as a blessing by some people but this conviction fails to recognise that the companies involved will be indispensable for our energy supply for many decades to come, also for 'greening' the energy mix, for that matter. For we can replace some or all fossil energy carriers such as natural gas, petrol and diesel with renewable fuels such as green gas and hydrogen. We will need the sustainable products just as much as the wind parks, wind turbines and heat networks, if we are to achieve the ambitious emissions reduction targets set by the Paris Climate Agreement; similarly, we will need the expertise and resources of the energy companies making, marketing and distributing these products. It is not a coincidence that these are mainly the same companies currently still earning most of their profits from fossil energy. Of course, if they are to be able to speed up the transition towards a cleaner world, they need to remain financially robust and in a position to continue investing, including in fossil energy carriers, as long as this is necessary for security of supply.

“Use natural gas where, for many reasons, sustainable alternatives are not, or are less, attractive”

This is not a popular point of view, particularly for the more idealistic members of the sustainability movement. It is a tragedy for prominent 'eco-warriors': the thought that you are using Beelzebub to cast out the devil by continuing to invest in the production of natural gas, particularly from the North Sea and the small fields, and in infrastructure, is an abomination. But that is the only way to make progress: Keep your options open and, I would add, see how those options might evolve.

The gas sector, united under the umbrella of the KVGN (Royal Dutch Gas Association), has converted this idea into a new offering for society: gas-by-design. This means, among other things, that we will continue to use natural gas in those places where, for many reasons, sustainable alternatives are not, or are less, attractive. This proposition is based on achieving the necessary reduction in CO2 emissions. Because, at the end of the day, that's what it is all about: which resources are, in the short- and medium-term, the most effective for cutting emissions such that the average global temperature increase is kept at one and a half degrees.

In this regard the anniversary conference was a success; it proved to be a successful exercise in both idealistic and pragmatic philosophies and actions. For ambitions are great but you must also be able to fulfil them. The task of making buildings in the Netherlands gas-free is enormous and the associated complexities and costs are underestimated by many people. I have heard some people say that we built the gas network in ten years in the 1960s, therefore we can also take gas out of residential areas again in ten years. That's a misconception; the social, demographic, cultural and economic changes we have experienced since that time have made the Netherlands into a completely different country. There are more than twice as many households, mums are not always at home and there is no key under the doormat. Nor is it necessary or even desirable for a responsible climate policy. A fully sustainable energy supply is certainly the end goal but renewable sources are a means to achieve this, especially for the time being. A means that will quickly become more important over the next few years, at the expense of fossil energy.

Anton Buijs
Chief Communication Officer, GasTerra