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Monica_55905 Oct 08

Gas: an opportunity to learn and upgrade

Gas: an opportunity to learn and upgrade image
Interview with Luis Bertrán, at the end of his mandate as Secretary General of the International Gas Union, sharing some insights of the IGU’s immediate past.
What have been the most recent changes that you have observed during your tenure at IGU?

This pandemic has coincided with a shift within the IGU, which has resulted in the organisation being able to fully integrate all activities within the secretary, since we had public affairs reporting to the Presidency. Now, events, member liaison and public affairs are coordinated together. With these internal changes, IGU has unified these fields within the secretariat, which will make us more effective, and increase professionalism.

In addition to this, we have reinforced the aforementioned public affairs team, we have increased our content (through a digital publication) and with this we intend to strengthen links with committees, which are those representing the gas industry in the different parts of the chain, and those that provide us with knowledge about the industry and latest developments.

The pandemic has also strengthened IGU's digital systems, to facilitate virtual meetings and adapt our new post-Covid way of working. This will also make it easier to streamline bureaucratic issues so that it is easier to meet the association's requirements with less effort.

What have been the greatest evolutions of IGU during the entirety of your mandate?

The secretary that I took on in 2016 after two years as Deputy Secretary, during which I had the opportunity to participate in a transformation project of the IGU. In this project that has taken practically all five years of my mandate, we decided to transform three important things about the IGU: one was the membership structure, two the organization of events and the third what we call governance.
It has been a pleasure for me to be able to lead these changes; The first thing we did in 2016-17 was to reorganize the memberships, adjusting the fees according to the size of the industry in each country, which allowed us to address more gas promotion issues in other areas.

The second important change we made was to give homogeneity to our events, and to create continuity between two events organized by different members, which helped us increase IGU's brand awareness externally. To do this, we established an Events Director, and reached royalty agreements for the IGU events for the Secretariat.

All these initiatives strengthened our finances, which allowed us to move the itinerant secretary to a permanent one, paid for by the association itself, which would be the third big change.

What have been the gas developments that you have observed?

The gas industry has continuously grown during those years. In 2018 and 2019 especially we had the highest growth in gas history in the last 20 years. It grew above the global energy demand, which meant that gas gained weight in the energy mix, going from 21% to 24% globally. Therefore, we did more to meet the world's energy needs.

Within this growth, LNG stands out, with a double-digit growth rate in the last five years of my entire tenure, an impressive development.

The number of gas terminals has grown, as well as the number of ships, tons transported, and the number of countries that use LNG. Another important factor is that this growth has been accompanied by price suppression. For this, the arrival of gas from the United States helped a lot, as it became a world exporter and set rates at very competitive prices.

Price containment has allowed the industry to expand and end users to access gas in a competitive way, compared to other sources. All this, of course, whilst reducing greenhouse gas emissions, where we also have an opportunity to continue helping to fight climate change. The added environmental benefit cannot be ignored.

In 2020, with the pandemic crisis, consumption have been reduced, however, in 2020 four new countries commissioned their part of regasification, we have four new LNG importers, and despite the fact that there was a consumption slump during the first part, and at the end of the year, a positive growth figure for LNG use of 0.4% was achieved, in the midst of the crisis.

The energy transition has not gone anywhere, and gas continues to play its role, being a perfectly valid option to leave behind the other more polluting fossil fuels. For example, with the switching from coal to gas, which supposes a very low cost, there is a very fast return on investment, and a huge environmental gain.

Which sectors present particularly interesting opportunities?

There is a very attractive opportunity in transportation. Where there is most potential is in the marine transport sector, but on land there is also a lot of potential for the use of gas, especially in heavy transport, buses, trucks and from there in trains, where the electrification of lines has not been carried out. The difficulty of incorporating batteries into heavy-duty transport makes gas an excellent solution, which also opens the door to sustainable transport thanks to being able to use renewable gases, such as hydrogen and biomethane in the near future.

In transport, short-term investment is already profitable, but in this way we also have a certainty of long-term viability. We have a continuity solution for the future, while also being able to reach carbon neutrality.
Another area with great potential is that of biogas and hydrogen production. We know that nowadays with the available biomass, not all the needs are covered to generate all the gas that we use today from a traditional fossil source, but we have technological developments that are now being tested, which we know will work, (although we are in the development phase of real projects): the capture and storage of carbon dioxide (CO2) known as CCS technology, which will allow to decarbonise natural gas of fossil origin and equalize it to renewable in terms of greenhouse gas emissions. This CO2 capture and storage would allow us to be carbon neutral using traditional gas, a variable that, when we have exhausted the possibility of creating all renewable bio-natural gases, would imply that we can continue to use natural gas with carbon neutrality.

On that aspect, how do you see the sector regarding SDG7s and emissions neutrality ambitions?

In Europe, Norway is a gas exporter that has expressed interest in exporting hydrogen and keeping CO2 in old deposits. In the Middle East, Saudi Arabia has also stated that it is willing to send hydrogen instead of methane to Europe and then we have the United States and Canada with technologies that also want to achieve the decarbonization of the gas industry with the complement of carbon capture and storage. Russia has also joined the countries developing this technology. These activities are all very positive.

With COP26 in Glasgow we can expect to see presentations on this carbon capture and storage for emissions neutrality from quite a few countries, and an association of countries with this technology is being formed.

It is refreshing to have this visibility of the mobilization of decarbonization and all these countries, especially Saudi Arabia or Russia, renewing their portfolios.

Can you give us your vision of the Latin American and Caribbean markets?

On the Latin American and Caribbean region, we have these large reserves on the continent with deposits in Argentina, Peru, Brazil, Bolivia, etc. that have the potential to be self-sufficient in energy on the continent without depending on the international market. Right now we have Chile, which is buying gas, Bolivia selling and we have Trinidad & Tobago exporting LNG abroad. This is indicative of the ability to develop the regional market, with better costs and solutions for the entire region.

For regional integration to work, we have to develop the infrastructure and the regional markets themselves, at the regulatory level so that the actors have the capacity to operate and the agility that the energy sector demands.

If we take a more detailed overview, in the southern cone we have the Vaca Muerta field, with neighbouring countries being the first logical beneficiaries through gas pipelines. These would be Chile, Uruguay, Paraguay and even Brazil.

Then we have the northern area of ​​South America and the Caribbean where the very geography of the islands makes LNG the best option. In this market, Colombia is buying at the moment, but it still has its own production and its exploratory work continues.

Panama also imports, but with the passage of LNG ships it is in the process of creating a hub in the Caribbean area. We have Trinidad & Tobago as a major gas producer with LNG exports that can cover the regional market. In other words, there are several players that can help develop the regional LNG market in this area.

A key aspect to be developed are regulatory measures, providing regional regulations so that operators can interact and exchange energy. This is within reach by setting rules based on those already existing in the world market, as is happening in Europe, with all the countries in the region accepting these norms and operating under the same standards.

For this, it is necessary for governments to understand that there is a benefit in developing regional markets, and to ensure that regulation is compatible from one country to another, so that artificial barriers are not created, and a quality standard is maintained.
In summary, natural gas has opened the door to competitiveness in the future. It is important that we continue to accelerate the use of gas, especially the switching of solid fuels, the introduction of renewable gases and the development of internal markets for the common good of Latin America.

This article was originally published in the EnergyNet Magazine issue #10. To read the full magazine content, visit here