The ongoing transition to a low carbon energy economy is having an impact on the global natural gas sector as operators work on ways to compete with the rise in renewable energy.

BP plc CEO Bob Dudley recently urged the gas industry to work to decarbonize the sector as it has been “vilified” and “demonized” by critics. Many operators are stepping up to work on solutions.

For example, state-owned Qatar Petroleum (QP), which is working to expand its gas production by 43% in 2024 to 110 million metric tons/year (mmty) from 77 mmty, recently commissioned a carbon capture and storage (CCS) plant and aims to capture 5 million tons of emissions from its liquefied natural gas (LNG) facilities by 2025.

QP CEO Saad Sherida Al Kaabi claimed the 2.1 million ton capacity facility would be the region’s largest. He said the gas production expansion is taking into account CCS.

In August, Chevron Corp. began operating a CCS plant off the coast of Australia, with an estimated price tag of $1.7 billion. The project is designed to inject more than 100 million tons of carbon dioxide from its 15.6 mmty Gorgon LNG project into underground reservoirs below Barrow Island, which could reduce greenhouse gas emissions (GHG) by as much as 40%.

Some of the largest global producers in September launched initiatives that include decarbonizing industrial hubs to reduce methane emissions. The Oil and Gas Climate Initiative said it plans to boost large-scale commercial carbon capture, use and storage (CCUS) worldwide to support the United Nations climate accord, aka the Paris Agreement, reached by nearly 200 countries in late 2015.

The initiatives are underway by members BP, Chevron, China National Petroleum Corp., Eni SpA, Equinor SA, ExxonMobil Corp., Occidental Petroleum Corp., Petroleos Mexicanos, Petróleo Brasileiro SA, Spain’s Repsol SA, Saudi Arabia Oil Co., Royal Dutch Shell plc and Total SA.

Challenges facing future gas developments, including LNG projects, include environmental activism as well as pushback from investors and some governments. Gas is facing pushback in part because global emissions continue to rise, according to the International Energy Agency (IEA). Data issued late last year indicated that despite growth in solar and wind resources, “emissions have started to rise again in advanced economies, highlighting the need for deploying all technologies and energy efficiency,” said IEA Executive Director Fatih Birol.

IEA also noted that “switching to natural gas has already helped to limit the rise in global emissions since 2010, alongside the deployment of renewables and nuclear energy and improvements in energy efficiency.”

Longer term solutions are via technology, as experts have pointed out. Industry already is working on solutions via niche products that include carbon-neutral biogases and carbon-neutral synthetic gas, however, “gas more broadly will play its role through carbon capture and hydrogen. And these no longer are niche products,” BP’s Dudley noted. The “biggest obstacle to decarbonized gas is not technical,” the BP chief added. “It's political.”

CCUS techniques also offer opportunities, according to Shearman & Sterling. “For now, however, most existing and potential investors in LNG appear unphased by the risk that fossil fuel activism possess,” it noted.