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'Triple A' Argument for Gas Demand Growth, Says Shell Exec

Natural gas is well on its way to supplying 20% of global energy demand by 2020, a Royal Dutch Shell plc executive said Monday.

Malcolm Brinded, who directs Shell's upstream division, was keynote speaker at the Gastech 2011 Conference and Exhibition in the Netherlands. He told the audience that a global shift to gas from other types of fuel sources would result in total savings of around US$711 billion to 2030. From 2030 to 2050 savings would increase to US$1.42 trillion.

In looking across the energy supply spectrum, gas has a "triple A argument" to become the global go-to fuel, said Brinded.

"The world can and must count on natural gas to ensure the security of energy supplies, to help meet emissions reduction goals and for its value for money," he said. A worldwide acceptance of gas already was under way, but the shift may accelerate now because of the nuclear crisis in Japan that resulted from a devastating earthquake and tsunami.

Last week Shell CEO Peter Voser said the company was on track to grow by almost 12% from 2010 levels over the coming three years, in part because of North American onshore gas (see Daily GPI, March 17).

Gas will become more viable because the world faces "three hard truths" to 2050, said Brinded.

The first hard truth: global energy demand will increase "significantly to the middle of this century," Brinded said. Second, "whatever anyone might wish, hydrocarbons will continue as the most important source of energy to 2050 and beyond." Third, "climate stress will increase as population grows."

Although "no silver bullets exist" to solve the growth in world demand, "the closest thing" to a solution is for gas to displace coal in power generation over the next two decades, he said.

"In saying this I realize I am preaching to the converted," he said to the energy industry audience. But he noted that the delegates together should be challenged to convince legislators, regulators, power generators, nongovernmental organizations and consumers that by using more gas, "we have got this right."

How does the industry convince the unconvinced? The energy industry, said Brinded, has to shoot down the three big "gas myths" -- that gas is not secure enough, that it's only a bridging fuel and that it's not competitive with other fuels.

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