Narratives for Natural Gas in a Decarbonising European Energy Market

The advocacy narrative of the European Union gas community which focused on coal to gas switching and backing up renewables has failed to convince governments, NGOs and media commentators that it can achieve post-2030 decarbonisation targets. The gas community therefore needs to develop decarbonisation narratives, showing how it will develop commercial scale projects for biogas, biomethane, and hydrogen from power to gas (electrolysis) and reformed methane. COP21 carbon targets require an accelerating decline in EU methane demand starting around 2030. In 2050, the maximum projected availability of renewable gas is equivalent to 25 per cent of current EU gas demand. Maintaining current demand levels will therefore require very substantial volumes of hydrogen from reformed methane with carbon capture and storage (CCS). Pipeline gas and LNG suppliers will need to progressively decarbonise their product if it is to remain saleable in Europe. However, networks face an existential threat unless they can maintain existing throughput while simultaneously adapting to a decarbonised product. Significant threats and challenges to these narratives include: short term geopolitical concerns stemming from dependence on Russian gas, ‘hydrocarbon rejectionism’, and an inability of companies to invest for a post-2030 decarbonised future. Governments will need to shift current policy and regulatory frameworks from competition to decarbonisation which will require a ‘regulatory revolution’. In addition to government funding and regulatory support, there will need to be very substantial corporate investment in projects for which there is currently no business case. Failure of the gas community to create and deliver credible decarbonisation narratives is likely to result in the adoption of electrification rather than gas decarbonisation options.