Where does gas fit in our low carbon future? In an ever shrinking corner | RenewEconomy

Where does gas fit in our low carbon future? In an ever shrinking corner

We won’t completely shift from gas soon, but the amount of gas we need will decline. And the smarter, more innovative and more productive we are, the faster demand for gas will decline.

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Image credit: AAP Photo/Michael Sohn)

The debate about how gas fits into our transition to a zero carbon economy has been unnecessarily polarised. It’s not about ‘all or nothing’.

I’m not aware of anyone proposing we should shut down all our gas use tomorrow. On the other hand, it is financially risky to invest more in expanding gas supply, given the obvious need to cut emissions as fast as possible, and the global gas glut.

Maybe a key question to ask is ‘how much gas do we need to underpin our path to transition?’ Opinions differ.

On one hand, climate scientists are increasingly terrified by the impacts of ongoing global heating.

And people like me see very substantial potential to rapidly reduce gas demand by improving efficiency of gas use from the present appallingly inefficient level, and switching to high efficiency modular renewable electric technologies that underpin industrial innovation and productivity improvement.

On the other hand, the gas industry wants to keep growing. And to protect the value of its sunk capital in gas production, pipelines and LNG production assets. Many politicians and energy analysts believe energy growth must continue.

They do not understand our 21st century economy, where virtual service solutions replace physical assets and the disruptors themselves are disrupted by unprecedented innovation. But they are powerful, and blood will be spilt. There will be winners and losers. That’s capitalism.

As AEMO’s modelling has shown, we won’t completely shift from gas soon, but the amount of gas we need will decline. And the smarter, more innovative and more productive we are, the faster demand for gas will decline.

Climate concerns are driving investor behaviour, as they must respond to consumer sentiment, not the resources industry or politicians.

We come back to a fundamental reality: no-one actually wants energy – or specific technologies. Consumers and businesses (apart from the resource industries) want services they value, and if someone comes up with a new way of giving them what they want, they will shift quickly.

Owners of physical assets will be followers, not leaders in the transition. Video stores, big shops and many other business models are seeing change. The horse and buggy industry saw change. The fossil fuel industry faces a similar fate.

Thanks for your past contribution to economic and social development, but we are moving on: loyalty is a rare commodity in the real world. And even enormous political and economic power has its limits.

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