A changing energy compass in the Middle East
Nov 9, 2016
Writing in The National newspaper, Shell CEO Ben van Beurden looks at the role of gas in the Middle East’s energy future.
If inspiration for the future lies in past achievements, the Middle East should never feel short of ideas and the will to succeed. Through history it has excelled in the fields of art, learning, science and medicine. It has also, of course, supplied much of the oil and gas that has helped shape the global economy.
Such inspiration should help the region tackle the challenges it faces today. A rapid rise in population and, at times, surging economic growth bringing better living standards for many have sparked greater demand for energy. Across the Middle East, energy consumption is set to double by 2050, according to the World Energy Council.
Yet in some parts of the region many still have no access to energy at all. Governments trying to spur economic development that will help their people prosper must find ways to provide access to affordable energy.
That in turn raises the question: how can this be done while reducing emissions of the greenhouse gases that contribute to climate change? If efforts to reduce global carbon emissions fall short, water-scarce areas could become hotter and drier, and communities living in coastal areas could be affected by rising sea levels.
So the Middle East has much to gain from playing its part in a successful transition to a lower-carbon world. Renewable sources, such as solar and wind, are rapidly gaining ground globally, and will play an increasingly essential role in the transition. In the United Arab Emirates the renewable energy company Masdar is helping to drive the development and deployment of clean energy. Countries across the region, including the UAE, are already moving to develop solar power plants in particular.
Renewable energy will take a long time to reach the scale needed, and it can only do so much. Solar and wind energy produce electricity, which accounts for less than one-fifth of all energy consumed worldwide. Wider electrification of the energy system is needed, including in transport and other major industrial sectors, for renewables to realise more of their potential.
There is another solution close to hand. The Middle East has abundant, untapped resources of natural gas. When burnt for power, natural gas produces less carbon dioxide and less local air pollution than other hydrocarbons. Much of the gas found in the region is of a type which requires significantly more processing than is common elsewhere. But with the right technology and expertise in place, these resources can help extend the region’s energy security, and improve air quality.
Natural gas is an ideal partner for renewable energy to ensure a steady supply of electricity, as demonstrated by Masdar’s 100 megawatt Shams 1 solar power plant in Abu Dhabi. Combining gas and solar offers the benefit of cleaner energy with the advantage of a gas-fired power plant to provide backup.
Shipments of liquefied natural gas, or LNG, are increasingly common across the region, helping countries to bridge short-term gaps in supply and offering longer-term energy security. And although still in its infancy as a transport fuel, cleaner-burning LNG also has the potential to replace diesel in trucks and marine fuel for shipping.
Shell has been operating in the Middle East for many decades. We are keen to play a key part in its future. In developing oil and gas resources in this region, we have worked closely with partners to overcome the technical challenges that exist.
For instance, we are a partner in Petroleum Development Oman, which has boosted oil production from declining fields by around 30 per cent in the last ten years using increasingly sophisticated techniques. Today PDO is involved in a project called Miraah, which uses solar energy – in place of natural gas – to generate steam for injection into the field and ease the flow of the oil. The project’s first phase is expected to be complete next year and when fully operational, it will cut carbon dioxide emissions by more than 300,000 tonnes a year. The gas saved will fuel local power production or domestic industry.
Making savings and creating value is crucial. In Iraq, we are a partner in the Basrah Gas Company, which captures natural gas produced with oil from three major oilfields. This valuable resource used to be burned, or flared. It now provides 70 per cent of the electricity needed in Basrah and its surrounding areas.
Developing and freeing up more of the region’s natural gas resources will require technical expertise, investment and collaboration. But the effort will be worth it. Greater use of natural gas can help meet the Middle East’s rising demand for energy, while smoothing the transition to a lower-carbon world.