European gas giants call for carbon pricing and more natural gas generation 

In a letter sent to the Financial Times, the heads of six large European gas suppliers have called for action on climate change – highlighting the role that gas can play in addressing environmental issues.

Ahead of an upcoming climate change summit in Paris this December, industry giants including the heads of BP and Shell have made a rare plea for action. Top of their list of recommendations to world leaders is making natural gas an important part of any plans to tackle global warming.

The publicly printed letter marks a change in strategy for the six gas and oil firms, who previously have been known to conduct negotiations behind the scenes.

Their request is urgent and direct. Part of the letter reads as follows:

“As a group of business people, we are united in our concern about the challenge – and the threat – posed by climate change. We urge governments to take decisive action at December’s UN Summit. We are also united in believing such action should recognise the vital roles of natural gas and carbon pricing in helping to meet the world’s demand for energy more sustainably.”

After expressing concern about the challenge posed by climate change, the letter urges leaders to consider turning their backs on coal fired power. They set out an intermediary vision for the future, in which coal is an obsolete fuel.

They argue for a system of ‘carbon pricing’ which is favoured by economists. Under a carbon pricing system, more polluting fuels are penalised with higher taxes.

They also suggest that one of the fastest and quickest ways of bringing down our carbon exposure is replacing coal with natural gas.

Using natural gas to combat climate change

The letter urges governments to consider natural gas to address the pressing climate problem.

“For natural gas, the case is simple: when burned to make electricity, it typically generates around half the carbon emissions of coal. In addition, gas can… continue to improve the storage of electricity produced by intermittent solar or wind.”

Sceptics will be quick to point out that selling natural gas is a large source of revenue for these companies. But the letter does argue that, while renewables have an increasing role to play, the need to cut emissions is so important that all ‘lower-carbon’ options must be explored simultaneously. It also suggests that renewable energy technology perhaps isn’t ready to take on such a large burden.

They also conclude by arguing that they are not seeking “special treatment for any resource, including natural gas.” But rather they are seeking an outcome of the talks which leads to “widespread carbon pricing in all countries.”

The need for a more solid, cleaner supply of energy is becoming clearer and clearer. Earlier this month a story broke about the growth of highly polluting ‘diesel farms’, which generate electricity from rows upon rows of diesel generators during periods of peak energy demand.

What does this mean for gas prices?

Should the UN conference respond to these claims from the industry giants, we can be fairly sure that the demand for natural gas is going to increase. This means that, if everything else stays the same, businesses and consumers should expect to be paying higher prices for their gas in the months and years to come.

To further discuss how this might affect your business speak to one of our experts today – call 0800 157 7175.