International Gas Union The Gas Day International Gas Union Global Vision for Gas: Path for the Sustainable Energy Future Ksenia Gladkova Advisor to Secretary General International Gas Union 10th Russian Petroleum & Gas Congress Moscow, June 2012

Natural Gas – the fuel with a voice! Worldwide non–profit organisation established in 1931 Promotes political, technical and economic progress of the gas industry Emphasising sound environmental performance worldwide Increased focus on strategic, policy issues and gas advocacy The most influential, effective and independant NGO, serving as the spokesperson for the gas industry worldwide The IGU is a worldwide non-profit organisation established in 1931, registered in Vevey, Switzerland with the present Secretariat team currently located in Oslo, Norway. With the vision of being the most influential, effective and independent non-profit organisation, the IGU is serving as THE spokesperson for the gas industry worldwide.   The IGU is vigorously promoting the political, technical and economic progress of the gas industry with the mission to advocate for gas as an integral part of a sustainable global energy system going forward. In recent years, the IGU’s rising focus on strategic and policy issues has increased further cooperation with multilateral agencies such as United Nations (UN), International Energy Forum (IEF), International Energy Agency (IEA) towards reaching the global consensus on policy issues including climate issues, geopolitics, energy poverty eradication and human capital.

IGU membership 79 Charter Members 38 Associate members The IGU is a worldwide non-profit organisation established in 1931, registered in Vevey, Switzerland with the present Secretariat team currently located in Oslo, Norway. With the vision of being the most influential, effective and independent non-profit organisation, the IGU is serving as THE spokesperson for the gas industry worldwide.   The IGU is vigorously promoting the political, technical and economic progress of the gas industry with the mission to advocate for gas as an integral part of a sustainable global energy system going forward. In recent years, the IGU’s rising focus on strategic and policy issues has increased further cooperation with multilateral agencies such as United Nations (UN), International Energy Forum (IEF), International Energy Agency (IEA) towards reaching the global consensus on policy issues including climate issues, geopolitics, energy poverty eradication and human capital. 79 Charter Members 38 Associate members

The biggest driver of energy demand: the human desire to Global issues The biggest driver of energy demand: the human desire to sustain and improve the well-being People need improving access to: Food Water Employement 1,7 billion w/o electricity Energy security Climate change

Source: IEA, The Golden Age of Gas, 2011 (the GAS scenario) Growing enegery demand – need for all energy sources available 1 Mtoe = ca. 11.63 TWh 1980: ca. 14.000 Twh bzw. Grob 1.400 bcm 2010: ca. 29.000 TWh bzw. Grob 2.900 bcm 2035: ca. 48.000 TWh bzw. Grob 4.800 bcm => Natural gas would then account for ca. 25 % of the global energy mix in 2035 (from 21 % in 2008) Source: IEA, The Golden Age of Gas, 2011 (the GAS scenario) 5

Need a realistic approach The Energy Challenge More Cleaner Affordable Reliable Safe Impact of Fukushima Need a realistic approach

Natural gas is a fuel very well-suited to meet energy challenges A Global Vision for Gas Natural gas is a fuel very well-suited to meet energy challenges Growing availability Attractive for urban living Gas in power generation is a proven, low carbon option Highly cost competitive Major generator of employment across the globe The technologies are proven Natural gas is a fuel very well-suited to meet these challenges The growing availability of conventional and unconventional natural gas provides a natural resource stock to see the world well beyond 2050. Natural gas is an enabler of economic development. The clean properties of natural gas make it attractive for urban living. Gas in power generation is a low carbon option with excellent complementarity with intermittent renewable power. And its lower carbon content—relative to the other fossil fuels—makes it a useful tool to address climate change. Natural gas is a highly cost competitive form of low carbon energy and hence an affordable source of electricity, while as a form of heat it continues to be priced below the alternative of oil. As such it requires less or no subsidies to foster its commercial use. The technologies associated with natural gas are proven and therefore involve less risk than many alternatives. The single biggest advantage of natural gas may be its adaptability Gas-fired generation can transition in a variety of directions: Capture carbon through retrofit technology, as a partnership role with intermittent sources of renewable power generation or to a greater inclusion of carbon-neutral biogas. The choice of pathway or the balance between these options remains open and can be adjusted according to the technological progress of each alternative. For this reason, natural gas is sometimes called a ‘zero regrets option’.

A Global Vision for Gas - followed The ‘Global Vision for Gas’ lays out a clear pathway towards a sustainable energy future. There is a strong need for a portfolio approach in energy: Reductions in energy use Enhanced energy efficiency Expanded use of zero carbon technologies Greater resort to clean-burning natural gas. The ‘Global Vision for Gas’ lays out a clear pathway towards a sustainable energy future. A future of improved air quality and public health, affordable energy, available resources, and sharply reduced greenhouse gas emissions. There is a strong need for a portfolio approach in energy, calling upon: Reductions in energy use Enhanced energy efficiency Expanded use of zero carbon technologies Greater resort to clean-burning natural gas. Immediate wider deployment of natural gas would be based on proven technologies available today Policymakers need to recognize the critical role that natural gas has to play alongside other low carbon options, and facilitate the appropriate policy enablers as befits each region based on its particular circumstances. This portfolio approach that includes a major role for natural gas will likely cost less than opting for an all renewable supply route in power generation Inclusion of natural gas could help the affordability of the parallel adoption of new zero carbon (or near zero carbon) technologies The significant number of jobs associated with natural gas—both directly and indirectly--is highlighted and its contribution to economic growth. Policymakers need to recognize the critical role that natural gas plays alongside other low-carbon options, and facilitate the appropriate policy enablers

Global Emissions Reductions by Abatement Method Three ways exist to bring down emissions from the base case. Reduce overall primary energy demand either through lower final consumption or through more efficient production and conversion of energy Replace higher carbon emitting fuels with lower, or near, zero carbon forms of energy Install carbon capture technologies where fossil fuels are burned The Vision Pathway analyses the impact of a range of carbon abatement methods using gas to reduce emissions Coal-to-Gas Substitution. Replacement of coal with gas-fired capacity in power and heat generation, assumed to take place when the coal-fired station reaches 25 years of operations Oil-to-Gas Substitution. Replacement of oil with gas-fired capacity in power and heat generation at the end of the oil-fired station’s useful life. Liquefied Natural Gas substituting for oil as a fuel in shipping and heavy goods vehicles. Natural Gas Vehicles replacing Internal Combustion Engine light duty vehicles. Gas substituting for oil in end-use sectors, particularly residential use but also industrial applications. Some residual oil use is assumed to remain, particularly as a feedstock. Biogas Widespread development and production of biogas Carbon Capture and Use Using carbon capture to further reduce emissions from natural gas combustion. Reducing Demand. Accelerating efficiency improvements in end-user segments, including building insulation, boiler efficiencies, industrial applications, replacing older inefficient gas-fired power generation with modern CCGT, improving internal combustion engine vehicle efficiency, reducing transmission and distribution losses, and behavioural change including reduction in passenger miles travelled. Oil Substitution in Transport. Replacement of combustion engine light duty vehicles with electric vehicles, both plug-in-hybrid and battery Renewables and Nuclear. Step change in the use of renewables in power generation, supplemented with increased nuclear capacity.

Natural gas is a clean-burning and low carbon fuel Natural gas can contribute to better air quality and to mitigating climate change Natural gas is a clean-burning and low carbon fuel Carbon Dioxide Emitted During Electricity Generation by Fuel* NOx and SOx Content by Fuel In terms of carbon dioxide, natural gas typically has 40 percent less carbon content than coal, and 25 percent less carbon content than oil. But the gains from switching are often more substantial because of the high efficiency of natural gas notably for power generation purposes. To generate a fixed amount of power a best-in-class combined-cycle gas turbines (CCGT) will emit 60 percent less CO2 than a coal-fired plant. The emissions of NOx from natural gas are typically 63 percent less than from oil and at least 60 percent less than for coal. The emissions of SOx from natural gas are almost negligible, and so are particulates. These local pollutants are particularly important with growing urbanisation and the need to control smog levels in cities. The improvement in health, and associated cost savings in health care, are significant. Natural gas can be the tool toward cleaner air and less noise in cities through two distinct paths, either the direct use of natural gas in vehicles or reducing tailpipe emissions. Ad *: Power generation efficiencies assumed: Natural gas 55%, crude oil 37%, coal 39% 10

You Can’t simply Turn on the Sun and the Wind Natural gas can enable renewable energy An energy alternative is needed to outpace fast growth of energy demand. Natural gas can be such alternative. Gas is complementary to intermittent renewables. In EU, natural gas is vital to “help” renewables to meet the 2050 reduction ambitions. The perfect match! You Can’t simply Turn on the Sun and the Wind

Unconventional Gas Development Game changer in North America But it is the only place with actual production Europe: very preliminary exploration High variability of resources estimates LT supply may come from outside the US The impact may be significant in Europe post-2020 Conventional The total long-term recoverable gas resource base is more than 850 tcm, only 66 tcm has already been produced IEA-WEO2009 – Some 250 years at today’s consumption - Shell – Currently main impact in US Unconventional Volume Recoverable gas resources for 250 years IEA-WEO2009 12

Nigeria-possible supply Algeria-current supply Gas Supply to EU in 2015 Russia plans massive investments in export pipelines towards EU to foster security of supply Norway Production . Norway) 325 Russia Nigeria (LNG) Trinidad (LNG) Azerbaijan Iran (, LNG) Nigeria-possible supply Algeria-current supply Algeria (LNG) Qatar Oman (LNG) Libya (LNG) Egypt (LNG) -

Russian Gas Supply EU Gas Demand/Supply, Bcma EU and Russia need each other to achieve a sustainable energy security Russia needs demand security to develop its reserves New imports Contracted Imports Contracted imports EU and Norway production EU and Norway production

Triennial Work Programme 2012-2015 “Growing together towards a friendly planet”

Networking - Knowledge - Dialogue IGU is creating arenas for.... Networking - Knowledge - Dialogue Co-sponsor of LNG Conferences LNG 17 in Houston, USA, April 2013 The IGU Research Conference IGRC 2014 in Copenhagen, Denmark, October 2014 The IGU World Gas Conference Paris 2015

Download possible from: Global Vision for Gas: The Pathway towards a Sustainable Energy Future Download possible from: http://www.igu.org 17

Wide range of information available Different slide packages & reports: Natural Gas: Facts & Figures Markets for gas Natural gas resources, supply & transport Environmental impact Prospects for developments of further technological options Slide package on advocacy Report on Gas and Climate Change Mitigation Report on environmental issues surrounding shale gas production, based on US experience Overview summarising basic information and environmental concerns related to shale gas, based on US experience Selected Publications: IGU Guiding Principles for Sustainable Development Natural Gas – Part of the Solution to Global Climate Change Natural Gas Unlocking the Low-Carbon Future The Role of Natural Gas in a Sustainable Energy Market (with Eurogas) Guidebook to Gas Interchangeability and Gas Quality (with BP) www.igu.org/gas-advocacy

New logo from June 2012!

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IGU message on natural gas Natural gas CARES for the world Clean C Affordable A Reliable R Efficient E Secure S Modern gas-fired plants have a capital cost that is half that of coal, one-third the cost of nuclear and one-fifth the cost of onshore wind. Natural gas is the affordable choice. Natural gas does not require subsidies. Unlike renewable technologies which must be heavily subsidized by governments, natural gas use allows countries to affordably reduce their emissions. Natural gas is available now. Gas is readily available from a variety of sources, both pipeline and LNG. The environmental benefits of gas can be realised immediately. Gas can serve as a flexible partner in power generation for intermittent energy sources like wind and solar, facilitating the phase-in of renewables. Natural gas is versatile. Natural gas produces less nitrogen oxide than coal, and more than 50% less CO2. Gas produces no sulphur and no solid waste. Natural gas is clean. Natural gas vehicles can improve air quality and energy efficiency in large cities. Natural gas promotes sustainable transport. Modern gas-fired power plants are 40% more efficient than coal plants. Natural gas is efficient. Natural gas saves time. Gas-fired plants require less construction time than nuclear or coal plants. Natural gas is abundant. Global production will increase over the next 20 years, with growing supplies from conventional, unconventional, frontier and LNG resources. Natural gas is safe. The natural gas sector has the best safety record in the industry. In the pathway to a sustainable energy future, natural gas is more than a bridge, it is a destination fuel!