Green debate encroaches on natural gas industry meeting in Paris

FRANKFURT (Bloomberg) - For years, Europe’s top natural gas conferences focused on the boom in deliveries of the cleanest fossil fuel. Now, the gathering is starting to consider the risks piling up from the green movement.

With most European Union governments working to phase out coal, gas is the next target in the effort to rein in emissions that cause global warming.

Some 300 executives, bankers and policy makers gathered in Paris this week for the European Annual Gas Conference. A half day was spent on measuring the industry’s carbon footprint. A protest that interrupted the event for more than three hours, punctuating the unease that some of the delegates felt about the industry’s future.

Following is a collection of some of their views:

The development banker:

“We still believe gas can be the transition fuel, but things are getting more and more difficult. If we consider financing a project that has a life of 30 or 40 years, we ask ourselves if it will still be resilient to the new policies of the future. The financial world is starting to look at this problem. Gas companies need to strengthen their arguments that they manage their environmental liability. Why financing a new gas-fired power plant instead of a wind farm? We might do it if the gas plant is designed in a way that it can be carbon neutral in the future.”

--Cristian Carraretto, associate director of sustainable resource investments at the European Bank of Reconstruction & Development

The institutional investor:

“Energy companies usually invest in renewables, trying to balance some of their fossil fuels portfolio. Then they think we will stop hating them. That is not how it works. You need to show us that your capital expenditure standard is consistent with the Paris climate accord. Our industry wants your industry to show us you are really engaging with emissions and what you are doing to reduce it, until you make it zero.”

-- Nick Stansbury, fund manager global equity team at Legal & General Investment Management.

The commercial banker:

“LNG plays a critical role in the energy transition. It has helped in the shift away from coal, in the replacement of the declining European gas production and in diversification.”

-- Laura Monroe-Singer, managing director of energy advisory and finance at Societe Generale SA, in a presentation during the conference.

The policy maker:

“Germany has forgotten gas in this energy transition plan, and we have learned our lessons. We don’t love gas, but we are realistic natural gas has to be part of energy transition in Germany, not only in the electricity sector. We will need natural gas in the next decade to come, but after 2030, we will need more and more synthetic gases, including hydrogen, which will replace natural gas.”

-- Stefan Rolle, a senior adviser at Germany’s Economy & Energy Ministry.

The company executives:

“We need good policy for hydrogen. We need to think about the 2030 picture politicians are opened for debate. How much renewables would be need in Germany to replace only 10% of gas? You would have to double the offshore wind capacity and it is getting hard to get more projects done. So lets not close our eyes for the need of gases.”

-- Gregor Pett, vice president market solutions at the German utility Uniper SE

“Let’s be realistic, we all need to go to work. Russia has chosen gas as the key element of decarbonization.”

-- Elena Burmistrova, chief executive officer of Gazprom PJSC‘s export unit, the Russian company that’s the world’s biggest gas supplier.

The environmentalist:

“Some companies have those empty speeches about decarbonization and don’t really do anything to measure and reduce emissions, believing that natural gas demand will still be there anyways. Some are even bullish, showing revenue will keep coming without them doing anything. The gas markets are not yet designed for sustainability. The European Union needs to give a clear signal that these companies’ profitability will be challenged unless they do something.”

-- Poppy Kalesi, policy director of oil and gas in Europe at the Environmental Defense Fund.