In today’s energy and commodities markets update, Middle East Energy Team Leader Rakteem Katakey examines the future of gas as major producers increase output. Qatar’s energy minister recently joined executives from Exxon Mobil Corp. and TotalEnergies SE at a forum in Doha, marking the second time in three weeks that these key players discussed the green transition. The main takeaway from the forum was the enduring role of gas in the energy landscape. Despite the International Energy Agency’s projection of a peak in gas demand by the end of this decade, major producers like Qatar, Exxon Mobil, and TotalEnergies anticipate continued reliance on the fuel.
TotalEnergies and similar companies argue that gas is a crucial component of the transition to a lower-carbon world. They highlight that gas emits less carbon than coal or oil and provides a more stable power source compared to intermittent renewable energy sources like wind and solar. While alternative fuels such as hydrogen are seen as future solutions, they currently face high costs, and the expansion of renewable energy infrastructure requires significant investment. This situation supports the continued use of gas. Qatar, a leading supplier of liquefied natural gas (LNG), is investing heavily in new capacity, betting on rising demand. Minister Saad Al-Kaabi stated at the Qatar Economic Forum that the country might increase production further if sufficient gas becomes available.
This confidence is supported by long-term supply contracts with European buyers, binding the continent to fossil fuels beyond 2050. These agreements have raised concerns due to their environmental impact. While gas emits less carbon dioxide than coal, methane leaks in the LNG supply chain can worsen its environmental footprint. As global calls to reduce reliance on fossil fuels grow, resource-rich nations are diversifying their energy portfolios. Saudi Arabia is incorporating renewables and carbon capture, and Qatari Finance Minister Ali Al Kuwari mentioned similar efforts in Qatar. However, he acknowledged that the country’s LNG expansion complicates these diversification efforts, reflecting the broader acceptance that gas will remain a significant energy source for the foreseeable future.
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