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Plotting the path through the energy transition

Published by , Senior Editor
Hydrocarbon Engineering,

The current COVID-19 crisis is a game changer for everyone and that includes the energy sector. Moving forwards, we can never talk about business as usual; we are not going to go back to what we had six months ago, the world is a different place. The economy is different, people's perception of health is different. The virus is going to be with us for quite a while to come and people will behave differently.

This will clearly influence the pace and manner of the energy transition. All the available fuels need to reassess their position, and this provides Liquefied Petroleum Gas (LPG) an opportunity to flourish. As a portable, low-emissions fuel it can have a big impact on both air quality and carbon emissions and is readily available at a reasonable price.

Increased climate awareness

Last year witnessed a surge in climate awareness, with protests around the world reflecting the growing concern around climate change, backed up by stark warnings from scientific advisors. Across Europe, politicians are reacting with the UK and France signing historic net zero emission targets into law and other European countries and the EU itself moving in this direction. It is not just government, but city leaders reacting too, not just to greenhouse gases (GHG) but to air pollution with major cities from Madrid to Amsterdam and Paris developing low-emission zones to improve air quality.

Air quality is one of the most pressing public health concerns of the 21st century and is a significant driver of energy policy. The increased focus on air pollution seen in recent years can be attributed to heightened awareness and greater public pressure on political bodies to tackle this urgent, often fatal issue. Last year, the World Health Organization (WHO) statistics revealed that not only are over 90% of the world’s population breathing air that exceeds WHO recommended limits, but an estimated 7 million deaths a year can be attributed to that pollution. Of these deaths, around 90% occur in low- and middle-income countries.

Despite the ambition, so much of our economic activity and productivity around the globe still depends on the availability and exploitation of reasonably priced energy. Whilst moving away from fossil fuels is inevitable, the pace and direction of this change is a significant challenge for organisations operating at the sharp end of the economy. It could of course also provide opportunity.

A journey to decarbonisation

Progressing from where we are now to where we want to be is going to be a journey, and the speed that we travel along that route will determine the fuel strategy. Whatever way you look at it, natural gas and LPG should have a contribution to the move to a low carbon world in a practical and pragmatic manner; for the energy transition must be a pragmatic one which does not leave people behind. It cannot be a strategy where if you are living in the cities, you have access to green, renewable electricity, but if you live in rural areas there is no alternative other than to use coal, kerosene, diesel or biomass. There must be an acceptance of the role for cleaner fossil fuels.

The energy transition means moving from one state to a new state and I think it is true and fair to say that whatever appliances we use, whether it is a boiler, car or a stove, they will be different to the ones we use now. How long that transition will take is not yet apparent, but it can be accelerated by switching to gas. Take a boiler. Moving from an oil-fired boiler to a gas-fired boiler will deliver lower emissions for heating. That can be achieved at a far lower cost than switching to a boiler fuelled by electricity or a heat pump system. Here there is a trade-off but, in the post COVID-19 economy, where governments will critically assess the cost benefit of the emissions reductions that they are putting in place, a pragmatic switch to LPG is an ideal option.

A quick win by moving to gas from oil is a practical step that we should be taking in the short term to improve our climate and our air quality, as part of a transition to a future world that should be zero carbon. Given the current global financial situation, the transition may take a little bit longer than we were hoping for and given the level of public debt, it must be cost effective.

Making a big impact

There are multiple strands to LPG’s contribution to the decarbonisation agenda including domestic use, transportation, process heating, industry and agriculture. Many studies show the extensive morbidity and mortality associated with poor air quality and as populations and car usage grow, this is only going to be exacerbated. The busier that towns and cities become, irrespective of infrastructural changes and road building, congestion will worsen. Whilst many countries are pursuing an electrification pathway for domestic needs and consumer vehicles, the infrastructural support required, and battery restrictions associated with EVs render them largely inappropriate for heavy and medium goods vehicles. LPG offers a lower particulate matter and GHG alternative to petrol and diesel that is well suited to such vehicle types and elicits both environmental and financial benefits.

As well as being essential to the effective decarbonisation of transportation fleets, LPG can also play a role within the domestic sphere, offering a lower carbon fuel for household heating and cooking. This is particularly true of off-grid households often in rural areas which may be reliant on costly electrical heating, highly polluting oil or biomass boilers.

Another area of opportunity lies in industry, where there is an urgent need to decarbonise. In 2017, the industrial and commercial sectors accounted for 44% of total energy consumption in the US and produced over 5000 million t of CO2 (MtC02). Tackling the emissions produced by these sectors would make substantial inroads in reducing emissions and, without a shift in the types of fuels industry and commerce are utilising, it is unlikely that any carbon or GHG reduction targets will be met.

Next generation LPG

LPG has traditionally been a co-product of the oil and gas industry and a large proportion of the product still comes from oil and gas sector with over 62% at present coming from natural gas processing and production. As we look to the future there is a third or perhaps even a fourth area of LPG production. In fact, in the future it will probably be inaccurate to call it LPG, because LPG is a petroleum product. We believe that the next generation of propane and butane, which are the gases that make up LPG, can come from renewable and bio sources, such as waste oils, animal fats or cellulose sources, such as wood.

This bioLPG will make up a large proportion of our future demand. Significant volumes of bioLPG can be produced as a by-product of fuels such as bio-kerosene or biodiesel When we look at the production forecasts of biodiesel and, in the future, bio-kerosene, we are confident that there will be a significant future supply of bioLPG.

BioLPG production has been growing rapidly over recent years. Currently the fuel is predominantly produced from hydrotreated bio-oils in refineries. However, bioLPG can be produced in several ways and through numerous processes, such as gasification and pyrolysis - which are already proven technologies, and from various feedstocks including agricultural residues and municipal waste.

The final strand of this approach which is beyond a biofuel is renewable LPG or renewable propane. An example of this would be to use green, renewable hydrogen combined with sequestered CO2 from industrial flue gas, or even directly from the air. With this we can synthesise short chain hydrocarbons including propane. This is a truly circular solution. When you burn it, you recapture the CO2 and create new sources of fuel. This is only in the R&D stage now and at present the cost of renewable green hydrogen is high, but perhaps in the future as we move towards a green hydrogen-based economy it will be increasingly viable.

Prospects for LPG in this decarbonisation era

As the global community intensifies its desire to combat the effects of climate change and seek ways to reduce GHG emissions, LPG can offer significant near-term solutions. LPG is not only among the most attractive options for reducing GHG emissions, it is abundantly available today in many parts of the world through existing distribution channels. In the post COVID-19 world rather than the dash back to oil, which many people foresee, we need to think about gas as an intermediate option. Switching to LPG can help to immediately improve air quality and reduce GHG emissions in many applications and parts of the world. When combined with other environmental cost, and performance advantages, LPG is an ideal clean energy for a low-carbon world.

Written by James Rockall, CEO and Managing Director, WLPGA.

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