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The role of gas in rapidly urbanising countries

Published on 10th Nov, Edition 45, 2014


While more than half of world’s population lives in cities today, up to three quarters of the population will live in cities by 2050. In Pakistan over 36% of the population resides in urban centres, with over 5 million people moving to cities every year.

This significant urbanisation dynamic will undoubtedly intensify pressure on resources, including food, water and more notably energy. How urban resources are allocated will have a tremendous impact on global sustainability and resource efficiency. City development patterns are key drivers of the future demand for energy and other resources.

As millions prosper and enter a growing middle class, they will begin accessing energy-consuming infrastructure, further accelerating the amounts of energy consumed in cities. But increases in the use of energy will not occur without environmental and health consequences, especially as reliance on fossil fuels will continue and make up about 60% of the total energy mix though 2050.

Renewables like solar will play an increasingly important role in minimising these consequences, in sustainable cities and the global energy mix and could potentially double by 2035 according to Shell’s New Lens Scenarios. Despite the promise of renewable energy and a stabilizing nuclear outlook, fossil fuels will continue to be central to the global energy mix and may represent 60% of the world’s energy mix by 2050 according to the International Energy Agency (IEA).

The cleanest burning fossil fuel, natural gas, can play a crucial role in offering energy supply security as global gas resources are growing and are increasingly geographically diverse. The IEA estimates that there are sufficient technically recoverable natural gas resources to last for at least the next 230 years at current consumption levels. The IEA has predicted a ‘golden age of gas’, in which annual natural gas production increases by 1.8 trillion m3 by 2035 to meet demand.

Natural gas is not only an accessible option, linked to international markets through an expanding network of pipelines and supply chains of liquefied natural gas (LNG), it is also more price competitive compared to other fuels. This is because in Asia, according to the analysts of Energy Intelligence, a gas-fired plant is two times less capital intensive than coal and onshore wind, four times less than nuclear, and seven times less than offshore wind.


And gas becomes increasingly competitive when you consider the full cost of electricity generation. This includes tangible costs of production (plant capital expenditure, feedstock and operations), but also cost of externalities linked to climate change and air pollution caused by burning coal.

In Pakistan, natural gas accounted for 49% of the primary energy supply in 2012. Dry natural gas production has grown by more than 80% over the past decade, from 809 billion cubic feet (Bcf) in 2002 to 1,462 Bcf in 2012. However, according to a report by the Government, Pakistan faced a natural gas shortfall of 912 Bcf in 2013.

Pakistan’s energy demand is expected to grow more than double in the next 15 years to reach 140 mln TOE by 2020-25. With the country having an extensive network (80,000 km’s) of gas pipelines with direct gas connections to the majority of households, natural gas seems to be a natural mid and long term solution. However, with indigenous gas resources dwindling and demand outstripping available supply by 2 BcfD, key decisions on Pakistan’s energy futures need to be made today to ensure security of supply and embed flexibility in the country’s energy system.

Some of these decisions will revolve around developing and growing integrated systems that assimilate power generation with other urban utilities. For example, by assimilating water, sewerage, waste and power management systems the cooling-water demands for power generation and energy demands for water treatment and pumping can be met more efficiently. Smarter city planning that incorporates infrastructure to accommodate distributed natural gas-fired combined heating or cooling with power generation (co-generation) offers not only significant gains in efficiency but also helps to reduce total air pollution and CO2 emissions.

Other decisions will relate to providing Pakistan’s growing number of motorists with cleaner range of fuel and vehicle options. Gas has the potential to provide economic and environmental benefits for operators in large, heavy-duty applications, such as mining, trucks, ships and trains. And while some estimates place 80% of cars of Pakistani roads as CNG3 run, natural gas could fuel much more of the road transport sector by the middle of the century.

As our population grows, careful planning will help achieve a more efficient use of our resources. We are at the brink of embarking on Pakistan’s future of energy, one in which natural gas and LNG ‘ given the right policies and decisions today ‘ could have a significant role to play.

Omar Y. Sheikh,
Managing Director,
Shell Pakistan Limited

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