Speaking at the LNG 18 conference in Perth, Australia, Maarten Wetselaar – the Integrated Gas Director, Royal Dutch Shell – said that the LNG industry can only realise its long-term potential if it comes together to ensure the competitiveness of gas and bring down its cost.
Wetselaar said: “the LNG industry will only fulfil its long-term potential through a concerted and consistent focus on innovation.To make sure that happens, a lot of attention rightly goes into technological innovation. But today that’s not what I want to focus on. Instead I’ll talk about cost innovation and policy innovation.”
Wetselaar went on to say: “Costs need to come down to reassure policy makers and customers that gas is a competitive choice with all other energy sources, as well as being a responsible choice from an environmental perspective.
“Cost innovation must be looked at by the whole supply chain, from engineering contractors to suppliers. That’s why conferences like this are such a great opportunity to have conversations with counterparts.
“There’s too much myopic thinking. Just because things have been done in a certain way, it doesn’t mean the same approach should continue.”
To give an example, Wetselaar looked at Shell’s efforts to reduce the cost of LNG refuelling sites for road transportation in Europe and the US. He said that, by pooling the thinking of LNG engineers, retail engineers, customers and engine manufacturers, the cost of the LNG refuelling site was halved. “They developed effective ways to manage boil-off gas and pressure at various stages of the supply chain. They also implemented creative methods for safely reducing the plot size of the sites, thereby saving costs. This kind of collaboration – which helps competitive and cost effective ways of doing business develop – should be the rule, not the exception.”
Wetselaar said: “With cost innovation, we don’t need to hold out for a once-in-a-generation idea. A big impact will be achieved through incremental improvements in efficiency, minimising bureaucracy, and keeping the conversation going. As the adage goes: how do you save a million dollars? By saving a thousand dollars a thousand times.”
Wetselaar went on to look at innovative policies. He noted that a government-led carbon price would have a significant impact on the industry, saying that: “not only will it lead to the development of technologies that can bring about widespread and permanent reductions in emissions. It will also encourage the switch from coal to natural gas to generate electricity. Ultimately, it’s about looking at the full cost of energy – from environmental to economic factors.”
Wetselaar concluded his speech by saying that: “In today’s debate over what the next game changer is, I’ve argued the importance of cost and policy innovations. But let’s not lose sight of the ‘game-changing’ innovation staring us all in the face – LNG itself.
“Our industry mustn’t be shy about the key role this source of energy should play in the global energy transition. Over the past decade, gas has played an increasingly significant role in meeting global demand for energy and addressing energy poverty. We must ensure this trend continues. That’s the best way of meeting future demand growth with less impact on the environment.
“For gas to achieve its full potential in powering progress in people’s lives and to play a key role in the energy mix, our industry needs to come together to ensure the competitiveness of gas and bring down its cost. And we need to call on governments to recognise the benefits of gas through the policies they make. Let’s work together to make this happen.”Wetselaar's full speech can be read here.
Read the article online at: https://www.lngindustry.com/liquefaction/15042016/shell-integrated-gas-director-delivers-speech-at-lng-18-2292/