We have recently seen very interesting news regarding the development of Natural Gas and its role in our future energy mix. At a first glance, the news may seem contradictive and confusing, but diving into the subject we may see that it all makes sense after all.

This is a list of the news that may combine to indicate a future role of Natural Gas:

You may allready seen where Im heading with this, but bear with me as I ramble on.

First, the Norwegian newspaper DN reported that the consultancy firm McKinsey have confirmed what we all suspect, that in order to reach the Paris agreement we have to reduce the consumption of fossile fuels starting NOW. McKinsey can also very well be accused of breaking down open doors as well as being incoherent as they also claim in their Global gas and LNG outlook that natural gas is the only fossile fuel set to grow after 2035.

DN also write, in the same article that the financial auditor Deloitte made BP reduce their long-term price estimates on oil and natural gas from 2023, as the world is shifting towards renewables. But then, how come Warren Buffet, one of the most revered investors of all times, have just made a 10 billion dollar investment of natural gas infrastructure in the United States? He just dumped airline stocks because the fundamentals in the markets have shifted significantly in their disfavour, but does not see a similar disantvantage for Natural Gas.

In Europe, EU have produced an offensive Hydrogen Strategy aiming for the 2030 and 2050 targets, and in Norway new public tenders for ferries mostly require renewable fuel sources such as hydrogen or electric hydro power charging batteries. Companies focusing on Hydrogen are booming in the stock markets, and hydrogen technology is in high demand. Will this be a killer of MGO and Natural Gas? Elon Musk, the eccentric and brilliant entrepeneur behind PayPal, Tesla, The Boring Company and SpaceX says no. In this interview from 2016 he claims that Fuel Cells and hydrogen are so mind-boggingly stupid that time will surely only bring forth their demise. Now we are in 2020, and the hype is all-time-high, although the actual use of hydrogen is still negligable in the global energy mix. He may still be proven right, although public funding schemes have foiled less bold predictions in the past. Where he does have a point is that for cars, hydrogen have twice the energy-losses compared to electric cars when calculating from original electrical power source to the wheels of the car. In the automotive industry, hydrogen is struggling severely to take market shares, but things may look different for Shipping. Even though new solid state battery technology seem capable of doubling the energy pr weight ratio compared to batteries, we are still far from being able to run Deep Sea or even Short Sea Vessels on batteries charged in ports of call.

This brings us back to natural gas, which can also be used as a source for producing hydrogen. Reinertsen New Energy have made successfull pilots of systems producing “blue” hydrogen, where the intention is to capture the carbon and inject it back into the wells. Equinor are planning to produce massive amounts of hydrogen from natural gas at Mongstad which may be the killer of Liquified Natural Gas, but the natural gas resource will still have value in a emmission-free energy mix.

The H2 molecule is wildly flammable, extremely volatile, self-igniting in air and very hard to transport. It may look like ammonia, although toxic for lungs and aquatic life, could be the only sensible way to transport and store Hydrogen, but this is a topic for another day.

The final question is, when electricity produced by solar, wind, hydro, and perhaps Thorium is so abundant that prices drop severely, will natural gas be able to compete as a resource for producing hydrogen? One thing is certain, Oil&Gas companies can not let their costs run amok, but even with strict cost control, my crystal ball is telling me that producing natural gas will be a marginal business in the future, especially in countries such as Norway where the wells are offshore and very expensive to drill and maintain.