Those who dream of a full-throttle future

Those who dream of a full-throttle future

Full throttle: it is not the synthesis of the growth rate of renewable energies, but the precise description of the next energy future. Or at least the signal arrived from Gastech 2022, a fair that Attilio Fontana, president of the Lombardy Region, correctly described as “a conference that has never been as relevant as it is today”. Between 5 and 7 September, in the record week of gas prices and European price cap choices, the 50th edition of the most important trade fair in the world on the most sought-after energy source in the European Union was celebrated in Milan after the decision of Russian President Vladimir Putin to cut off supplies.

Over 750 exhibiting companies, 180 managing directors, 20 energy ministers and about 40 thousand professionals attended the event that every year brings together the largest companies on the planet engaged in the gas and oil business: from extraction to transformation and transportation, from investment funds to high-tech companies. Well-known companies such as Eni, Shell, BP or Exxon, together with lesser known names to the general public such as ConocoPhilips, Baker Hughes, Tellurian, Sonatrach but which in some cases are even richer and more powerful.

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Images of Gastech 2022 inaugural conference on September 5th in Milan

Sustainability and gas: a paradox for the net zero economy Despite the importance of business and the large participation of institutions and corporations, Gastech is a little-known event for the layman. And it does not seem to aspire to become more so, judging by a widespread lack of interest in relating to media that are not "partners". But the history with a capital "S" that has passed through Ukraine in recent months has turned on a huge spotlight on every appointment where we talk about energy and above all, given the energy source that is now missing from Russia, on the annual Gastech appointment . Walking through pavilions 11, 13 and 15 of the Fiera di Rho, the company slogans printed in many stands stand out, recalling climbing plants, forests, sun, sea on green and blue backgrounds that praise sustainability: sustainable shipping, projects with purpose, the human energy company, better future, best value, generating greener future, build a better world, energy for sustainable life.

A truly positive sign from the perspective of carbon zero projects announced by the largest companies in the world, in line with the sustainable development goals. The principles of sustainable development and “green” aspirations stand out in many corporate claims, but in this edition of Gastech, when it really comes to business, everyone only thinks of three letters: LNG (liquefied natural gas).

This is the paradox that cloaks the Rho fair. It starts from an assumption: liquefied natural gas is regarded as the cleanest fossil fuel. And as stated during the opening day of the event by Manlio Di Stefano, Undersecretary of State at the Ministry of Foreign Affairs, “gas plays a key role in the green transition, ensuring a low-carbon energy supply”. The point is that it is always a non-renewable energy source. Just three years ago, the NGO Global Energy Monitor published a report, taken up by The Guardian, on how the boom in the LNG industry would have played at least as much a role as that of new investments in coal in causing a climate crisis, if all planned projects had been carried out.

Thirty-six months later the picture has drastically changed and from Gastech it emerges that investments in new natural gas extraction projects will increase in the coming years. The reason is clear: the demand for gas has exploded in the Old Continent with the crisis in Ukraine. It is therefore clear that, despite the good intentions expressed in corporate communication, the prospects for zero-impact economies are becoming more gray, clouded by the increased profitability of this fossil resource. Against some of the slogans mentioned above, the Greenpeace protest was animated at the opening of Gastech’s inaugural day. Paraphrasing one of the most popular Netflix series of all time, he accused many of the exhibitors at the Fair of "greenwashing".

Images of Greenpeace posters at the Rho Fiera metro station on the first day of Gastech 2022

Images of the Greenpeace posters at the Rho Fiera metro station on the first day of Gastech 2022

Fossil sources return to the center of the stage An engineer who deals with transmission systems tells off the records to of liquefied natural gas:

“A few years ago the market for this resource was given up for dead: the energy transition required zero impact, renewable energy solutions. Then came the pandemic and above all the supply crisis from Russia: now liquefied natural gas has become a growing business. And it will still be for at least 4 years: just think of the new projects in the United States ”.

According to the main operators, the gas that is now missing from Russia will arrive from overseas, with 3 new projects that between 2024 and 2026 will increase the production of liquefied gas in the States by a third. And in fact at Gastech it is the US exhibitors who are the most present, both in number and in importance. The Russians were clearly absent and the Chinese were almost entirely absent. European exhibitors are residual and are involved in transportation rather than gas production. A source that until a few years ago was on the sidelines of the debate on the energy transition.

Now, says Lorenzo Simonelli, president and CEO of Baker Hughes, during one of the first debates on the Gastech stage, "we must reopen the dialogue: for example, gas has been excluded from COP26. But in the future we will have an energy market with more demand than supply: we will have to invest more in research on natural gas. And in the meantime it is necessary to invest in research on energy with low environmental impact. We need more energy and we must use all that is available today ". Gas is not the only fossil resource that has returned to the center of the debate: there is also room for oil. ”Summarizes Meg O'Neill, CEO of Woodside Energy, on stage with Simonelli:

“ I believe that the world has understood that without fossil energies we cannot go on "

Refine the conclusion the third interlocutor on stage with O'Neill and Simonelli: Ryan Lance, CEO of ConocoPhilips:" Energy transitions are not substitutes , but additive. Everything is in the the way in which retail sales are managed during the transition and in the effectiveness with which energy security is guaranteed ”. The key concept is in this expression: energy security. An image that recalls the echoes of the conflict in Eastern Europe. The great narrative of this edition of Gastech is summed up in a phrase that the CNBC interviewer Hadley Gamble often repeated: "Energy security is national security". Energy security is national security. Which in the way it was contextualized can be translated as follows: we all want a low-carbon future and we will work for this, but in the meantime the advice is to diversify the energy portfolio, since the world can reserve unpleasant surprises such as the crisis in Ukraine.

The great expectation for green hydrogen The Gastech edition in Milan was accompanied by the words Hydrogen. However, the exhibitors really dedicated to the production of green hydrogen were very few compared to the counterparts of natural gas, or sometimes they dealt with the production of both energy sources. It is clear from the opinions of the speakers and delegates of the event that the future of energy will lead to the development of hydrogen, but it will take time to have large availability of the green one (ie produced from renewable and non-fossil sources). Explains Sigmar Gabriel, former German deputy chancellor and foreign minister: “Without doubt, the importance of natural gas as an energy source has increased in recent years. The expansion of renewable energies takes time and hydrogen will continue to be produced from natural gas in the coming years as well, as there is not enough production capacity in Europe today for green hydrogen.

In the immediate future, natural gas will remain an indispensable source of energy as much as a primary product for the production of hydrogen ".

Later an energy economy based on renewable sources will be developed, later it will be possible to adopt green hydrogen as a stable solution since this depends on the diffusion of "green" sources. For this, it would be necessary to accelerate the energy transition and the markets dedicated to renewable solutions. To do this, there is a need for increasing investments in research and development: resources that now, especially due to the crisis triggered by the conflict in Ukraine, are returning to reward projects for the extraction of fossil fuels, especially gas. And later these solutions will be developed, later the big countries that emit Co2 will go to renewables. Shri Hardeep Singh Puri, Minister of Oil and Natural Gas of India explained clearly to Gastech: "I believe that green hydrogen is the future. But our main concern over the past two years has been to ensure constant availability of energy at affordable prices. We have a population of about 1.4 billion people, 60 million people go to petrol stations every day to fill up: every day we consume 5 million barrels of oil.

Our overall strategy, from here on out, is to ensure that, without minimizing or undermining in any way our commitment to the green transition, we will be able to ensure availability, accessibility and energy security "

One of the debates at Gastech's opening ceremony

As long as the production of energy from fossil sources grows, renewable solutions of any kind will struggle to compete. coming from this edition of Gastech confirm that the business world has begun to look at gas and oil again to respond to the growing demand for energy that humanity will present in the coming years.

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