Some key takeaways for the FLAME conference 2023:
- Natural gas and LNG will continue to play an important role in the energy transition, but European governments and companies do not want to commit to any long-term infrastructure investments or binding contracts when there is a chance the use of gas could get banned at some point.
- There is not enough clear policy in place that can signal to investors that they can invest in Europe.
- The market works and has been working throughout the energy crisis; there should not be reactionary policy such as price caps that can cause unintended consequences.
- Europeans feel confident now with their current level of natural gas storage (60%?), but a hot summer and/or cold 23/24 winter could be harsh.
- Still a lot of uncertainty and concern on whether China’s LNG demand will return this year. The projected ranges of growth vary quite a bit.
- The energy transition is different for different regions/countries depending on where they are on their energy development right now; for example, moving away from burning oil, wood and dung to burning gas is a cleaner and healthier option for some countries while moving more toward wind and solar is an option for others.
- The sentiment with Europeans is that for the energy transition to be successful, they need able to build out renewables faster.
- Intermittency is still a major problem (solved by natural gas) and right now Europe is able to transfer that problem to other countries (poorer countries) by buying up the LNG on the spot market.
- Hydrogen is going forward. Taxpayers will invest trillions into it. Challenges associated with hydrogen may be getting a short shrift compared to the hype around how great hydrogen will be for the future.