Steps Urged To Expand Developing-Country Use Of Natural Gas

Natural gas should be used more widely as an energy source by developing countries as it is comparatively low in carbon emissions, is available in reserves in many developing regions, and is an efficient way of powering the future industrial needs of poor nations, specialists in the subject said today.

The topic was discussed during a special event on “Natural gas as an engine growth” held Monday, the third day of the UNCTAD XIII quadrennial conference here.  Qatar , host of UNCTAD XIII, is the world’s fifth largest producer natural gas and the largest producer of liquefied natural gas (LNG), in which the gas is purified and much reduced in volume through cooling, which transforms it into a liquid state.  LNG is often used as an efficient way of exporting gas by ship.

“Poverty cannot be eradicated without access to energy,” UNCTAD Secretary-General Supachai Panitchpakdi told the meeting.  “Inadequate access to reliable energy supplies has made it more difficult for many developing countries to advance economically, not only raising costs for the private sector but hampering the delivery of social services, therefore undermining economic and social development.”

Mohamed Ibn Chambas, Secretary-General of the African, Caribbean, and Pacific Group of States, quoting Kevin Ramnraine, Minister of Energy and Energy Affairs of Trinidad and Tobago , said “Natural gas is to the 21st Century what oil was to the 20th Century and what coal was to the 19th Century.”

The debate followed up on UNCTAD’s fifteenth African Oil, Gas and Minerals, Trade and Finance Conference held in Brazzaville , Congo , from 2 to 6 April.  The conference had as its theme “value creation and retention in extractive industries.”

Experts in the natural gas industry and government officials said at today’s event that progress in liquefying and shipping the resource makes it more feasible as a fuel that can be widely employed in poor nations with appropriate infrastructure.  But they urged that developing countries with natural gas reserves take steps to reap the “value added” from the energy source by establishing domestic abilities to carry out refining and such downstream activities as petrochemical manufacturing.  They said that merely harvesting and exporting the gas tends to result in limited domestic economic benefits – few jobs are created, and profit margins are less high if downstream processing is carried out elsewhere.

“Africa is richly endowed with energy products and minerals,” said Pierre Oba, Minister of Mines of the Congo . “Investments in upstream activities have increased, but the overall impact on the economies of host countries has been minimal due in part to the weak links of production — upstream and downstream, backward and forward and horizontal — with the broader economy.”

Mohammed bin Saleh Al-Sada, Minister of Energy and Industry of Qatar, which has thoroughly established downstream capabilities in natural gas, told the meeting “Security of energy is a double-edged sword.  Producers’ needs should be balanced with those of consumers through dialogue. The main challenge is creating an atmosphere of trust and transparency between both parties.”

Other speakers at the meeting reviewed “good practices” through which developing countries have benefited from value added associated with natural gas extraction and export.