Image credits: Marra Sherrier
News Article

Natural Gas a Driver for Development

By Cas Biekmann | Wed, 05/13/2020 - 16:50

Natural gas is not usually considered the “ideal” energy source due to the fact that it still emits CO2. However, it does significantly less than other fossil fuels. But going completely green and taking part in every environmentalist discourse is a privilege, argue academics worldwide, such as Karl Muth at Global Policy.

Countries that are in stages of development have to ensure their population climbs out of poverty first. Even though renewable energy has proven to be very competitive in terms of pricing, it does often need much investment to develop utility-scale projects. Natural gas, however, can be imported cheaply from the US to Mexico, in particular, due to its proximity. What is more, it is probably needed anyway to fill the gaps when the sun goes down or winds are not as strong. It serves, therefore, as an important pillar for national development.

The Stanford Natural Gas Initiative (NGI) showed how natural gas is a key driver in poverty reduction, arguing that energy access is critical to alleviating poverty. For this to happen, a country needs more than low-level electricity and natural gas is a suitable source to meet these energy needs. Natural gas development requires a viable value chain and private companies can enter this market for their own benefit while supporting regional development, as well.

In Mexico, gas pipelines are already widely established, although there are some regions in the country where they do not exist. Areas of Oaxaca and Chiapas remain without coverage, which hampers national development, said David Madero, Acclaim Energy’s Director of Energy Solutions to Energia Hoy. Nonetheless, pipelines are being improved, as President López Obrador nipped 2019’s disagreement between private developers and the public sector in the bud. This satisfied developers, such as Canada’s ATCO, leaving room open for further projects in the future. While there are still other technological bumps on the road the country would need to overcome, none of these are outside the realm of possibilities. Although COVID-19 is currently stalling projects that are not considered essential, which includes energy infrastructure, this is still considered only a temporary slowdown in the sector.

In times of COVID-19, natural gas is also proving to be beneficial not only for development purposes but also to keep society safe. To show solidarity with Mexico’s health sector, Naturgy announced that it will supply free natural gas to more than 60 public hospitals connected to its distribution networks in Mexico City and in the states of Nuevo Leon, Coahuila, Guanajuato and Tamaulipas during the months of May and June. Furthermore, Fundación GLP Transforma gathered distributors under its program called ‘Stay at Home, we will bring you the gas.’ The program aims to bring LP gas to people living in poverty conditions who have been affected by the pandemic. “The goal is to reach homes living in poverty, consuming up to two 20kg gas cylinders per month,” the initiative said in a statement reported by Forbes. By providing them with these assets, families’ financial burden is alleviated and the need to go out on the streets diminished.

The data used in this article was sourced from:  
Global Policy, Energia Hoy, NGI, Forbes
Photo by:   Marra Sherrier
Cas Biekmann Cas Biekmann Journalist and Industry Analyst