BAKU, Azerbaijan, Sept.1
By Leman Zeynalova – Trend:
Sustainable natural gas supply to cope with harmful effects of the COVID-19 pandemic, Trend reports with reference to the Gas Exporting Countries Forum (GECF).
“Natural gas could play a key role in alleviating energy poverty and creating new jobs across the globe in the recovery phase. The potential to create new jobs at a lower cost and with less environmental impact is one of the brilliant features of natural gas that makes it a suitable energy source to cope with the harmful effects of the pandemic and revitalise the economies. Meanwhile, there is mounting evidence that obstruction of natural gas raised energy expenses for consumers in the past years due to inadequate energy policies implemented by certain countries. It is worth mentioning that to precisely analyse the potential of job creation by different sources of energy, in addition to the investment required to create jobs (jobs per million USD investment), the environmental impacts also need to be considered,” reads the latest GECF analysis.
GECF believes that the unprecedented events such as virus outbreaks or financial crises could cause an imbalance in energy supply and demand.
“Like other sectors, these low probability events significantly impact the energy sector, as we observed during the virus outbreak. In the early months of the pandemic, demand dropped due to declining economic activities and restrictions; consequently, oil and natural gas prices dropped sharply. A while later, when the restrictions relaxed and economic activities resumed, the demand started to recover. At the same time, the supply couldn't outpace the demand due to the lack of investment in the previous months. In the imbalanced market condition, extreme weather is enough to trigger instability in the energy markets. This is exactly what the global markets experienced in East Asia and the U.S. at the end of 2020 and the beginning of 2021. Extreme colds in the winter and extreme hot weather in some regions in summer imposed instability and price shocks to the energy markets in 2021.”
The natural gas market’s response to the shocks during the pandemic demonstrates its resilience during times of uncertainty, according to the organization.
“In addition, LNG flexibility added more value to the already positive attributes of natural gas during market shocks. The natural gas suppliers, particularly LNG, continued sufficient supply of this energy source despite all the difficulties, such as restrictions and project delays, even covering the shortages of other energy sources during the pandemic. As a result, the delivered volume of LNG in 2020 rose by around 1.5 percent to stand at 360 metric tonnes (mt) despite all the shipping restrictions, which indicates the reliability of natural gas during unfavourable conditions.”
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