At a major energy conference in Texas, which showcases some of the latest cutting-edge technology — including carbon capture innovations and the push to build the world’s first fusion power plant — it’s natural gas that’s stealing the spotlight this year.
The global demand for liquefied natural gas (LNG) is set to increase by 40 percent over the next five years, according to S&P Global. While natural gas has often faced criticism from environmentalists, executives in the energy sector now argue that its growing demand will be key in meeting the world’s need for reliable electricity while also helping nations reduce reliance on coal.
“Practicality and pragmatism will always win out,” said Tengku Muhammad Taufik, CEO of Petronas, a Malaysian oil and gas multinational.
This rise in LNG’s popularity can be attributed to multiple factors, including the growing demand from data centers. These energy-intensive hubs that store servers and computer systems require constant, reliable electricity. As tech giants look for diverse energy sources for their data centers — including hydrogen, geothermal, and nuclear — many in the energy industry predict that natural gas will play an important role in meeting these needs, at least in the near term.
“Data centers and AI are energy hogs,” said Meg O’Neill, CEO of Woodside Energy, an Australian oil and gas company. “We’re asking ourselves, ‘What energy source is going to be most flexible to meet that demand?’ And LNG will likely play a more significant role.”
Additionally, the energy security concerns heightened by Russia’s invasion of Ukraine have spurred countries to secure long-term LNG contracts. “Last year, we signed 10-year deals with industrial players in Japan, Korea, and Taiwan,” O’Neill said. “These countries know they need LNG and are seeking price certainty.”
LNG Will Be the ‘Core’ of the Energy Transition, Executives Claim
Patrick Pouyanné, CEO of TotalEnergies, a French multinational, shared his thoughts at the Houston conference, stating that gas-fired power plants could play a crucial role in helping countries move away from coal. According to data from Wood Mackenzie, burning natural gas generates only half the carbon emissions of coal.
“I’m convinced that gas will be the core of the energy transition,” said Pouyanné, adding that LNG could also complement renewable sources like wind and solar, especially in addressing their intermittent nature.
Dan Grossman from the Environmental Defense Fund (EDF) acknowledged this potential but emphasized that natural gas producers must address methane emissions if they want to claim the title of “green” energy. “If natural gas is going to be central to our energy future, companies need to manage their methane emissions effectively,” said Grossman.
Meanwhile, renewable energy advocate John Ketchum, CEO of NextEra Energy, raised concerns about the pace of natural gas development. He pointed out that building a new natural gas plant is a lengthy process, exacerbated by labor shortages, with new plants not expected to come online until the 2030s.
LNG Champions Speak Up
Despite differing opinions on natural gas’s role in the energy transition, politicians and energy executives from LNG-producing regions continued to emphasize its importance. U.S. Secretary of Energy Chris Wright, whose administration recently lifted a ban on LNG exports, argued that renewables cannot fully replace the extensive benefits of natural gas.
In Canada, Alberta Premier Danielle Smith also highlighted the importance of natural gas during a panel discussion at the CERAWeek conference. She referred to a recent study commissioned by the Alberta Energy Regulator, which revealed the province’s vast natural gas reserves, totaling 1,360 trillion cubic feet (TCF), far surpassing previous estimates.
“We have a really, really good gas story,” Smith said, noting that Alberta’s natural gas reserves make it a prime location for developing AI data centers and energy infrastructure.
Canada is also advancing its LNG sector with six West Coast projects in the works, including LNG Canada’s Phase 1 project, set to begin operations this summer. Tatsuya Terazawa, CEO of the Institute of Energy Economics in Japan, shared that Japan is particularly interested in Canadian LNG, as it helps secure energy supplies and diversifies their energy sources, especially with the short distance from British Columbia.
O’Neill of Woodside Energy noted that although her company previously pulled out of a B.C.-based LNG project, they are closely monitoring developments in Canada’s LNG sector. “We’ve been very optimistic about monetizing North American gas for some time,” she said, reflecting a growing global interest in the region’s natural gas reserves.
