Natural Gas for Development?
Understanding the opportunities and challenges for gas in a context of climate change
There is currently significant global interest in natural gas as a cost-competitive, reliable fuel, with lower carbon dioxide emissions than coal. For developing countries with natural gas reserves there is further hope that the fuel could serve as a source of economic development.
At the same time, the process of developing natural gas poses serious social, environmental, and economic risks, that threaten inclusive development and climate goals. On the former these pertain to the usual challenges regarding the development of hydrocarbons and the “resource curse”, however these challenges are unique given the specifics of the natural gas supply chain and the complicated institutional arrangements necessary to realize its economic potential. On the latter, environmental concerns, these specifically include risks around climate lock-in and issues around the leakage of methane, a powerful greenhouse gas, from the natural gas supply chain. All these challenges are compounded by the rapid changes taking place in the global natural gas market and the and the energy system more generally – which is seeing rapid changes in both the renewable energy technologies available and their price.
This research backgrounder by Oxfam details the risks and opportunities posed by natural gas and offers policy recommendations for developing countries with new finds of the resource. Finally, the report suggests some important areas for future research which will be important for addressing the gas-development-climate conundrum.