Investment Institute

A climate change conundrum: Is there a sweet spot for natural gas in the energy transition?

  • 27 September 2021 (10 min read)


  • When burned, natural gas derived from methane emits far less CO₂ than coal. However, if released directly into the atmosphere, it has a far higher warming potential
  • The concentration of methane in the atmosphere is higher now than at any time in at least 800,000 years, and this is due to human activity
  • Leakage of methane from oil and gas infrastructure has dented the green credentials of natural gas, but those emissions are very often preventable
  • We believe regulators should push for stricter policies, pushing oil and gas companies to adopt best practice in operations
  • If inadvertent emissions can be brought under control, then we think methane can have a role in the energy transition, especially as an alternative to coal
  • Care must be taken to ensure this does not slow the adoption and deployment of renewable energy to reduce absolute greenhouse gas emissions
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