The U.S. Department of Energy made a big announcement late last week, green lighting the country’s second liquefied natural gas (LNG) export project. Many argue that natural gas exports will bring economic and geopolitical benefits for the United States--with Japanese and French companies coming on board as key partners in the proposed export station.
Indeed, natural gas can contribute to a lower-emissions trajectory--but only if it’s done right. With effective policies and standards in place, natural gas can help displace coal while complementing lower-carbon, renewable energy sources. But without these protections, U.S. LNG exports will likely lead to an increase in domestic greenhouse gas (GHG) emissions and, as discussed below, may have a negative effect on global climate change.
Burning natural gas releases half as much carbon dioxide (CO2) as coal, yet the fuel still comes with considerable environmental concerns. For starters, coal is a relatively low benchmark for environmental performance. Without the right policies in place, expanded natural gas could just as easily displace lower-carbon energy options, including renewables and energy efficiency. Furthermore, producing and delivering natural gas poses risks to fresh water supplies, wildlife habitat, air quality, and the climate (see: here, here, and here).
Of particular concern are “fugitive methane emissions,” which escape into the air from various points throughout natural gas systems, reducing the net benefit of switching to gas from coal or oil-based fuels. Methane is a potent greenhouse gas—at least 25 times stronger than CO2. Reducing emissions of this gas could help to slow the rate of climate change.
Recent WRI analysis found that while there are many known strategies and technologies to reduce fugitive methane, much more could be done cost-effectively. In fact, through the broader use of available technologies and best practices, fugitive methane from natural gas systems could be cut to less than 50 percent of current levels.
While increased domestic natural gas production has been credited with recent reductions in U.S. CO2 emissions, exporting natural gas would likely have the opposite effect. Three issues come into play:
Exporting LNG requires liquefaction, transport, and then re-gasification—a highly energy intensive process. The DOE’s National Energy Technology Laboratory estimates that emissions from this process would more-than-double domestic natural gas production’s “upstream” life cycle emissions—those emissions that occur prior to fuel combustion. When factoring in “downstream” CO2 emissions – that is, emissions that result from fuel combustion – exported LNG is about 15 percent more emissions-intensive than natural gas produced and consumed domestically. Furthermore, more than 60 percent of these additional emissions would occur at domestic liquefaction terminals.
The Energy Information Administration (EIA) projects that exporting LNG would increase U.S. natural gas production, mostly from shale wells. An inevitable consequence would be greater upstream air emissions from natural gas infrastructure, including fugitive methane and CO2 emissions. Expanded natural gas production comes with all of the inherent environmental risks listed above, particularly under current policies, which could be far more protective of public health and the environment.
The EIA recently concluded that any amount of LNG exports would put upward pressure on U.S. natural gas prices domestically. This would make natural gas less competitive in U.S. electricity markets, likely causing a shift toward greater coal-fired power generation. Unless power plant emissions standards are in place to avoid this outcome, the result would be higher CO2 emissions from the U.S. power sector.
Plus, U.S. LNG exports may not actually curb global climate change, as supporters contend. Certainly, greater international supplies of natural gas would help reduce market prices for this fuel and, therefore, reduce reliance on higher-carbon fuels, such as coal or fuel-oil. However, modeling by the International Energy Agency has found that an expanded international natural gas market – which would result from U.S. LNG exports, plus increased natural gas production elsewhere – would only reduce global energy-related CO2 emissions by 0.5 percent below business-as-usual by 2035. That’s less than 10 percent of projected GHG emissions caused by fugitive methane from global natural gas and oil systems over the same time period. In other words, without new policies and technology interventions, any climate benefits from increased natural gas use internationally could be dwarfed by accelerated warming caused by fugitive methane emissions. These projections underscore the urgent need to minimize fugitive methane emissions in the United States and internationally (see here and here).
An Urgent Need for Climate Policy
It’s true that natural gas is less carbon-intensive than coal; natural gas-fired power generation is typically much more efficient than coal- or oil-fired plants; and natural gas generators are a great complement to intermittent wind and solar power. However, recent history and energy sectormodeling studies tell us that natural gas will not serve as a low-carbon bridge fuel on its own. To stabilize the climate, we need policies to reduce greenhouse gas emissions from natural gas to a fraction of current levels in the coming decades. This could be partially accomplished through policies that spur the greater use of existing technologies to curb upstream emissions, but also through strategies deploy carbon capture and storage (CCS) for CO2 emissions from natural gas-fired power. Before opening the doors to an expanded U.S. natural gas production and LNG exports, we need to fully understand the associated risks—and put into place robust policies to mitigate them.
Over the coming months, the Obama administration has the opportunity to ensure the country is on a low-emissions trajectory. Reining in methane emissions from natural gas is a key piece of that puzzle. As WRI’s recent report found, the administration can also place new standards on power plants, reduce hydroflourocarbons from refrigerants, and help increase energy efficiency. Together, these steps will help the administration reach its emissions goal and move the United States toward a safer, lower-carbon future.