BY PHILIPPE BENOIT
AND ANNE-SOPHIE CORBEAU
March 23, 2023
Source: The Hill
Photo Source: Unsplash,
Earlier this year, the Biden administration paused action on pending approvals for U.S. liquefied natural gas exports to countries without a U.S. free-trade agreement, with President Biden citing ”the urgency of the climate crisis.” The decision was hailed by climate activists and criticized by oil and gas industry representatives.
While the Biden administration intended to send a message about addressing climate change, it is important to place the LNG story within the broader emissions context. LNG exports are a significant and visible part of the natural gas emissions landscape, but ultimately achieving international climate goals will require more actions that target domestic gas and global fossil fuel consumption.
According to the International Energy Agency, natural gas demand worldwide totaled 404 million tons of LNG, or 4.067 billion cubic meters, in 2022, including 919 billion cubic meters in the U.S. The combustion of this natural gas produced 7.5 gigatons of carbon dioxide globally. This includes 1.7 gigatons in the U.S., which is 38 percent of all emissions from fossil fuel combustion.
Importantly, these figures do not include natural gas-related methane emissions, a powerful greenhouse gas that substantially increases the climate impact of gas use. In 2022, the IEA estimated that global methane emissions from the energy sector were 135 million tons in addition to combustion emissions. Oil and gas — often produced together — accounted for 58 percent of these methane emissions globally, with the U.S. responsible for around 12 percent of the global total.
Methane emissions estimates vary substantially, prompting efforts at improved satellite and other detection methods.
LNG exports have been a growing part of the natural gas landscape but still represent a minority share. Global LNG trade reached around 550 billion cubic meters in 2023, representing about 13 percent of global gas demand. The U.S. LNG story is even more striking. Up until 2016, the U.S. exported only a limited amount from one facility. The shale gas revolution not only made U.S. gas cheaper it also led U.S. gas production to almost double over the past two decades, fueling a surge in LNG exports.
US LNG capacity has grown from 0.6 billion cubic meters per year in 2015 to 124 billion cubic meters per year in 2023. LNG plants currently under construction are unaffected by the pause and will bring the capacity to over 230 billion cubic meters per year by the end of the decade. Importantly, even after these new LNG export facilities come online by 2030, they will represent only 22 percent of U.S. domestic natural gas production and 25 percent of U.S. gas consumption.
These figures demonstrate that while LNG exports represent an important and growing use of domestically produced gas, natural gas consumption within the U.S. and its related emissions represent a bigger climate challenge. What can and will be done to address these emissions?
In this regard, it is important to understand how natural gas is consumed in the U.S. The biggest user is the power sector (40 percent), followed by industry, which it also uses it as feedstock for chemical processes (26 percent) and buildings (24 percent). Gas demand in the power sector could increase further if recent projections regarding rapidly increasing power demand prove accurate. These uses drive where emissions reductions are needed and the corresponding measures.
The literature is rich with ways to address domestic natural gas emissions in the United States and elsewhere. One example is replacing natural gas in the power sector with renewables and other lower emissions alternatives. More efficient energy use can dampen or otherwise reduce the need for natural gas combustion. Adding carbon capture, use and storage technologies where feasible and economic can also reduce emissions, notably in industry and power. Moreover, combining these strategies to different degrees can provide even stronger solutions than implementing them independently.
It is also necessary to stress the importance of methane emissions flowing from the domestic production and processing of natural gas, whether it is consumed domestically or exported as LNG or pipeline gas. Reducing these methane emissions along the whole gas value chain must remain a focus of climate action given its short- to medium-term impact on global warming.
Reducing natural gas and other emissions will require action extending beyond the federal government. This includes efforts by U.S. states such as the Regional Greenhouse Gas Initiative carbon market program and California’s 2022 climate action plan, as well as industry, businesses, civil society and other stakeholders. It also includes influencing other countries.
While the U.S. currently produces only about 14 percent of global CO2 emissions, as the world’s largest economy, the wealthiest nation by net worth and the second-highest emitter of greenhouse gases behind China, it sets the tone on international climate action. Without strong U.S. leadership, emissions from several countries can be expected to remain well above what is needed to avoid dangerous climate change. Understanding and addressing the potential emissions generated by US LNG exports is part of setting that tone, and it carries significance beyond the actual size and share of the LNG-related emissions.
LNG is an important element in the climate agenda, but only one part of the equation. Compared to domestic natural gas consumption or global energy use overall, it is not even the biggest part of the story.
Addressing emissions relating to the domestic use of natural gas and other fossil fuels and encouraging action abroad by China and other countries, should take up the bulk of our efforts. LNG-related emissions are important, but the weight of the climate change challenge lies beyond it.
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