Emily Pickrell, UH Energy Scholar
The Russia-Ukraine war has reshaped the energy landscape, sending gas prices up and leaving Europe scrambling to disconnect itself from Russian oil.
In the U.S., it is also being used as a justification for expanding our exports of liquefied natural gas, or LNG. In March, the Biden administration discussed energy security concerns before promising to increase liquefied natural gas shipments to Europe. The commitment now stands at 15 billion cubic meters by 2022, with additional increases expected.
The challenge for the Biden administration will be balancing the much greater carbon footprint of LNG relative to pipeline gas with its climate change priorities. The need for this is already being championed by groups like Project Canary, which is pushing private companies and investors to report the emissions impact of their natural gas supplies.
LNG is somewhere between 50% and 200% more carbon intensive than piped gas, according to data from Wood Mackenzie. Its higher carbon intensity – that is, the amount of carbon produced per unit of energy generated – is due to the additional processing and transportation required.
Biden’s environmental goals have been some of the most clearly targeted at reducing the impact of climate change of any administration to date. They have included goals of a 100% clean energy economy and net-zero emissions by 2050. The administration has followed up on these goals with specific targets, such as plans to cut methane emissions 30% by 2030.
“One of the most important things we can do in this decisive decade is — to keep 1.5 degrees in reach — is reduce our methane emissions as quickly as possible,” Biden said in a recent speech.
It has pinpointed specific ways to achieve these reductions, tightening up regulations on venting and flaring of natural gas, and focusing on leak reductions and abandoned wells as ways to reduce methane leakage.
Yet while Europe’s protection seems like a reasonable justification for approving more U.S. LNG terminals, it is misleading to raise it as the principle driver for growing U.S. production.
Indeed, while the U.S. is working to meet as much of this LNG demand as it can, production had been scaling up long before Russian tanks rolled over Ukraine’s borders. U.S. exports of LNG averaged 9.7 billion cubic feet per day (bcf/d) in 2021, up 50% from 2020. Europe was receiving about a third of these exports in 2021: it averaged 3.3 bcf/d of LNG imported from the United States during 2021, up 32% from the previous year.
The rate of production growth was especially sharp last year, as several facilities finished construction and became operational: As a result, the U.S. shipped 6.7 bcf/d of LNG to Europe in December 2021, double its average rate for the year.
The U.S. is encouraging the development of more terminals through its permitting process.
The Federal Energy Regulatory Commission, or FERC, recently gave the go-ahead to three LNG and related pipeline projects that had been in permitting limbo: Cheniere Energy’s Stage 3 project in Corpus Christi, Energy Transfer’s Lake Charles LNG project and Gator Express’ pipelines that will support Venture Global’s Plaquemines LNG’s start-up.
The Biden administration is trying hard to both demonstrate that it is taking climate-warming emissions and Europe’s geopolitical energy supply woes seriously. And if these two goals seem contradictory, they are – at least in the short term.
“It is going to be complicated,” said Tracy Hester, who teaches environmental law at the University of Houston Law Center. “It is becoming apparent that the need for LNG in the short term has caused the energy transition to become much more complicated. It comes down to the fact that the expedited delivery of LNG to Europe has become a higher priority.”
Policy options for Biden in dealing with problematic methane emissions, Hester said, is to emphasize regulatory oversight that make methane as clean as possible, while still continuing to emphasize that natural gas is not a long-term answer to climate change issues.
At the same time, communities are also expressing concerns about these big LNG projects and their impact on neighborhoods.
For example, Save the Rio Grande, a Texas-based environmental coalition, has raised concerns about both the extraction of natural gas and the environmental cost of the LNG processing facilities, noting that “large-scale air emissions of 2.5 particulates, NOx & VOC’s is not in the public interest” in an April 27, 2022 letter to the Federal Energy Regulatory Commission.
A recent explosion at the Freeport LNG Facility on Texas’ Gulf Coast illustrates the validity of these kinds of concerns.
Protests are starting to focus around the long timeline for new LNG investments. Save the Rio Grande has pointed out that the not only will the new LNG facilities will essentially lock in 25-30 years of associated emissions.
And it is the high cost of building the facilities that will inevitably end up justifying the need to keep them running for decades, if only to recoup the amount spent on their construction.
For example, an LNG project under construction near Lake Charles, Louisiana is expected to cost energy company Tellurian more than $27 billion in construction and associated infrastructure costs. Shell and Energy Transfer are working on an export terminal to complement existing gasification and import facilities – with a price tag of somewhere between $12 billion to $16 billion.
“Once you start supplying Europe LNG from the US, those suppliers that engage in that activity are not going to be very willing to retrench at a later date,” said Pablo Pinto, director of the Center for Public Policy of the University of Houston’s Hobby School for Public Affairs. “Investing in LNG means developing an infrastructure that relies on hydrocarbons, even though you say you are trying to move away from them.”
None of this is to detract from the reality that the projected LNG growth over the next decade will be essential for global economic growth, especially for Europe.
Yet what will also be essential for the planet’s future climate conditions will be identifying pathways to reduce its carbon intensity.
Emily Pickrell is a veteran energy reporter, with more than 12 years of experience covering everything from oil fields to industrial water policy to the latest on Mexican climate change laws. Emily has reported on energy issues from around the U.S., Mexico and the United Kingdom. Prior to journalism, Emily worked as a policy analyst for the U.S. Government Accountability Office and as an auditor for the international aid organization, CARE.
UH Energy is the University of Houston’s hub for energy education, research and technology incubation, working to shape the energy future and forge new business approaches in the energy industry.
