Is LNG a Bridge to Nowhere? Experts Debate Its Future

Is LNG a Bridge to Nowhere? Experts Debate Its Future | OilPrice.com

The long-term role of natural gas in the global clean energy transition is a subject of significant debate on the world stage as evidence mounts that LNG might be much, much worse for the climate than previously thought. While these recent findings have spurred significant steps toward reevaluation of LNG’s role in any ‘clean’ energy landscape, there is also significant pushback against prematurely curbing the production and export of the fossil fuel, as it could play a critical role in maintaining energy security during this transitional phase.

The global LNG industry has grown leaps and bounds in recent years, largely on the pretense that it would serve as a comparatively clean “ bridge fuel” between coal and oil on one end of the spectrum, and renewable energies on the other. However, recent research indicates that LNG could actually emit 33% more greenhouse gas emissions than coal over a 20-year period.

Although coal is the dirtiest fossil fuel upon combustion, taking the fuel’s whole life cycle into account paints a very different picture. The lion’s share of greenhouse gas emissions associated with natural gas are involved in upstream activities, most notably drilling and extraction, supercooling the gas until it liquefies, and then shipping that liquefied natural gas around the world. In the end, the actual combustion of natural gas accounts for only a third of the fuel’s emissions, according to new research published in the Energy Science & Engineering journal this month.

“The idea that coal is worse for the climate is mistaken – LNG has a larger greenhouse gas footprint than any other fuel,” said study author Robert Howarth, an environmental scientist at Cornell University. “To think we should be shipping around this gas as a climate solution is just plain wrong. It’s greenwashing from oil and gas companies that has severely underestimated the emissions from this type of energy.”

Howarth’s findings, which were already circulated earlier this year, and which have now been supported through a rigorous peer review process, have already had a significant impact on energy policy in the United States, with ripple effects in other countries. On January 26th, President Biden announced that his administration would indefinitely pause approvals of new licenses to export LNG so that the U.S. Department of Energy could take a moment to review and assess whether the nation’s considerable and rapidly expanding LNG exports are “undermining domestic energy security, raising consumer costs and damaging the environment.”

But while Howarth argues that there is “no need for LNG as an interim energy source”, and that “ending the use of LNG should be a global priority”, other pundits vehemently disagree, arguing that prematurely ending use would be critically destabilizing for energy security at national and global levels. An interest group called the International Group of Liquefied Natural Gas Importers recently made a public plea at its annual general assembly held in Hiroshima, arguing that “reduced investment [in liquefied natural gas] will impact both access to affordable and reliable energy and economic growth for producers and consumers.”

The group emphasized that natural gas will be needed for decades to ensure energy security as the world transitions to cleaner sources. Perhaps unsurprisingly, this outlook is echoed by oil and gas industry leaders such as Shell Plc and Chevron Corp., which forecast a long-term role for LNG in the global clean energy transition. (It may be worth mentioning that LNG sales provided most of Shell’s $7.7bn in earnings growth in the first quarter of 2024). However, the International Energy Agency takes a cooler view, projecting that natural gas demand will peak within this decade, which would render any new long-lead projects as irrelevant and soon to be obsolete.

By Haley Zaremba for Oilprice.com

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