Increased LNG exports would spell trouble for climate — study

By Ellen M. Gilmer, Jenny Mandel | 12/15/2017 07:28 AM EST

Energy researchers are taking aim at the often-touted climate benefits of U.S. natural gas exports and calling on the federal government to take a closer look at the issue.

Energy researchers are taking aim at the often-touted climate benefits of U.S. natural gas exports and calling on the federal government to take a closer look at the issue.

In a paper published in the journal Energy, researchers argue that shipping liquefied natural gas abroad will likely cause an uptick in global greenhouse gas emissions, rather than creating the benefits claimed by export boosters. The authors are pushing the Department of Energy and other decisionmakers to dig deeper into how other countries are likely to use American gas and how different types of use would affect overall emissions.

"We’re making very important decisions that have decadeslong ramifications related to LNG exports and how we do our energy trade globally, and we’re not properly considering the environmental impacts right now," said Washington, D.C.-based energy researcher Alex Gilbert, who co-authored the paper.


"There are good reasons for that: It’s difficult. The analysis is not the easiest thing in the world. It takes time to develop systems and methods and develop cross-agency and cross-academia expertise in those areas," he added. "But really the implications from our paper are that the greenhouse gas impacts from exporting U.S. natural gas, if you’re really looking at how it impacts things here at home and abroad, can be very, very bad."

That’s because large volumes of U.S. LNG may not actually replace dirtier sources. Instead, the study says, exports could simply add more fossil fuels to the mix for electricity, industry and other uses, while prolonging the lives of American coal-fired plants.

The research comes as the federal government is pushing the U.S. to become a major LNG exporter, building on efforts launched under President Obama. Gas exports are part of a broader Trump administration strategy to achieve "energy dominance" on a world stage.

Environmental groups, meanwhile, have mounted massive opposition campaigns to export proposals in recent years. Though their arguments about climate impacts have not gained traction in federal courts to date, studies like this give the groups new ammunition for future regulatory and legal battles. Questions about the climate impacts of LNG exports will also fuel ongoing political and policy debates.

The new study takes issue with previous DOE analyses and industry talking points that contend LNG exports help the global climate because importing countries can replace coal-fired power with cleaner-burning natural gas. Gilbert, co-founder of the energy research firm Spark Library, authored the new paper with Benjamin Sovacool, a professor at Aarhus University and the University of Sussex. They did not receive outside funding.

Weighing the energy needs and policies in markets they deem most likely to import American gas, Gilbert and Sovacool looked at a broader array of potential end uses of LNG, including heating and industrial use. They focused on four of the largest LNG importers in 2013 — Japan, South Korea, China and India — and concluded that a variety of factors would likely undercut potential climate benefits of exports to those countries.

In Japan and South Korea, for example, the study suggests that policies favoring fuel import diversity in the face of shuttered nuclear reactors could steer the countries to import more coal alongside LNG, meaning the U.S. product would be unlikely to actually displace high-emitting fuels. In China and India, meanwhile, American gas could simply serve ever-rising energy demand rather than sideline any dirtier sources.

The study converts emissions from various sources to a normalized metric of billion cubic feet per day, considers climate-warming methane leakage rates and lays out the extreme bounds of global warming potential over 20 or 100 years.

For example, U.S. gas that replaces coal used for electricity in the U.S. or the four Asian markets, or replaces Japanese oil or industrial coal, would generally reduce global climate impacts over 100 years — at varying levels depending on how much methane leaks along the way. On the other hand, U.S. LNG that feeds additional electricity and energy needs or displaces renewables would increase global emissions. The study suggests that most of the likely near-term scenarios fall into the latter category.

"While uncertainty remains, methane leakage, additional energy demand, and decreased domestic coal displacement have the very real potential to undermine any prospective climate benefit in the long term," the article says, adding: "Only with favorable assumptions which conflict with the energy strategies and needs of importing countries are there net climate benefits from LNG exports."

New tools and ammunition?

Gilbert noted that the study specifically targets DOE’s own life-cycle analysis of LNG exports, which he has criticized for focusing on gas replacing coal-fired electricity.

He said the approach he and Sovacool used — weighing importers’ energy strategies and corresponding end uses to analyze the upper and lower bounds of emissions — could easily be incorporated into the agency’s National Environmental Policy Act reviews for export applications.

"When we’re looking at these issues, we’re dealing with cross-border transactions, that gets really messy really quickly," he said. "And for the purposes of something like NEPA, we don’t need to know within any measure of certainty what the emissions are going to be, because that’s impossible. What we want to know is, ‘What are the potential ranges of outcomes? What is the high case, and what is the low case?’ And that’s what this study is really doing."

The study drew quick interest within the environmental community, which has long warned of the potential climate impacts of increased reliance of any fossil fuel, including natural gas.

"It confirms a lot of the issues that we have been arguing, not only with LNG but with gas in general," said Lorne Stockman, senior research analyst for Oil Change International. "The idea that it displaces coal and therefore it’s cleaner — this is often made without any actual analysis of the markets where it’s going."

"It’s definitely helpful to have a peer-reviewed academic paper that backs up what we’ve been saying for the past three years," he added.

Stockman and Sierra Club attorney Nathan Matthews, who has raised multiple failed legal challenges to DOE’s climate analysis for LNG exports, said they were likely to reference the new study in comments on pending applications.

The Sierra Club is waging relatively early-stage battles against export proposals from Jordan Cove in Oregon and three projects in Brownsville, Texas. Matthews noted that each challenge to DOE’s climate analysis depends heavily on the specific administrative record for the project at issue.

"My hope is that this takes a more sophisticated look at a point we’ve been saying for years and will be a reason to cause the Department of Energy to re-examine the issue," he said.

According to Gilbert, the study’s approach could help policymakers study the potential end-use scenarios for exported LNG and attempt to reduce emissions by reducing methane leakage and by influencing other countries to use U.S. gas in the most climate-friendly way possible.

"To the degree that we can influence those through international relations and through the Paris Agreement and through trying to reduce all our emissions globally together, that’s something that would tend to reduce a lot of the negative emissions impacts," he said.

If the U.S. were to reverse its current course and commit to meeting climate goals set under the international climate accord, it could also pressure others to enhance their commitments.

"We could use this as a very powerful tool of strategic environmental policy, and we’re not right now," he said.

Many environmentalists aren’t on board with that conclusion. Stockman, for one, maintains that any increase in natural gas use is untenable for the climate because any emissions reductions it might support in the best-case scenario would not be enough to avoid a devastating rise in temperature.

Growing research

The analysis is one of many that has sought to quantify the life-cycle greenhouse gas implications of an expanded U.S. natural gas industry. The results of those studies have been all over the map, depending in part on who commissioned them and what assumptions were made about end use.

DOE’s 2014 study completed during the Obama administration compared LNG exports with mining and burning coal over a 100-year time span and concluded that U.S. LNG used in Europe and Asia would not increase greenhouse gas emissions. At the time the White House was balancing pressure from environmentalists to rein in the surging natural gas industry with support for a domestic industry that was helping to decrease U.S. greenhouse gas emissions (Greenwire, June 10, 2014).

The following year, the Center for Liquefied Natural Gas published a study with more aggressive conclusions, contending that burning coal for power in LNG market countries resulted in twice the climate pollution that LNG would cause (Energywire, Oct. 6, 2015).

In 2016, a study of the Canadian LNG industry’s potential climate impacts that one of the authors described as "middle of the road" found that the climate impacts of growing the country’s export industry were too close to call, depending on numerous variables outside the control of the exporting country (Energywire, Aug. 25, 2016).

Responding to the top-line results of the new study, Charlie Riedl, executive director of the Center for LNG, said yesterday, "We agree with the study that it’s difficult to predict the range of export scenarios to Asia. However, we are pleased that this life-cycle analysis joins other leading studies in acknowledging that LNG’s life-cycle emissions are superior to coal’s."

Most of the existing studies, including Gilbert and Sovacool’s study, are based on an assumption that the vast majority of U.S. LNG exports would go to Japan, South Korea, China and India. Those four countries have big natural gas appetites and newly improved access to North American supply, thanks to a widening project that was recently completed on the Panama Canal that means it can now accommodate modern, super-sized LNG tankers.

Since LNG exports began flowing from Cheniere Energy Inc.’s Sabine Pass terminal in Louisiana last year, marking the first flows from the so-called U.S. export boom that is starting to roll out, cargoes have shipped to those four Asian countries. But they’ve also shipped to an unexpected variety of smaller markets on every continent except Antarctica, including Turkey, Poland, Malta, Jordan, Chile and the United Arab Emirates.

The surprising variety of destinations for U.S. shipments, and corresponding proliferation of use and emissions profiles for the fuel, highlights the uncertainties that Gilbert and Sovacool described in their assessment.

Leslie Abrahams, who led a 2015 LNG life-cycle analysis from Carnegie Mellon University researchers, said those uncertainties should spur action in areas where the U.S. government has control, like policies to reduce methane leakage from natural gas infrastructure.

"For LNG exports in particular, the interaction between environmental, social and economic consequences are so complex that it’s challenging for traditional tools like life-cycle analysis to really capture all those," said Abrahams, now at the Science and Technology Policy Institute, "so I think that doing these thorough and comprehensive life-cycle studies are an important first step to understanding what some of those highly sensitive parameters are, such as the methane leakage rate and end-use efficiency."

She urged caution on gaming out likely emissions scenarios, noting the broad suite of factors that go into DOE’s determination of what’s in the public interest.

"It’s not enough just to quantify all of the emissions and to understand the parameters," she said. "I think that for these types of issues that involve so many different stakeholders and are really so interdisciplinary in nature, we really need to take a broader perspective and think more carefully about how the social, economic and environmental issues all play in together to inform the policy decision."

Gilbert maintained that closer scrutiny of how American gas is used in other countries is critical to understanding how the country should move forward on exports.

"Studies like this, they’re not going to give you a definitive up or down vote; they’re not going to be able to say, ‘This will have this impact’ for any specific project," he said. "What they can do is give you an initial look at what the range of outcomes are, to also allow you to start targeting ways to reduce the bad parts of those outcomes."