One of the rallying cries in favor of liquefying and exporting U.S. natural gas has been to help reduce greenhouse gases in other countries, by crowding out coal in Asia and Europe.
Yet tucked into an Energy Department report on LNG exports is a different view: That U.S. exports of LNG to China could end up being worse from a greenhouse gas perspective than if China simply built a new power plant and burned its own coal supplies. The report also says that the climate benefits of exporting LNG to other countries are modest.
The report is titled “Life Cycle Greenhouse Gas Perspective on Exporting Liquefied Natural Gas from the United States.”
It says the benefits of cleaner, more efficient combustion of natural gas are largely offset by methane leakage in U.S. production and pipelines and by methane leaks and energy used in the process of liquefying and transporting the LNG. In the case of shipping LNG from the U.S. gulf coast to Shanghai, the greenhouse gas benefits could in some cases be completely offset by those factors when measured over a 20-year period, the report says.
The Energy Department report was released May 30 when the department announced that it would no longer issue preliminary approvals for LNG export permits that are needed for shipments to countries without free trade agreements with the United States.
Critics of LNG exports say that the report buttresses their arguments. Mike Tidwell, director of the Chesapeake Climate Action, which is trying to block a Dominion Resources-owned LNG export terminal in Cove Point, Md., said that the report would cast LNG exports in an even worse light if it used what he called more realistic leakage estimates for U.S. production and pipeline transportation.
“If their analysis is overlaid with more realistic foreign and domestic leakage assumptions, it becomes clear that the immediate climate impacts of LNG would be much worse for the climate than coal if exports began today,” he said.
Bill Gibbons, an Energy Department spokesman, pointed to the report’s conclusion, which did not highlight any harm from a climate standpoint. But the conclusion also does not assert substantial benefits.
It says “that the use of U.S. LNG exports for power production in European and Asian markets will not increase GHG emissions, on a life cycle perspective, when compared to regional coal extraction and consumption for power production.” It added that “no significant increase or decrease in net climate impact is anticipated from any of these scenarios.”
The report’s China scenario assumes a U.S. natural gas methane leakage rate of 1.6 percent. It measures LNG exports that would travel from New Orleans to Shanghai. It assumes that if China relied on coal instead, that it would build a new, relatively efficient coal plant that burned with a 36.7 percent efficiency rate. It also assumes that the gas would be delivered to a power plant near an import terminal, minimizing leakage there.
Methane is a potent greenhouse gas, 85 times as potent as carbon dioxide when measured over 20 years and 30 times more potent over the 100-year time frame often used by climate change experts. The Energy Department report gave estimates under both.
The result: A range of outcomes over 20 years that would on average save about 25 percent of greenhouse gas emissions from local coal but which could in other cases produce more.
Gibbons says that the report used conservative estimates. He said the 1.6 percent leakage rate was higher than the expected 1.4 percent level, a median EPA figure; Tidwell said it is only a fraction of the actual leakage rate. Gibbons says the report assumes efficient coal burning plants, yet China experts say those levels of efficiency are typical of new plants there.
James McGarry, who works with Tidwell at the Chesapeake Climate Action Network, says that the Energy Department report also underestimates leakage in importing countries by assuming delivery to a power plant near LNG import facilities. He notes that India, a customer of the Cove Point terminal, uses only 44 percent of its natural gas for power generation and uses 25 percent for its fertilizer industry, creating new chances for leakage.
This debate isn’t new, and the Energy Department was relying on earlier studies by the National Energy Technology Laboratory.
“The process of liquefaction, transport, and regasification of LNG is highly emissions-intensive, increasing by 15 percent the total life cycle GHG emissions associated with exported U.S. natural gas,” James Bradbury, senior associate of the climate and energy program at the World Resources Institute, said in congressional testimony on May 7, 2013. “These added upstream emissions also significantly reduce the relative advantage that natural gas would have over higher-emitting fuels, like coal and oil.”
In July 2013, the American Petroleum Institute published a report by the LEVON Group that said that LNG emissions “are due to fugitive emissions from station operations, along with venting and fugitive emissions from operating LNG compressors and engines.” It spelled out areas for improvement.
Tidwell also points to energy needs of the LNG plants. He notes that at Cove Point, Dominion is seeking to build a 130 megawatt plant to chill the natural gas to 270 degrees below zero — the temperature at which it becomes liquid and can be pumped onto tankers.
Proponents of LNG exports also say that leakage will shrink as a result of industry efforts and Environmental Protection Agency guidelines for capturing methane at fracking sites.
A paper by Cornell University’s Robert Howarth based on existing studies said the leakage rate could be as high as 6 percent. Stanford University’s Adam Brandt led a review of existing studies and said that actual gas emissions are 50 percent higher than EPA’s estimate.
The Environmental Defense Fund is conducting 16 studies with nine companies of the natural gas supply chain to get more precise figures, including ones for widespread hydraulic fracturing techniques for tapping shale gas.
“It is fair to ask the question: 'What are the methane emissions associated with the gas being produced and distributed?',” said Mark Brownstein, chief counsel of the climate and energy program at the Environmental Defense Fund. “To acknowledge that those emissions exist isn't the end of the story. The end of the story is when you take steps to reduce or eliminate those emissions and I think that’s where the focus needs to be. Whether we’re keeping the gas at home or sending abroad the goal is the same.”
But Tidwell argues that the leakage figures on LNG show that at least one area of development is undermined by climate issues.
“They’re putting together a best case scenario and still you get worse than regional coal over 20 years,” he said. “If you take anything other than this rosy scenario you get significantly worse than coal over 20 years. The whole clean gas argument for shipping it to our friends falls apart. This is the first official quantification of the realistic weakness of part of their core argument.”