Late last month, the Biden administration announced it’s suspending permit applications for exporting liquefied natural gas (LNG) as it reevaluates the economic, environmental, and climate impacts of the fuel.
LNG is produced by cooling natural gas into a liquid state, making it easier to store and ship to overseas markets. Natural gas itself has been a core but controversial part of the clean-energy debate for decades. When burned, it emits about half as much greenhouse gas as coal. Its use has helped drive down emissions from the power sector in some nations, including the US. But natural gas is mostly made of methane, a powerful greenhouse gas. Methane leaks along the supply chain, from production through shipping, threaten to erode the benefits natural gas offers as a cleaner-burning fuel.
Immediate reactions to the government decision have been predictable. Some environmental organizations hailed the announcement as a much-needed course correction, arguing that it could help the US meet its global climate commitments. Industry trade groups, in turn, have attacked the decision. They insist it’s a counterproductive way to cut greenhouse-gas emissions, and one that will undermine the nation’s energy security at a moment of growing geopolitical volatility.
Who is right? Turns out we are asking the wrong question.
What is important is not the absolute emissions associated with any given cargo ship full of LNG that departs from the US, the largest exporter of the product. Rather, when the fuel is exported, the net climate impact depends on what it replaces in the importing country, and whether realistic alternatives produce more or less greenhouse gas.
Consider this: The Russian war on Ukraine spurred dramatic growth in US exports of LNG to Europe. That gas was used primarily in the power sector to keep lights and heat on. In a parallel universe that did not see Russian aggression, the likely scenario would be a Europe that continued to purchase gas from Russia. Yet, as evidence shows, Russian natural gas is associated with higher methane emissions compared with the US natural-gas supply chain. That’s mainly because of Russia’s particularly leaky natural-gas infrastructure, which allows vast amounts of the potent greenhouse gas to escape into the atmosphere. In this context, replacing piped Russian gas with US LNG likely reduced overall carbon emissions, even with the added emissions from shipping the fuel across an ocean.
Or let’s take another example: US LNG exports to India are first used for applications such as fertilizer manufacturing or heavy industry, and only then in the power sector. This is because solar energy is the cheapest form of power generation in India. In addition, coal plants produce the bulk of electricity generation, thanks in part to subsidies for the sector.
Given all this, there’s no scenario in India where high-priced LNG imports can compete with coal or crowd out lower-carbon renewables. So here, too, the fuel almost certainly won’t increase overall emissions from the power sector.
None of this is to say that US LNG always reduces emissions around the world. Indeed, the entire point of the above examples is that the climate impact of the fuel depends on a variety of factors and must be evaluated on a country-by-country basis. In addition, whether or not US LNG reduces emissions on net may change over time as countries decarbonize.
There is a legitimate debate to be had about the long-term impact of US LNG exports, and whether—or under what scenarios—these exports are compatible with global climate agreements.
Over the past decade, the main way that natural gas has helped reduce emissions is by replacing dirtier coal-burning power plants. But how much longer the fuel can continue to help depends on our emissions and warming trajectories.
In research I coauthored with researchers from the University of Calgary, we found that LNG exports, broadly, can reduce global carbon emissions only until about 2035, in a scenario where nations achieve the Paris Climate Agreement goal of limiting warming to 1.5 °C over preindustrial levels.
That’s because at that point, there simply wouldn’t be enough coal plants still operating that could be replaced with lower-emitting natural-gas power plants.
But if the world misses that temperature target, and most signs suggest it will, natural gas could continue to help cut power-sector emissions over a longer time period. Indeed, in a scenario where temperatures rise by 3 °C, natural gas could still be supplanting coal through 2050—though, to be sure, we should strive to avoid that theoretical world for all sorts of reasons.
Still, coal-to-gas switching is a limited lens through which to view future use of natural gas. Increasingly, it will be used in other applications, including as a feedstock for heavy industries, like iron and steel, or in manufacturing of carbon-based products where natural gas is not combusted. Any calculations of climate impact made today need to reflect how US LNG will likely be used in the future, amid shifting global needs.
Whether you agree or disagree with the Biden administration’s pause, one thing is certain: the best thing to do right now to address the climate impact of US LNG is to fix and prevent methane leaks along the supply chain as fast as possible.
Here, the US is leading the rest of the world. Federal regulation, government investments, and voluntary industry action are poised to reduce US methane emissions more than 80% by 2030.
The immediate test, then, is whether we can get other countries that supply gas to meet stricter methane emissions standards. The US Department of Energy is now working with several other countries that export and import LNG to develop a global framework for monitoring, measuring, reporting and verifying methane leaks.
In a world where LNG consumers such as the EU, Japan, and South Korea demand that suppliers demonstrate low methane emissions, the US can lead the world in developing transparent and verifiable low-leakage gas supply chains.
There is value in considering the climate impact of US LNG exports, especially in the long term. Likewise, there is value in considering how the fuel might improve global energy security and, yes, reduce global carbon emissions.
Every importing country must think hard about its long-term demand for US LNG and develop a sound strategy that balances climate commitments, energy security, and the needs of its citizens and industries. In the meantime, the right question the US needs to ask itself is: Are we doing everything possible to reduce the greenhouse-gas emissions across the US LNG supply chain today, ensuring that it’s as clean an energy source as possible for the nations and scenarios where it is needed? Answering that starts with doing the hard work to ensure that the sector reaches near-zero methane emissions by the end of this decade.
Arvind P. Ravikumar is a research associate professor in the Hildebrand Department of Petroleum and Geosystems Engineering at the University of Texas at Austin and a senior associate with the Center for Strategic and International Studies.