Navigating the LNG Dilemma: Debates, Delays, and Decisions in a Shifting Energy Landscape

In a recent announcement, the White House declared a pause on the approval of new LNG terminals, a move that has ignited debates within environmental and energy circles. The natural gas industry is seeking to expand the market for US-produced natural gas and argues that LNG exports would replace coal in other countries and thus reduce global CO₂ emissions. On the other hand, some environmental advocates argue that natural gas has a higher climate impact than coal and the approval of the LNG terminals would be a betrayal to President Biden’s climate ambitions. While I believe that the pause in approvals is a positive step from a climate perspective, the ongoing comparison of natural gas to coal and the outdated notion of natural gas as a "bridge fuel" are aspects of the discourse that warrant reconsideration.

The debate over the environmental impact of using natural gas versus coal for electricity generation hinges on various factors, particularly when assessing their respective climate footprints. On average, using natural gas is likely to have a lower climate impact than coal. Only if we assume high methane leakage rates and a 20-year global warming potential is natural gas worse than coal, and such assumptions are likely unrealistic. Liquefying, transporting, and regasifying natural gas would increase its carbon footprint, as highlighted in a paper I authored in 2007. However, a more recent study published in 2022 provided insights into the broader picture. The authors found that increasing international access to US LNG would induce increased demand for natural gas but would also enable fuel switching from coal. The study estimated that exporting 2.1 billion cubic feet of natural gas per day[1] in the form of LNG could result in a small reduction or a small increase in global greenhouse gas emissions. On average, the authors estimated a reduction of 8 megatonnes of CO₂e per year, a figure that, while noteworthy, pales in comparison to the 36,800 megatonnes of CO₂ emitted globally in 2022 and to the magnitude of projected annual reductions needed to be consistent with global climate change mitigation goals. Similarly, another 2022 paper suggests that any benefits from switching from coal to LNG for power generation in other countries would start decreasing after 2030 as a result of increasing emissions from LNG not used to substitute coal. 

Within the context described above, the arguments that natural gas is "better than coal" are insufficient. The global commitment to the 1.5-degree climate mitigation target outlined in the Paris Agreement necessitates a substantial transformation of the global energy system. The continued use of coal is incongruent with the goal of reaching net-zero emissions, but so is a massive expansion of natural gas consumption. Thus, the questions we should be asking is what role does natural gas play in a net-zero system, how can investments made today support that role and avoid stranded assets, and how do LNG exports from the U.S. fit with the goals of the Paris Agreement. 

Modeling for the United States indicates that natural gas will likely persist in the energy mix even in a net-zero system. Similarly, in global mitigation scenarios, natural gas remains a factor in the equation. The extent of its role will depend on the availability and advancement of carbon dioxide removal technologies. However, a substantial expansion of global natural gas consumption beyond current levels conflicts with the 1.5-degree — and for that matter, the 2-degree — target. In other words, a bullish path for natural gas is, according to a large body of modeling studies, fundamentally at odds with reducing the risk of catastrophic climate change. Within this context, the delay in new LNG terminal approvals appears to align with the broader climate mitigation goals.

Some assert that Europe requires new natural gas sources to replace Russian imports, while China persists in developing coal infrastructure. Nevertheless, embracing more climate-friendly alternatives, such as electrification for space heating and industrial processes, coupled with an intensified focus on renewables and nuclear power, offers viable options to diminish dependence on Russian gas and Chinese coal. The argument that if we don’t export our natural gas, someone else will or China will keep building coal also lacks compelling force. This “if we don’t do it, someone else will” reasoning has been employed for thirty years to stall climate action. As we advance into the third decade of the 21^st century, the U.S. bears a moral imperative to lead by example rather than relying on this well-worn justification for expanding its fossil fuel industry. This is not to suggest that U.S. LNG exports are entirely superfluous or will sharply decline. The U.S. already holds the position of the largest LNG exporter. Existing LNG export terminals are set to process over 13 billion cubic feet of natural gas per day in 2024, and capacity could reach 24 billion cubic feet of natural gas per day by 2027, when already-approved terminals will be completed. Consequently, even without new LNG terminal approvals, the U.S. is likely to remain a significant LNG exporter. Yet, additional approvals would likely be inconsistent with global emissions pathways that would limit climate change to 1.5 degree Celsius above pre-industrial levels.

When discussing this post with a colleague, he questioned the need for additional research on the life cycle climate impacts of LNG. From the perspective of the moral imperative of limiting fossil fuel expansion to levels that are consistent with the Paris Agreement, I contend that such additional research is likely irrelevant because we already know that natural gas has higher life cycle greenhouse gas emissions than other low-carbon energy sources. However, the Biden administration requires quantitative analysis to support potential decisions on new LNG terminal approvals, where additional scrutiny holds value. After a decade of evaluating methane emissions from U.S. natural gas production, researchers have identified substantial variability in emissions from natural gas-producing basins in the U.S. This variability could affect the marginal impact of each cubic feet of LNG used to displace coal, potentially reducing the climate benefits touted by proponents of new LNG terminals. Unfortunately, current global energy system modeling tools lack the capacity to consider the heterogeneity in life cycle emissions for all natural gas units. Such tools could include detailed supply curves for LNG coupled with estimates of respective life cycle greenhouse emissions. Thus, delaying approval decisions provides the government with the time needed to develop tools supporting a final determination.  

In the context of my research, I am particularly interested in other critical questions about LNG that merit further analysis. With the U.S. set to be capable of exporting over 20 billion cubic feet of natural gas per day by 2027, understanding the "best use" of such LNG becomes crucial—is it for power generation (unlikely) or possibly for steel production? It's also important to remember that any use of natural gas in line with the Paris Agreement will require carbon dioxide removal (CDR). However, technologies facilitating CDR, such as direct air capture and biomass energy with carbon capture and sequestration, are still in their early stages of development. More research and investments are crucial to ensure CDR technologies are available by the middle of the century. These issues are the ones that inform my work at the Open Energy Outlook Initiative. 

I first started doing research on the climate impacts of natural gas and LNG infrastructure in 2005, a time when the prevailing narrative labeled natural gas as a 'bridge fuel' to a cleaner energy system. Almost two decades later, it has become increasingly evident that we must move beyond the notion of natural gas as a transitional solution, particularly in power generation. The metaphorical 'bridge,' originally designed to guide us toward a destination, has been our trajectory for over a decade. Thus, it is imperative to step away from this metaphorical bridge. While natural gas will persist in the global energy mix, it should no longer be considered a bridge fuel. Moreover, a substantial increase in global natural gas consumption beyond current levels is likely to hinder our progress towards achieving global net-zero emissions by the middle of the century — a compelling reason to accelerate towards the path of net zero, leaving the metaphorical bridge behind in the rearview mirror.

[1]The proposed Venture Global LNG's Calcasieu Pass 2 (CP2) project, for which approval has now been delayed would have an export capacity close to 4 billion cubic feet per day.