Natural gas should be part of the energy future

Too often, policymakers want to talk about issues in terms of black and white. In energy and climate policy, that tends to lead to the “renewables vs. fossil fuels” line of thinking. We’ve seen policymakers try to legislate away the use of fossil fuels in the U.S. (Rep. Tulsi Gabbert’s 2017 “Off Fossil Fuels” legislation) and environmental NGOs fundraise by vilifying the fossil fuel industry. And we’ve also seen a U.S. President refer to climate change as a “hoax,” even if he later walked that comment back.  However, if we are going to make real progress, we must stop the hyperbole and develop policies that offer pragmatic solutions to climate change.

Rep. Garrett Graves of Louisiana gets it. On a February 17, 2022 ACCF webinar, he noted that we must develop technologies that enable us to offset carbon emissions and continue developing the energy advantages we enjoy in the U.S. Graves was referring, of course, to carbon capture, utilization and storage, or CCUS.  CCUS is a suite of technologies that enable the removal of carbon dioxide from power generation or other industrial operations, or even from ambient air, and then use the CO2 in industrial applications or store it deep underground.

Many energy and climate experts from both parties support further development of CCUS. Former Obama Energy Secretary Ernie Moniz is a strong supporter, as are former Trump Energy Secretary Dan Broillette and Sen. Joe Manchin and a slew of his colleagues on both sides of the aisle.

Perhaps our greatest opportunity to benefit from CCUS is that it – along with efforts to reduce methane emissions from natural gas production – can offset the greenhouse gas emissions of natural gas. Today, natural gas reduces power plant CO2 emissions by about 50% when it replaces coal in electricity generation. This is the primary reason U.S. GHG emissions have dropped since 2005 and will continue to provide climate benefits until CCUS technology is widely deployed to help offset gas-fired power generation emissions entirely. The U.S. also has an abundant supply of natural gas; recent estimates project that the U.S. has the equivalent of 84 years of gas. This means that we not only have ample supply to meet our domestic needs, but have additional supply to export as liquified natural gas (LNG). 

LNG is simply natural gas that is supercooled so that it condenses into a liquid state, making it much more dense and therefore easier and cost-effective to transport by ship. The economic benefits of exporting LNG are numerous. A 2018 study by NERA for the Department of Energy found that provided the U.S. maintains conditions conducive to natural gas production and transport, LNG exports will have positive economic impacts on gross domestic product (GDP), household income and consumer welfare, with minimal upward impact on domestic gas price. This would require a more supportive stance from the Federal Energy Regulatory Commission (FERC) which recently added barriers to pipeline permitting.

There are significant climate benefits to LNG exports as well. Like the U.S., the rest of the world will witness a decades-long transition to 100% zero-emission sources of energy. Scenarios to achieve net-zero emissions in 30 years – like the International Energy Administration’s (IEA’s) – are by their own account, extremely aggressive, and assume significant use of natural gas, along with growth in CCUS. So, as we transition, nations around the world will be able to make progress towards their climate goals by switching from coal to cleaner burning natural gas. U.S. LNG exports can help make that possible.

Last but certainly not least, there are huge geopolitical benefits to U.S. LNG exports. One only needs to look at the way Russia is using natural gas as a weapon in eastern Europe today. Even without an operational Nord Stream 2 natural gas pipeline to Germany (Germany announced on Tuesday that it would suspend approval of the pipeline) Russia has manipulated gas supplies to the EU, undersupplying the regional gas market to make them less likely to oppose Russian aggression in Ukraine for fear of a price spike or even an energy supply shortage. While now in full support, Germany in particular was slow to join the United States in strong threats of sanctions in response to Russian aggression in Ukraine. Had the EU had pre-existing LNG import relationships with countries around the world, like the U.S., that greater diversity of supply would have left Russia with little ability to use its gas supply as a geopolitical weapon.

We must keep in mind that our goal as a nation should focus on achieving net-zero emissions, not the elimination of fossil fuels. Technology development is paramount in this effort, especially the development of technologies like CCUS that can offset the emissions from fossil fuels that will necessarily continue to be part of our energy future for decades. And throughout this energy transition, we must continue to promote the development and export of natural gas, our cleanest fossil fuel which can contribute to a global reduction in carbon emissions benefitting the environment, our economy and our national security.


Tags: CUSS, Energy, FERC, Natural Gas, Nord Stream 2
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