France’s Faux Pas on Importing U.S. LNG
Posted October 30, 2020
Natural gas has been the key to lowering U.S. energy-related carbon dioxide emissions, through coal-to-natural gas fuel switching in the power sector – no other nation has reduced them more since 2000. Coupled with the progress of U.S. operators in reducing production-related emissions, it’s unfortunate that the French government recently decided to delay a potential $7 billion deal for U.S. liquefied natural gas (LNG), citing emissions.
The deal between French trading firm Engie and U.S. provider NextDecade for West Texas natural gas (converted to LNG in Brownsville) still might be signed, and let’s hope that happens.
Natural gas has been the critical difference-maker in cutting CO2 emissions in the U.S., lowering them to their lowest levels in a generation. It’s happening globally as well, seen in the chart below from the International Energy Agency, showing CO2 emissions savings from coal-to-natural gas switching in selected regions from 2010-2018:
As for production-related emissions of methane, U.S. industry initiatives, such as The Environmental Partnership, have brought together key natural gas and oil companies to continue cutting emissions as they supply affordable, reliable energy to U.S. consumers. Some facts:
- Methane emission rates from five of the largest producing regions across the U.S. fell more than 60% from 2011 to 2018, even as production in those regions skyrocketed.
- In the Permian, production surged 170% from 2011 to 2018, but methane emissions relative to production declined nearly 45%. In the Eagle Ford, production rose 140% while the methane emissions rate dropped more than 70% (see data here and here).
- A study by the National Oceanic Atmospheric Administration found that overall U.S. methane emissions have remained flat since 2006 even amid increased natural gas and oil production.
These show that industry efforts – innovating, developing new technologies and sharing knowledge – have helped reduce methane emissions. Natural gas and oil companies are highly motivated to do this since their business models are largely based on bringing natural gas and other products to consumers.
France’s action would be a significant shift from where it has been trending recently. According to the International Gas Union, France imported 15.6 million metric tons (MMT) of LNG last year – nearly double what it imported the year before (7.8 MMT). It’s the highest LNG import level going back to at least 2009. The chart below shows changes in LNG imports by nation, 2019 compared to 2018:
From an EU perspective, France’s move pre-empts the recently released EU Methane Strategy, which lays out a multi-year plan to develop the very baseline for monitoring, reporting, and verifying emissions that the French government is trying to apply.
In fact, Europe has trended toward increased natural gas use and fuel switching from coal over the past year. LNG imports approached record highs in 2019, with Europe importing nearly 40% of all U.S. LNG cargoes. European coal use fell 24% last year, and experts project about half that decline was driven by low-cost natural gas. As in the U.S., coal use in Europe is falling even more rapidly this year. For example:
- Spain – Coal’s share in electricity production fell 70% in 2019. This year, it has fallen another 60%. With coal facing stiff competition from affordable natural gas and rising renewables, the country has decided to permanently shutter nearly the entire fleet of coal-burning power plants.
- Germany – Low-cost natural gas is outcompeting even very cheap – and very dirty – lignite coal.
- United Kingdom – Natural gas continues to be a major contributor to a power grid that earlier this year ran for two months without any coal generation.
- Italy – The emergence of low natural gas prices has driven an acceleration of planned coal retirements.
- Portugal – The country has moved up by two years plans to retire its coal fleet, after coal generation plummeted 95% in the first half of this year.
- Poland – While coal accounts for about 80% of power generation and nearly 100% of residential heating, in the first quarter of 2020, the country’s natural gas-fueled electricity generation increased significantly.
Again, we hope France reverses course and allows the deal for U.S. LNG to go forward. If the deal remains blocked, we suppose France will look to other suppliers, including Russia. However, a study this summer showed that LNG exports from the U.S. to Europe have GHG emissions that fall within the same range as pipelined gas from Russia. Therefore, blocking the deal would not have a significant effect on the emissions associated with France’s natural gas imports. All it would do is reduce France’s energy supply security.
That would be unfortunate. Natural gas has played a practical and integral role in lowering greenhouse gas emissions – with significant progress in the U.S. an example of what other nations could experience as well.
America’s natural gas and oil companies are at the forefront of innovations that deliver affordable and reliable energy around the world, while also reducing methane emissions through industry-led initiatives like The Environmental Partnership.
In more than 35 countries, from Asia to Europe, U.S. natural gas already is reducing emissions and enabling increased energy security, and U.S. allies are becoming less and less reliant on energy supplies from countries that may be hostile to democratic interests.
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and six grandchildren.
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