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June 28, 2017

How US Natural Gas Will Help Countries Meet Their Paris Commitments

  The Hill

While critics bemoan President Trump’s decision to pull out of — or renegotiate — the Paris climate agreement, the U.S. has been reducing its greenhouse gas ­emissions over the past decade. And now the country is poised to help a number of the signatory countries reduce theirs as well.

In his commitment to the Paris negotiators, President Obama “pledged” to reduce emissions between 26 and 28 percent below 2005 levels by 2025. However, the U.S. was on track to meet that goal, or close to it, even before Obama weighed in.

According to the Energy Information Administration (EIA), energy-related U.S. carbon emissions have declined from about 6,000 million metric tons in 2005 (the agreement’s baseline date) to 5,170 MMT in 2016 — a 14 percent reduction in a decade.

If the U.S. continues reducing carbon emissions at that rate, we might just meet the Paris agreement’s U.S. goal anyway.

Ironically, the U.S. natural gas production boom could help other countries meet their commitments as well.

The U.S. exports natural gas to Mexico and Canada, mostly through pipelines.

Natural gas pipeline exports to Mexico have quadrupled recently because the country realized it’s cheaper and cleaner than other fossil fuels for electricity generation. 

But to export natural gas overseas or to South America, it must be turned into a liquid by cooling it to -260 degrees. Hence, liquefied natural gas or LNG.

Fortunately, a number of private sector companies have been willing to make the enormous financial investment to build U.S. LNG terminals, but they must receive approval from numerous federal agencies.

The Obama administration habitually slow-walked LNG terminal applications, but did finally approve some. The Trump administration has indicated it plans to move much more expeditiously in handling the application backlog. 

And we can already see where the future is heading. The EIA says the U.S. exported 43,553 million cubic feet of natural gas in March.

By contrast, in March of 2016, the U.S. exported only 10,000 million cubic feet, and 23 million in March of 2015 — just two years ago.

Cheniere Energy’s LNG terminal in Sabine Pass, Louisiana, is by far the most active LNG terminal to date, releasing 18 cargos in May, a record for the company. The U.S. is projected to be a net natural gas exporter by next year, which could help lower the trade deficit that has Trump so concerned.

It’s hard to overstate the importance of this new global market for LNG.

Natural gas releases about half the carbon emissions of coal. The primary reason U.S. carbon emissions have been declining over the past decade is power generating plants have been shifting from coal to inexpensive natural gas.

By contrast, many developing countries tend to rely on coal for power generation because historically it has been the least expensive and most available option.

For example, although China is the second largest economy in the world, that is only because it has the most people. In economic terms, China is still a developing country for huge portions of its population.

In 2015 China consumed 3,732 million tons of coal, according to the Global Energy Statistical Yearbook 2016, a decline from about 4,200 Mt in 2013. India consumed 990 Mt in 2015 and the U.S. 730 Mt.

Thus, China — the country many say will become the post-Paris leader in fighting climate change — consumed more than five times the coal the U.S. consumed.

But China, along with a number of other countries, has begun importing U.S. LNG — about 30,000 million cubic feet between October and March, according to the EIA.

Egypt imported 3,600 million cubic feet, India about 10,000 million cubic feet, Japan 26,000 million cubic feet; Turkey about 11,000 million cubic feet. Even several oil-rich Middle Eastern countries have begun importing U.S. LNG.

As these and other countries try to reduce their carbon emissions in accord with their Paris agreement commitments, transitioning to natural gas power generation may be one of their first steps. And the country being widely denounced as the scourge of a cleaner climate, the U.S., may be the one to help them achieve their goal. 


 

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