Maggie Davis contributed to this post.
Last month the U.S. Department of Energy (DOE) released two studies on the environmental impacts of U.S. liquefied natural gas (LNG) exports. According to DOE, the studies are intended to inform DOE’s decision-making process for LNG export permit applications to countries that do not have free trade agreements (FTAs) with the United States.1 The environmental impacts of LNG exports—which include greenhouse gas emissions (GHG)—are included in the criteria that DOE uses to make its public interest determinations on projects to export LNG to non-FTA countries. The studies are open for public comment for 45 days, closing on July 21, 2014.
Details of the Studies
The Draft Addendum to Environmental Review Documents Concerning Exports of Natural Gas from the United States is a literature review that focuses on the environmental and public health impacts of increased unconventional natural gas production, and on hydraulic fracturing in particular, as well as how these impacts could affect the public interest. The specific impacts considered include: water quality and quantity, air quality, health effects, GHG emissions, land use, induced seismicity, and traffic and road impacts. DOE suggests that because of the local nature of both the development and the susceptibility to each of the issues, future solutions will need to be local.2
The second study, Life Cycle Greenhouse Gas Perspective on Exporting Liquefied Natural Gas from the United States, compares the life cycle GHG emissions of natural gas and coal from different sources that are used for power generation in Europe and Asia. Specifically, the study compares U.S. LNG with pipeline natural gas from Russia, LNG from Australia, and coal from Europe and Asia. The life cycle analysis begins with the extraction of natural gas or coal and ends with the electricity delivered to the consumer. To accomplish this, the study employs four scenarios in two distinct geographies: Europe and Asia. The geographies were selected because they are likely to be importers of coal and/or natural gas both now and in the future.3 The scenarios are described below:
- Natural gas is extracted in the United States from the Marcellus Shale, transported by pipeline to a facility where it is liquefied and loaded on to a freighter, transported again to a port in the receiving country where it is re-gasified, and transported to a power plant.
- Natural gas is obtained from a regional source relative to the destination and is transported either via pipeline or as LNG.
- Natural gas is produced in the Siberian Region of Russia using conventional extraction methods and is transported by pipeline to Europe or Asia.
- Coal is obtained from a regional source in Europe or Asia.
A key finding of the life cycle analysis is that on the basis of a 100-year global warming potential (GWP), power generation using imported natural gas has lower life cycle greenhouse gas emissions than power generation using regionally-sourced coal.4 Specifically, on a 100-year GWP basis, natural gas power is 25 to 61 percent less than coal for Europe and 18 to 59 percent less than coal for Asia.5 An additional conclusion of the study is that while the majority of GHG emissions come from combustion at the power plant, the share of total emissions from the supply chain varies by fuel. For example, in the natural gas scenarios, supply chain emissions comprise roughly one-third of total emissions, compared to 1.3 percent of total emissions in the coal scenarios.6 Finally, the authors indicate that methane leakage is a key factor in both of the natural gas scenarios considered in the analysis due to the fact that on a 100-year GWP timeframe methane has 21 times the GWP of carbon dioxide.7, 8
Source: U.S. Department of Energy, Office of Fossil Energy, “Life Cycle Greenhouse Gas Perspective on Exporting Liquefied Natural Gas from the United States,” May 29, 2014, Tables A-3 and A-4.
Implications for Future LNG Export Authorizations to Non-FTA Countries
According to DOE the final studies, along with any public comments on the drafts, “will be considered by the Department in its public interest determinations in connection with applications to export LNG to non-FTA countries.”9 Stakeholder reactions to the studies—and to the life cycle analysis in particular—have been wide-ranging. Advocates for expanded LNG trade cite the study conclusions as further confirmation that U.S. LNG will lower GHG emissions when it displaces coal in the electric power sector.10 On the other hand, those opposed to LNG exports have suggested that the results of the study could shift if the assumptions that DOE used on methane leakage rates from natural gas production prove to be too low.11 Finally, there is uncertainty over how the studies will impact DOE’s public interest determination process for countries that do not have free-trade agreements with the United States. It is unclear how DOE will weigh the study findings on GHG emissions and environmental impacts against other factors that it considers when determining if exports are in the public interest, such as impacts on domestic natural gas supplies, demand, and prices, the economy, balance of trade, and national security.
Maggie Davis serves as a summer intern with BPC’s Energy Project.
1 For background on the DOE’s LNG permitting process, see https://bipartisanpolicy.org/blog/energy/2014/06/12/doe-proposes-major-reforms-lng-export-permitting-process.
2 U.S. Department of Energy, Office of Fossil Energy, “Addendum to Environmental Review Documents Concerning Exports of Natural Gas from the United States,” May 29, 2014, http://energy.gov/sites/prod/files/2014/05/f16/Addendum_0.pdf, p. 2.
3 U.S. Department of Energy, Office of Fossil Energy, “Life Cycle Greenhouse Gas Perspective on Exporting Liquefied Natural Gas from the United States,” May 29, 2014, http://energy.gov/sites/prod/files/2014/05/f16/Life%20Cycle%20GHG%20Perspective%20Report.pdf, p. 2.
4 Global warming potential is a measure of the total energy that a gas absorbs over a particular period of time (usually 100 years), compared to carbon dioxide. For more details, see http://www.epa.gov/climatechange/glossary.html#G.
5 U.S. Department of Energy, Office of Fossil Energy, “Life Cycle Greenhouse Gas Perspective on Exporting Liquefied Natural Gas from the United States,” May 29, 2014, http://energy.gov/sites/prod/files/2014/05/f16/Life%20Cycle%20GHG%20Perspective%20Report.pdf, p. 12.
6 Ibid, p. 10.
7 United Nations Framework Convention on Climate Change, “Global Warming Potentials,” https://unfccc.int/ghg_data/items/3825.php.
8 According to the study, “the increased percentage of methane emissions is the result of larger methane leakage due to the longer pipeline distance.” p. 11
9 U.S. Department of Energy, Office of Fossil Energy, “DOE LNG Exports Announcements,” May 29, 2014, http://energy.gov/fe/doe-lng-exports-announcements-may-29-2014.
10 Northey, Hannah. Greenwire, “NATURAL GAS: DOE’s climate report roils export debate,” June 10, 2014. E&E News, http://www.eenews.net/greenwire/stories/1060001040/.