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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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The True Cost Of “Freedom Gas”

The reputation of natural gas as a clean fuel has been repeatedly undermined by unfavorable emissions data. But now, several new studies suggest that the problem could be even bigger than we imagined.

Do these studies paint an accurate picture of LNG, or are they just more anti-fossil fuel hype? 

The short answer is: it’s complicated.

The University of Texas at Austin earlier this month warned that the expansion of oil, gas, and petrochemical infrastructure along the Gulf Coast could add half a billion tons of greenhouse gas emissions to America’s total every year by 2030. This, the UT said, was equivalent to 8 percent of the country’s current total in emissions and would come from new refineries, petrochemical plants and, perhaps a little unexpectedly for the layperson, liquefied natural gas plants.

Touted as “freedom gas” by the Donald Trump administration, LNG has quickly turned into a major export commodity for U.S. energy companies. Indeed, LNG as a fuel burns a lot more cleanly—with a lot less emissions—than oil derivatives. But its production turns out to be a different matter.

In early January, the Environmental Integrity Project released a report that, although a little less pessimistic than the UT’s, was still concerning. It said oil and gas companies and related businesses have permits or have applied for permits for facilities that would add 227 million tons of greenhouse gas emissions by 2025.

Only a minority of these additional emissions are to come from new drilling: just 36 million tons. The total additional emissions would be a 30-percent increase on the GHG emissions total of the oil and gas industry for 2018. Related: As Gas Prices Crash, Will This Shale Giant Survive?

Of this total, the Environmental Integrity Project said, the largest growth would come from LNG plants.

In 2018, there were eight operating LNG export terminals in the United States. These released seven million tons of greenhouse gases during that year. The amount was more than a tenfold increase from 2016. Now, there are 18 new LNG export terminals planned to be built along the Gulf Coast, plus one plant inland, according to the report. These, if all are built, could add 80 million tons of greenhouse gases to total annual emissions from the fossil fuel industry. This, the EIP warns, would be an increase of 100 times over ten years.

The latest to add to the LNG gloom was Bloomberg. In an analysis published last week, the news and intelligence firm said the 11 LNG plants approved by President Trump could add 78 million tons of carbon dioxide to total U.S. emissions, plus quite a lot of sulfur dioxide, and methane—by-products of the liquefaction process that basically cools natural gas to superlow temperatures so it can liquefy.

Then, Bloomberg continues, there are emissions associated with the transportation of the natural gas from the wellhead to the liquefaction train and from there to its destination overseas. Even operating an LNG plant has a carbon footprint comparable to that of a coal plant, with the comparison not too flattering for LNG. The analysis of the data that Bloomberg used showed that the 11 new LNG plants, if built, would emit as much carbon dioxide as 24 coal plants.

Not All Emissions Doom and Gloom

Luckily for the environment, there is a bit of good news. The emissions levels of different LNG plants vary greatly. The Cameron LNG plant, for instance, could release as much 328,000 tons of carbon dioxide per 1 million tons of LNG it exports when it becomes fully operational. Yet the Annova LNG terminal in Texas would emit only 59,000 tons of CO2 for every 1 million tons of LNG it exports.

The differences may have a lot to do with how these facilities cool the gas. Oilprice spoke to an expert from Yamal LNG, Mehdy Touil, who said the main source of greenhouse gases in an LNG train comes from the combustion of gas—methane—in the turbines that drive the refrigeration compressors. Methane emissions from LNG trains are negligible because every facility has gas detectors.

CO2 emissions are also generated from other gas processing equipment at the facility. But even with these emissions, Touil noted, LNG plants are a smaller polluter than coal-fired power plants. And those that opt for electric motors instead of gas turbines have an emissions footprint of “next to zero”. Related: US Oil Rig Count Inches Higher As Production Hits 13 Million Bpd

One terminal operator, Freeport LNG, for example, said it planned to cut its emissions by 90 percent compared with other LNG exporters by switching to electric motors from combustion turbines. Touil called Freeport LNG the first eLNG plant.

Two Canadian projects, LNG Canada and Woodfibre LNG, Touil added, plan to source their energy for refrigeration entirely from hydropower, which would be another way to reduce the dominant source of emissions from the production of LNG.

It seems to also depend on location, too. Cheniere Energy, the largest LNG producer in the U.S, emits less from its Corpus Christi LNG terminal, which draws electricity from the grid, than from its Sabine Pass terminal, which makes its own power. 

The Clean Fossil Fuel Myth?

All these studies are making one thing clear yet again: there is no clean fossil fuel. In fact, some would argue that natural gas is even more problematic than oil in that its production and transport is accompanied by methane leaks, and methane is a lot more harmful to the atmosphere than carbon dioxide. Will all these revelations halt the LNG boom, not just in the United States but across the globe?

Hardly.

The truth is that although it is far from emission-free, liquefied natural gas is less polluting than coal. Bloomberg’s comparison between an LNG plant and a coal plant is evidence of that. What’s more, the studies warning against LNG terminals’ emission potential only focus on the production of LNG rather than its use. The reason LNG has become so popular as an alternative to coal is that it does burn a lot more cleanly than coal. Perhaps the emissions produced during the liquefaction process could be offset by the emissions not released by coal plants because they have switched to LNG. 

By Irina Slav for Oilprice.com

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