Is LNG worse for the climate than coal?

Good morning and welcome back to Energy Source, coming to you today from New York.

My Financial Times colleagues in China have reported that cheap natural gas is causing Chinese truckers to switch to rigs powered by the fuel, weighing on the country’s appetite for oil. Analysts have said Chinese demand for diesel may have peaked earlier than expected, in a troubling sign for traders who remain concerned over weak oil demand in the world’s second-largest economy.

Today’s Energy Source looks at an academic paper that influenced the Biden administration’s decision to pause liquefied natural gas exports to non-free trade agreement countries in January. The paper, which reports that LNG generates more greenhouse gases than coal, has been published and peer reviewed, backing those opposed to the expansion of LNG export facilities in the US.

Thanks for reading,

Alexandra

Research on LNG’s climate impact ignites political firestorm

An academic paper that influenced the Biden administration’s pause on new liquefied natural gas projects after reporting that LNG generates more greenhouse gases than coal has had its findings peer reviewed, sparking a renewed clash between environmentalists and industry over the fuel’s impact on the environment. 

Robert Howarth, a professor at Cornell University and an expert in methane, argues in the study that the emissions footprint of LNG exceeds that of coal by 33 per cent over a 20-year period, challenging the oil and gas industry’s assertion that the fuel is cleaner than coal.

“Even though carbon-dioxide emissions are greater from burning coal than from burning natural gas, methane emissions can more than offset this difference,” writes Howarth in the paper, which was published in the journal Energy Science and Engineering. “As a greenhouse gas, methane is more than 80 times more powerful than carbon dioxide when considered over a 20-year period.”

Howarth writes that LNG, which is largely produced from shale gas, emits a “substantial amount of methane” that increases during liquefaction and tanker transport of the fuel.

“The world is spiralling towards a climate catastrophe,” Howarth told Energy Source in an interview. “Since LNG has a larger climate impact than any other fossil fuel, we should move away from it immediately.”

The paper has generated a political firestorm since it was first published in draft form last year, as it challenges a core tenet of the rapid expansion of the global LNG industry: that displacing coal generation with gas is helping the world to decarbonise.

The initial draft played a critical role in persuading the Biden administration to pause approvals of new LNG export terminals in January. The Department of Energy recently initiated its own study on the environmental and economic impact of the US industry, which leapfrogged Qatar to become the world’s largest LNG exporter in 2023.  

The results of Howarth’s study, which was part funded by the Park Foundation, an environmental group, contrast sharply with reports backed by industry groups, which assert the fuel is cleaner than coal and a bridge fuel to renewables. The divergence in views over LNG’s environmental impact is evidence of growing divide between advocates and opponents of the fuel that is falling along political lines.

It also deviates from the results of a 2019 study commissioned by the US government, that determined the use of US LNG for power production in European and Asian markets would “not increase greenhouse gas emissions” from a life cycle perspective.

“We have no problem at all with this [Howarth] study and other studies being factored into DOE’s overall evaluation. The frustrating aspect is that it seems as if this study and this study alone was what motivated this unprecedented shift in policy that up until March of this year had been bipartisan,” Dustin Meyer, senior vice-president of policy, economics and regulatory affairs at the American Petroleum Institute, said.

Republicans in Congress have slammed Howarth’s research as flawed and criticised the Biden administration for taking it into consideration when it implemented January’s pause.

Howarth said his paper went through a rigorous independent review process, including four rounds of revision with six anonymous peer reviewers as well as the journal editors.

“The editors and reviewers were aware of the public interest in my results, and so were taking extra care that my paper be as of high quality as possible,” Howarth told Energy Source.

Still, some in the oil and gas industry largely disagree with the methodology behind Howarth’s findings.

“Imagine looking across all of the variables and for every single one choosing the absolute worst-case scenario assumption that you’ve ever seen and then adding them all together. And that’s the only way that you can get the results that this paper gets,” Meyer said.

Howarth acknowledges in his paper that he uses a different methodology than other studies of LNG’s impact on the climate.  

“The key reason that some of these other studies find that total emissions are lower than what I report here is their use of lower estimates for upstream and midstream emissions of methane,” Howarth wrote in his study.

Methane is a primary component of natural gas and is odourless, colourless and notoriously difficult to track. It is also a powerful greenhouse gas, more than 28 times as potent as CO₂ at trapping heat in the atmosphere, according to the US Environmental Protection Agency.

Howarth said he relied on estimates available for methane emissions from upstream and midstream sources rather than data from the EPA that was based on unverified self-reporting from the oil and gas industry and were “clearly too low compared with data derived from independent sources published in the peer-reviewed literature”.

There is growing evidence that methane emissions from oil and gas infrastructure are much higher than previously estimated, including separate reports by the Environmental Defense Fund and the Royal Society of Chemistry.   

Drew Shindell, a professor of earth science at Duke University and a climate specialist, said he believed that Howarth’s results were plausible.

“Bob’s results are plausible, and qualitatively I think they’re correct,” Shindell said. “I have been reading Bob Howarth’s papers for more than a decade. He has a proven track record of doing high-quality work and I don’t doubt that he has again done high-quality work.”

Still, Shindell added that there has not been much data collection on liquefied natural gas because it’s a new fuel compared with oil and every LNG facility varies, contributing to uncertainty over the fuel. (Alexandra White and Jamie Smyth)

Power Points

Energy Source is written and edited by Jamie Smyth, Myles McCormick, Amanda Chu, Tom Wilson and Malcolm Moore, with support from the FT’s global team of reporters. Reach us at energy.source@ft.com and follow us on X at @FTEnergy. Catch up on past editions of the newsletter here.