Baba's Explainer - LNG & its climate impact

Syllabus

Context: The EU is moving itself off piped Russian gas by rapidly expanding imports of liquified natural gas, much of it fracked in the US.

As liquified natural gas tankers carrying fracked US gas start to land in northern Germany, climate activists are calling it a major setback in the effort to limit global heating.
LNG is to compensate for lost Russian gas supplies, with four new terminals set to come online in Germany alone.
But though touted as a short-term fix, many fear the gas is here for the long haul as the EU becomes the biggest LNG importer in the world.

What is Liquified Natural Gas or LNG?

LNG is natural gas reduced to a liquid state (liquefaction) through intense cooling to around -161 degrees Celsius (-259 Fahrenheit). This liquid gas is 600 times smaller than the original volume and is half the weight of water.
The compressed fossil fuel, which is constituted almost wholly of methane — a potent greenhouse gas —, can be transported around the world by ship.
After arriving at its destination, the cargo is regasified in a floating terminal and redistributed through pipelines.
But despite LNG’s export potential, the high cost of liquefaction and producing LNG has limited its market.
In Germany, the estimated cost of building floating LNG terminals for imports to substitute Russian gas has doubled, due in part to higher operating and infrastructure costs.
The cooling, liquefying and transport processes, as well as the post-transport regasification procedures, also require a lot of energy. Between 10-25% of the energy of the gas is being lost during the liquefaction process.

What’s the climate impact of LNG?

A lot of energy is required to extract natural gas from a reservoir, to transport from the gas field to the LNG facility for processing, to chill gas to such low temperatures, and to hold it at that temperature before it is warmed and regasified following a long sea or train journey.
Methane loss across the supply chain risks also contributes to LNG’s high emissions.
Because of LNG’s much more complex production and transport process, the risks of methane leakages along the production, transport and regasification chain are simply much higher and therefore much more emissions-intensive.
In the end, LNG emits “about twice as much greenhouse gas as ordinary natural gas,” notes the US-based nonprofit Natural Resources Defence Council (NDRC).
Experts also opine LNG is so energy- and carbon-intensive that it can create almost 10 times more carbon emissions than piped gas.
The numerous stages required to take LNG from the wellhead to the market lead to a “very high imported emissions intensity” in comparison to piped gas, whose emissions are limited to upstream and transport and processing.
The emissions intensity of piped gas from Norway in particular is almost 10 times less than average LNG emissions
Meanwhile, LNG emits 14 times as much carbon as solar power when producing the equivalent amount of energy, and 50 times as much carbon as wind power.

Can new LNG terminals be used for green hydrogen down the track?

The floating LNG terminals now going online in Germany and already established in the Netherlands, France and Belgium are not able to be adapted into infrastructure for green hydrogen, say climate researchers.
The narrative of H2 [hydrogen] readiness is simply false. They are classically fossil-fuel plants that are no good for climate protection
Any LNG terminals that are built need to be easily retrofitted for green hydrogen to fast-track the clean energy transition

Will LNG keep gas prices lower and assure supply?

By the end of the decade, additional costs for Germany’s gas imports could reach up to €200bn ($212bn), doubling gas bills for consumers.
Cheaper sustainable energy sources could instead make up the current gas deficit.
Comprehensive energy efficiency upgrades in buildings and electric heat pump instalments will also “turbocharge” the energy transition
There is a corresponding fear that LNG infrastructure overcapacity and long-term regasification contracts at German LNG ports will lead to stranded assets — while simultaneously delaying the phase-out of fossil fuels.
- The new planned terminals could expand capacity by two-thirds above what the nation consumes. This would not only be in conflict with Germany’s national climate targets but would “constitute a breach of national legislation and international commitments under the Paris Agreement
Promoting energy efficiency and renewable power is the sustainable solution to the shortfall in Russian gas, insist experts. “By investing in building efficiency alone, Germany can save more gas than new LNG terminals offer.

Main Practice Question: What is Liquified Natural Gas (LNG), and how it impacts the climate?

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Baba’s Explainer – LNG & its climate impact