Immediate reactions to the government decision have been predictable. Some environmental organizations hailed the announcement as a much-needed course correction, arguing that it could help the US meet its global climate commitments. Industry trade groups, in turn, have attacked the decision. They insist it’s a counterproductive way to cut greenhouse-gas emissions, and one that will undermine the nation’s energy security at a moment of growing geopolitical volatility.
Who is right? Turns out we are asking the wrong question.
What is important is not the absolute emissions associated with any given cargo ship full of LNG that departs from the US, the largest exporter of the product. Rather, when the fuel is exported, the net climate impact depends on what it replaces in the importing country, and whether realistic alternatives produce more or less greenhouse gas.
Consider this: The Russian war on Ukraine spurred dramatic growth in US exports of LNG to Europe. That gas was used primarily in the power sector to keep lights and heat on. In a parallel universe that did not see Russian aggression, the likely scenario would be a Europe that continued to purchase gas from Russia. Yet, as evidence shows, Russian natural gas is associated with higher methane emissions compared with the US natural-gas supply chain. That’s mainly because of Russia’s particularly leaky natural-gas infrastructure, which allows vast amounts of the potent greenhouse gas to escape into the atmosphere. In this context, replacing piped Russian gas with US LNG likely reduced overall carbon emissions, even with the added emissions from shipping the fuel across an ocean.
Or let’s take another example: US LNG exports to India are first used for applications such as fertilizer manufacturing or heavy industry, and only then in the power sector. This is because solar energy is the cheapest form of power generation in India. In addition, coal plants produce the bulk of electricity generation, thanks in part to subsidies for the sector.
Given all this, there’s no scenario in India where high-priced LNG imports can compete with coal or crowd out lower-carbon renewables. So here, too, the fuel almost certainly won’t increase overall emissions from the power sector.
None of this is to say that US LNG always reduces emissions around the world. Indeed, the entire point of the above examples is that the climate impact of the fuel depends on a variety of factors and must be evaluated on a country-by-country basis. In addition, whether or not US LNG reduces emissions on net may change over time as countries decarbonize.
There is a legitimate debate to be had about the long-term impact of US LNG exports, and whether—or under what scenarios—these exports are compatible with global climate agreements.
Over the past decade, the main way that natural gas has helped reduce emissions is by replacing dirtier coal-burning power plants. But how much longer the fuel can continue to help depends on our emissions and warming trajectories.
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