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U.S. liquefied natural gas exporters are making efforts to reduce carbon emissions from new facilities as they seek to maintain new multimillion-dollar projects amid rising climate pressures.
The US has emerged as LNG export power in recent years thanks to the explosive growth of the country’s oil and shale gas fields, encouraging U.S. claims to energy independence and giving Washington a new useful tool to counter geopolitical enemies like Russia.
But for a handful of companies competing to build new projects that could boost the nation’s exports even further, global repression of emissions and methane pollution of U.S. oil and gas fields has threatened to derail its plans.
European efforts to implement a carbon border adjustment tax (which could charge a fee for higher-emission imports) is a special concern for U.S. LNG companies competing with Russia, Qatar and others in the UK. continent.
U.S. LNG project developers have tried to counter the threat by deploying expensive equipment installation plans to capture carbon from their facilities, among other measures, such as the commitment to ensure gas only from producers who control their own emissions.
Venture Global, developer of the LNG project, said last week that it plans to install carbon capture and storage equipment that could eventually trap up to 1 million tonnes of CO2 a year from a new export plant. $ 5.8 billion it is building on the Gulf Coast in Louisiana and another it hopes to approve this year.
This came after a similar announcement in March by developer NextDecade, who said it had added plans to capture and store approximately 90% of the CO2 emissions from its proposed $ 8 billion export site. the Rio Grande to Texas. He hopes to make a final investment decision on the project this year.
Carbon capture and storage, where CO2 is trapped at the site and leads to natural deposits at underground depths for storage, is often promoted by the oil and gas industry as a way to continue pumping fossil fuels to and all while the world economy is decarbonizing.
But carbon capture remains costly and has not yet been widely deployed, making U.S. LNG proposals a key test for the technology.
NextDecade said it would take advantage of federal tax credits, known as 45Q, available for carbon capture projects to help fund development, arguing that with the tax credit would only be marginally added to the facility’s production costs.
The International Energy Agency stressed the pressure on the gas industry in a recent report report arguing that meeting the government’s net clean targets would mean that many LNG facilities under construction would not be needed, as fuel demand would peak at this decade, long before previous projections.
Ross Wyeno, an LNG analyst at S&P Global Platts, said that unlike in the past, any new U.S. LNG export project that wants to be built “should include a clear strategy around emissions. carbon and methane ”.
U.S. gas executives insist natural gas, especially backed by emissions mitigation, may play a role in the transition to cleaner fuels. Natural gas emits about half of carbon dioxide when burned like coal.
“If you want to achieve the biggest emission reductions, go behind coal production and use gas to do so. . . and you can achieve massive emission reductions, ”argued Mike Sabel, CEO of Venture Global LNG at a Financial Times event last week.
But high emissions of methane, a highly potent greenhouse gas, and rampant natural gas at America’s oil and gas fields undermine green fuel credentials.
Last year, the French government intervened to cancel a possible long-term LNG deal worth about $ 7 billion between France’s Engie and NextDecade, at least in part because of concerns about methane pollution by the US. gas produced by the United States.
“This was one of the first real verifiable signs that this is much more than talk, and that many of these projects really need to deal with their emissions,” Wyeno said.
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