A news release last week may have gone unnoticed, but it will unintentionally increase greenhouse gas emissions. The Biden administration paused new permits on liquified natural gas exports. The move comes after pressure from environmental groups. It does not mean the US will stop the export of natural gas. The administration will review the environmental, strategic, and economic impact of LNG exported to Asia and Europe and determine if new permits should be issued. They did not state how long the pause would be in effect. One must assume that this is an incremental step to eliminate any new exports.
The goal is entirely environmental. Reducing natural gas consumption should reduce CO2 emissions. However, a ban on expanding LNG exports will have, in fact, a negative effect on the environment.
Electricity demand is increasing and will continue to increase as electric vehicle use expands. In addition, many countries are moving to heat pumps for home heating instead of oil or gas. The overall demand for electricity will grow for the coming decades. According to McKinsey, global power consumption will more than double by 2050.
The theory is that the growth can be accommodated by renewable energy, most notably, solar and wind. Natural gas is generally the counter to renewables to support the grid. What I mean by that is the when the wind does not blow and the sun does not shine, like at night, natural gas plants provide the majority of the shortfall to supply electricity to the grid.
Energy storage and grid scale batteries are not a realistic answer. There is just not enough capacity to satisfy the demand when renewables are not available. By 2030, the total solar capacity in Europe is forecast to be over 600 GW while battery storage is expected to be less than 50 GW.
Two outcomes stand out to me in the short and medium term. If European countries do not have adequate natural gas supply to provide the electricity needed, the solution would be to buy natural gas from Russia or use the next logical energy source, coal. Russian natural gas is a political win for Putin and using coal doubles the greenhouse gases compared to natural gas. Neither scenario is a favorable outcome.
The United States should view natural gas as a bridge fuel to carry the world though the great energy transition until renewables and energy storage can evolve enough to provide adequate power to the grid at all times. Until then, there is a place for natural gas in the fight against climate change.
Comments