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US LNG rebrands with vows to be greener

  • Market: Emissions, Natural gas
  • 07/06/21

US LNG developers are promising that a second wave of proposed projects will have a far smaller carbon footprint, as they compete for business with climate-conscious customers and reposition under President Joe Biden.

Project developers are pledging to build carbon capture and storage (CCS) facilities to handle emissions from the energy-intensive liquefaction process for facilities proposed on the US Gulf coast. Some are exploring the idea of requiring suppliers to certify that feedgas is "responsibly sourced" in order to control methane emissions, as they try to assuage concerns from prospective customers that signing long-term contracts to take US LNG could make it harder, not easier, to reach climate goals.

The climate-forward strategy by the industry comes after the EU set more ambitious goals under the Paris climate accord and has been considering a border-adjustment tax tied to carbon emissions. The sector is keen to avoid a repeat of last year, when French gas and power firm Engie ended talks on a long-term supply deal with US firm NextDecade because of concerns over the emissions profile of US gas. "That image cannot be changed by public relations campaigns or similar means," industry group LNG Allies chief executive Fred Hutchison says. "What is required and what the industry is doing is reducing its greenhouse gas footprint measurably and transparently."

US firm Venture Global said in late May that it plans to develop CCS facilities to capture 500,000 t/yr of CO2 from its 10mn t/yr Calcasieu Pass LNG export project, which has received a final investment decision, and its proposed 20mn t/yr Plaquemines LNG export project. NextDecade says it plans to store up to 5mn t/yr of CO2 from its planned 27mn t/yr Rio Grande LNG export terminal in Texas.

But liquefaction accounts for less than a fifth of the carbon emissions of producing, processing and transporting natural gas to the EU, according to a 2019 study by the US Department of Energy. More than 60pc of those emissions come from operating gas wells, gathering lines and long-haul pipelines.

Biden's push to start regulating methane could cut the emissions intensity of US LNG in the coming years. But developers are looking for faster ways to offer assurances to customers. NextDecade says it will acquire feedgas for Rio Grande that is certified on its low-emissions profile. US LNG company Cheniere plans to offer emissions data for cargoes from next year. "There is pressure on LNG providers to do something about the total emissions," gas certification firm Responsible Energy Solutions founder Roy Hartstein says.

From Russia without love

Biden has not embraced US LNG in the same way as former president Donald Trump, who made it his mission to promote US "freedom gas" around the world. But the Biden administration views it as a better alternative to European allies increasing their dependence on imported gas from Russian by completing the Nord Stream 2 pipeline. US energy secretary Jennifer Granholm told lawmakers last month that the pipeline would carry "the dirtiest form of natural gas on earth", partly because of a lack of transparency on upstream methane emissions. The White House is pressing US LNG developers to reduce their emissions, but the industry says it is still unclear exactly what position Biden is taking. "The picture is not fully focused," LNG Allies' Hutchison says.

Moscow has fired back at the criticisms. Deputy prime minister Alexander Novak says the natural gas that Russia supplies to Europe through the existing Nord Stream pipeline has an "almost four times smaller carbon footprint" than US LNG imports.


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