September 16, 2019 Read More →

IEA’s Birol: Methane leaks, flaring are ‘Achilles heel’ for LNG industry

S&P Global Market Intelligence ($):

The growing U.S. LNG industry can help drive down global carbon emissions by displacing coal with exports to world markets, the head of the International Energy Agency said, but he warned that oil and gas companies could undermine that future if they are “greedy” when it comes to investments to reduce carbon emissions.

Such investments, even those driven by stringent regulations, would have a nominal impact on the average cost of gas production, IEA Executive Director Fatih Birol said at an industry event organized in Washington D.C. by the American Petroleum Institute, the Center for Liquefied Natural Gas and LNG Allies. Birol estimated the average cost of production would increase by a maximum 7% in the most difficult case.

“In my view, companies should not be so greedy,” Birol said. “When you look at the future, the Achilles heel of the gas industry is the methane emissions. And the good news is for the industry, this can be fixed by existing technology, only using the best practices. And I can tell you that many companies are taking this seriously.”

Minimizing methane emissions would have gas play a bigger role in reducing air pollution and aiding energy transitions, Birol said. Longer-term planning for the adoption of hydrogen, biomethane and carbon capture utilization and storage will enhance the sustainability and social acceptance of gas infrastructure.

Representatives of the U.S. LNG industry also zeroed in on the importance of methane reductions during the Sept. 12 conference. Representatives of LNG pioneer Cheniere Energy Inc., fellow exporter Sempra Energy, and export hopefuls Tellurian Inc., NextDecade Corp. and LNG Ltd. said the oil and gas sector needs to step up on reducing carbon emissions as the LNG industry promotes the climate benefits of American natural gas.

U.S. LNG veteran Octávio Simões, senior adviser to the CEO of Tellurian, advocated for measures to end the widespread flaring of natural gas. “We cannot afford to be saying gas is a great fuel for lowering CO2 emissions and then burning 1 Bcf of gas in the basins,” Simões said. “It just doesn’t make any sense.”

More ($): U.S. LNG industry sees curbing emissions as key to its long-term future

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