The value-chain emissions of liquified natural gas (LNG) are lower on average than for coal-fired power generation, even when the fuel is shipped over long distances, according to new research from Rystad Energy. Natural gas that is produced and liquified in the US and shipped to Asia on return journeys of about 23,000 miles could emit up to 50% less than even the cleanest coal power plants. However, there are significant variations between US LNG sources, coal sources and types, and power plants, as well as uncertainties regarding methane emissions through both value chains.
Global natural gas production hit new highs last year – more than 4,000 billion cubic meters (Bcm) – and further growth is expected throughout this decade. Many view LNG as a core component of the energy transition and a way to wean the world off heavier fuels, especially coal, but questions over the fuel’s total value-chain emissions persist.
To help answer these questions, Rystad Energy has assessed total potential emissions for coal-to-power and LNG-to-power value chains, including carbon dioxide and methane, from extraction to end-use in power plants. This research sheds light on the various factors, uncertainties, and challenges influencing total value-chain emissions of the two fossil fuels. The individual stages of the two value chains are detailed at the end of this release.
For this research, we have focused on US LNG shipped to Asia, given the United States’ dominant role in the global LNG market. By 2030, global LNG supply is expected to approach 850 Bcm annually, around 30% of which will likely come from the US. Gas demand in Asian markets is expected to remain strong, and LNG will be a key competitor to coal in power generation.
Greenhouse gas emissions from the energy sector are high on the agenda among governments, operators, and other stakeholders. From a carbon dioxide perspective, the coal value chain has a significantly higher emission footprint than LNG, primarily due to end-use emissions. However, when adding methane emissions, major uncertainties are introduced. Historically, methane inventories have generally been calculated using engineering-based factors, but recent developments in measurement technologies, such as satellite imagery, have improved the accuracy. New measurement technologies have revealed that methane emissions are likely higher than anticipated in the oil & gas and coal value chains. The enduring uncertainties in methane monitoring are the main reason for varying outcomes and conclusions in recent studies of gas and coal value-chain emissions.
Discussions around leakage rates from upstream and midstream infrastructure and the potency of methane as a greenhouse gas can lead to different conclusions on using natural gas as a transition fuel. One of the key challenges in assessing methane emissions in the LNG and coal value chains is the lack of granular and high-quality measurement data. Even though the trend is positive with respect to on-site monitoring and other measurement technologies like satellite sensors, most available methane emissions data is modeled based on generic equipment and component factors. Rystad Energy’s emissions data supplements reported and modeled emissions data with global satellite methane plume analysis. There are still uncertainties and limitations with satellite monitoring, however, for instance related to the detection threshold as smaller methane plumes are not registered by satellites with global coverage.
Accurately quantifying emissions for any energy source is essential to understanding its full environmental impact. As the global focus swings towards methane emissions, and the wealth of credible data grows from more granular satellites and increased on-site measurements, the uncertainty within the methane data will begin to contract. With more data and measurement options for methane, consumers and buyers who want to ensure that gas cuts emissions compared to coal will be in a better position. With the introduction of emissions policies globally, such as methane regulations and potentially carbon border adjustment mechanisms, gas supplies from different sources could soon see price differences depending on carbon competitiveness.
Learn more with Rystad Energy’s Emissions Solution.
Rystad Energy has created high-case and low-case scenarios for both LNG and coal emissions to illustrate the complexities of the evaluation. The low case for US-Asia LNG is an estimate of the lowest potential value-chain emissions, with upstream production in the Appalachian basin, processing at an electrified liquefaction plant, shipping through the Panama Canal to minimize sailing distance, and end-use power generation at an ultra-efficient power plant. The high case…
Read More: U.S. LNG Shipped to Asia Is Still Cleaner Than Coal