Low-Energy Fridays: Is Natural Gas Worse for the Climate than Coal?

An ongoing debate in climate policy surrounds precisely what the comparative greenhouse gas (GHG) emissions are between natural gas and coal. Given the Biden administration’s liquefied natural gas (LNG) export pause, the debate has moved prominently into the public square.

Past Low Energy Fridays have explained why the LNG export pause doesn’t make sense from a climate or economic perspective, but the climate argument hinges upon research showing that natural gas has substantially lower GHG emissions than coal. Some defenders of the administration’s moves argue that LNG exports are worse for climate than coal, citing recent research. Who is right?

Because coal and natural gas have different supply chains, comparing them requires a “lifecycle assessment” of their emissions. This entails all the emissions associated with their consumption, including the emissions involved in producing and transporting the energy. These contain many variables, but perhaps the most important is the “leakage rate” of natural gas when produced, also called “fugitive emissions” or “loss rate.”

Since natural gas is just methane, and methane is a potent GHG, if natural gas producers fail to prevent leakage in their production, the total emissions of natural gas can be much higher than some estimates suggest. Methane has more than 28 times the warming potential of carbon dioxide, so even relatively small changes in leakage rates affect the lifecycle emissions significantly. To be more precise, the range of loss rates are generally estimated at between 0.6 and 9 percent. As a rule of thumb, a loss rate higher than 3 percent would make natural gas worse than coal for climate. Technically, the official average reported by the Environmental Protection Agency is 1.65 percent.

In a recent study from Cornell University that claims LNG is worse than coal, a big chunk of the increased natural gas emissions comes from assuming a fugitive emission rate of 2.6 percent. The authors arrived at this number by averaging prior studies, but the problem with this approach is that the methodology for accurately measuring fugitive emissions is not settled.

There are two methods used to measure fugitive emissions: either at the source or from above via satellites or drones to measure gas concentration. Source, or “bottom-up” estimates, show lower loss rates and aerial “top-down” estimates show higher ones. Proponents of the top-down approach argue that they fully capture emission estimates that aren’t captured by the bottom-up approach. Opponents argue that the top-down approach is flawed because it may not accurately distinguish between methane emissions from natural gas production and the often-nearby oil-production infrastructure, nor does it distinguish between artificial and natural sources of methane.

The 2.6 percent estimate from the Cornell study comes from exclusively relying on averaging top-down estimates, so if top-down studies are flawed, the resulting average will reflect that, even if it appears to be underpinned by credible research. Interestingly, the harshest critics of the methodology used in the Cornell study have not been industry, but the left-leaning Clean Air Task Force (CATF), which disputes assertions that natural gas used for the production of hydrogen is worse for the climate, primarily critiquing the heavy lifting that the top-down methodology plays in upping the lifecycle GHG estimates for natural gas. Notably, CATF’s critique was of an earlier version of the Cornell study that used a 3.5 percent rate of loss, which has since been revised down to 2.6 percent.

But here’s the important thing to keep in mind: The idea that we shouldn’t export natural gas if high fugitive emission rates make natural gas worse for the climate than coal is exactly the wrong conclusion. This is because what these studies reveal is that reducing fugitive emissions keeps natural gas lower emissions than coal. Some natural gas producers have loss rates as low as 0.3 percent, and there is an industry target of 0.2 percent. Additionally, because methane has value when sold as natural gas, producers have an incentive to limit fugitive emissions to increase revenues, as well as to avoid the methane fee introduced in the Inflation Reduction Act.

The relevant conclusion from the Cornell study and others is that fugitive emissions are a potentially major source of GHG emissions, and the relevant policy conclusion is that low-cost opportunities to abate fugitive emissions should be prioritized. The policy debate around the LNG export pause, which focuses on technological tribalism, is misaligned with the stated objectives of cutting GHG emissions.