Low-Energy Fridays: Un-Science-Based Climate Policy

The Biden administration is considering climate reviews for natural gas exports, ostensibly because natural gas is a carbon-intensive fuel. In theory, restricting its exports would limit the use of carbon-intensive fuels abroad and improve climate outcomes. This seems like a good climate policy on the surface, but an analytical view shows that it is likely to worsen climate outcomes, human health outcomes, and economic and energy security outcomes.

Natural gas is a carbon-intensive fuel, having about half the carbon dioxide emissions per unit of energy as coal when combusted. Despite its emission intensity, natural gas satisfies a similar role on power grids as coal, able to ramp energy production up and down as needed. Although renewables and battery storage can fill a similar role, the high cost of batteries means that it is rarely practical—even wealthy climate-conscious states like California import lots of natural gas. Consequently, natural gas primarily competes with coal. In fact, most emission abatement in the U.S. power sector is attributable to natural gas replacing coal, not renewables.

Making it harder to export natural gas, or outright preventing the export of natural gas, is likely to result in customers that would have purchased U.S. natural gas instead relying on coal since renewables and battery storage are not currently cost-competitive. In addition, many potential customers already have natural gas power plants that they do not intend to retire. This is one of the reasons the Obama administration concluded that constraints on U.S. offshore natural gas production would increase global emissions. Additionally, analysis from the National Energy Technology Laboratory (under the Department of Energy) found that U.S.-exported liquefied natural gas (LNG) has lower life-cycle emissions than foreign competitors: U.S. LNG exports to Europe are 29 percent lower greenhouse gas (GHG) emissions than Russian gas, and 32 percent lower than Russian gas to Asia.

Simply, the research consistently shows U.S. natural gas exports lower GHG emissions by displacing coal and higher-emitting foreign producers. It’s hard to imagine a scenario where the administration’s proposed climate review could find U.S. LNG exports as worsening climate outcomes, but the mere presence of the climate review will constrain U.S. LNG exports by adding a new step in the process and ironically drive potential customers to purchase gas from other sources or use coal instead.

Additionally, while all the focus is on climate change, it is important to keep in mind that it is not the only consideration for pollution from electricity production, and “criteria air pollutants” have more immediate and direct human health impacts. Compared to coal, natural gas has 82 percent lower nitrogen oxides, 99.8 percent lower sulfur dioxide, and about 65 percent lower particulate matter emissions. If climate reviews make it harder for foreign customers to purchase natural gas and lead to them using coal instead, human health impacts would worsen.

And lastly, there is also an economic and energy security concern at play, which was front and center after Russia’s invasion of Ukraine. Natural gas consumption globally is rising, attributable to low prices, improving efficiency of natural gas power plants, and its far lower rates of air pollution compared to coal. The world’s largest natural gas exporters are the United States, Australia, Qatar, and (importantly) Russia. Europe has been trying very hard to wean itself off Russian gas, but if the United States can’t supplant Russian gas, then a repeat of European dependence on Russian energy production is likely.

And economically, it should go without question that if the United States is producing and selling a product, that has economic benefits to Americans as well as to customers. Making it harder to produce and sell means a weaker economy; there’s no getting around basic economics.

All in all, the proposed policy from the Biden administration seems based more on political sentiments and animosity toward natural gas as it ignores the considerable research and science showing U.S. natural gas production has benefits. There is obviously more to this debate than addressed here (we haven’t even touched fugitive emissions), but the broader point is that policy needs to be informed by quality analysis. If we saw compelling analysis that showed U.S. natural gas exports worsen climate outcomes, the administration’s latest moves would make sense. Instead, the research shows the opposite. There should be a high threshold for dismissing the existing reputable governmental analysis that is supposed to underpin policymaking.