EU’s Canete sees US LNG contributing to carbon goals

US energy secretary Rick Perry (L) and Miguel Arias Cañete, EU Commissioner for climate action and energy, speak at a joint press conference in Brussels, 2 May 2019. [European Union, 2019]

Imports of liquefied natural gas from the US “can play a very important role for our security of supply,” and also contribute to the EU’s emission reduction goals, the European Commission said on Thursday (2 May).

(Updates with European Commission comment on carbon footprint of LNG)

Europe and the US have a “common objective” to further develop trade in liquefied natural gas, the EU’s climate and energy Commissioner Miguel Arias Cañete said yesterday, at the conclusion of the first EU-US high-level business forum on energy.

Speaking alongside US energy secretary Rick Perry, Cañete emphasised the “mutual benefit” of boosting US LNG exports to Europe – both from an energy security and climate perspective.

US LNG exports to Europe have risen by 272% since US President Donald Trump and European Commission President Jean-Claude Juncker met in July last year, according to figures published yesterday.

In the first quarter of 2019, “the EU has imported 13% of its LNG from the United States, compared to 5% last year,” taking a 35% share of US LNG exports during that period, up from 11% the year before, Cañete said.

And demand for US gas in Europe is expected to remain strong at least until 2030. EU gas imports are “projected to increase in the years to come” as domestic production in the North Sea decreases, the European Commission said in a statement.

“We expect that gas, including LNG, will continue to have an important role in the years to come, maintaining more or less the current one quarter share of Europe’s energy consumption,” said the Spanish EU Commissioner.

‘Freedom gas’: US opens LNG floodgates to Europe

US energy secretary Rick Perry will sign two export orders for liquefied natural gas (LNG) in Brussels today (2 May), in a move officials said will double America’s export capacity to Europe to 112 billion cubic meters per year as of 2020.

“Transition fuel”

Demand in Europe is also fuelled by EU goals to cut carbon dioxide emissions from energy, which are the main cause of human-made global warming.

As more coal-fired power stations are being shut, countries like Italy, Spain, Germany and the Netherlands are “likely to see a major switch from coal to gas,” according to Carbon Tracker, a think tank, noting that the UK had already largely achieved its own switch due to domestic policies.

“Natural gas will remain an important component of the EU’s energy mix in the near future as we move towards cleaner sources of energy,” Cañete said. It “will also have role in facilitating the integration of increasing amounts of variable renewable [electricity] production.”

That means demand in Europe “is projected to remain at a comparable level” in the coming years, the European Commission pointed out, saying “gas has been identified as an important transition fuel in the EU’s efforts to decarbonise its economy” in a 2050 perspective.

A study published in scientific journal Nature on 22 April, confirms “the climate benefits of the coal-to-gas shift,” saying it is “a key strategy” to mitigate energy-related CO2 emissions, which is “consistent with climate stabilisation objectives for the next 50–100 years”.

Carbon prices seen hitting €55 in 2030, hastening 'major' coal-to-gas switch

EU carbon prices are set to double by 2021 and could quadruple to €55 a tonne by 2030 if the European Union aligns its emissions targets with the Paris Agreement on climate change, according to a new report published on Thursday (26 April).

However, the Nature study also highlighted concerns about the potential undesirable side-effects of expanding natural gas production, saying it “may delay the deployment of less carbon-intensive technologies such as renewables,” which risked “postponing  the transition to a decarbonised society”.

Those concerns are shared in Europe. Speaking alongside US energy secretary Rick Perry, Cañete said that “the European Union is also strongly committed to reducing greenhouse gas emissions that cause man-made climate change.” And 75% of those emissions currently come from the production and use of energy, Cañete added in a reference to oil and gas.

No data on carbon footprint of US LNG

In private, officials say the window of opportunity for US LNG exports to Europe will start narrowing after 2030 because of the EU’s carbon emission constraint.

“From 2030 onwards, gas consumption in Europe will start to decline,” said an EU official who was briefing journalists after the EU-US meeting.

Nonetheless, there are a number of question marks regarding the carbon footprint of imported LNG, the official pointed out. Although no statistics are available, officials said it was “very clear” that imported US LNG is more carbon intensive than pipeline gas coming from Norway or Russia.

“We do not yet have such detailed information,” said Anna-Kaisa Itkonen, European Commission spokesperson for climate action and energy, when asked about the carbon footprint of imported US LNG.

“On the EU level, we do not have a system that monitors the carbon footprint of individual supply chains, though it would have its merits to explore its potential,” Itkonen told EURACTIV in emailed comments.

The lack of data was confirmed by the American Petroleum Institute (API), a trade group, which said there are no measurements currently being made of the greenhouse gas impact of US liquefied natural gas.

Any calculation of carbon footprint would be complicated by the many factors coming into play, such as the origin of the gas coming from specific US shale deposits and the destination country to which the LNG is being shipped, EURACTIV understands.

“The main differentiating factor, in terms of carbon footprint, of such supply chains would be methane emissions, rather than CO2,” Itkonen said when asked about the difference between LNG and pipeline gas. But she added that data currently available from by the International Energy Agency (IEA) suggests “LNG supply chains are not necessarily more carbon-intensive than gas supply chains through pipelines”.

Carbon Tracker, a think-tank, said it doesn’t have data to report on LNG emissions at this moment but will do later this year.

Future of gas: Decarbonise or go bust

Widely accepted as a “transition fuel” until 2030 to help wean Europe from coal, gas is also positioning itself as a clean fuel in its own right beyond that date. But meeting the EU’s 2050 climate goals will require a deep transformation of the sector, amid growing competition from solar and wind power.

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