President Trump’s efforts to expand European imports of American natural gas thus far have consisted of tweeting and jaw-boning, approaches notably ineffective with EU allies whom he has sometimes cast as “foes.” Yet US gas does have a real competitive advantage over Russian and other gas sources – far lower emissions of methane, a powerful greenhouse gas. Unfortunately, the Administration is undermining domestic regulations to limit these emissions, when it should undertake measures to increase this advantage and market US gas as the cleanest and most climate-friendly in the world.
European and Asian markets wants natural gas so badly, of course, because gas has less than half the carbon dioxide emissions of coal. Traditionally green-minded Germany in particular is desperate to find lower emitting energy sources because it has closed its zero emissions nuclear power stations, and is falling embarrassingly short of its own emissions reduction goals.
But natural gas has a catch: gas production involves leaks of unburned gas as methane, a greenhouse gas as much as 75 times more powerful than carbon dioxide. If total leaks during production, transport and use of natural gas exceed as little as 3.5% of overall gas volume, gas is no better than coal from a climate change perspective.
Sources of gas have different methane leakage rates depending largely on the efficiency and regulations on production. The good news for the US is that American gas has much lower methane emissions than most other sources, especially Russian gas. The US Environmental Protection Agency under the Obama Administration estimated that US shale gas production involves methane leaks of about 1.5%, certainly one of the lowest emissions rate of any major producer in the world.
Russian gas, by contrast, comes from the notoriously leaky Gazprom production system, with leaks or “fugitive emissions” rates of at least 5-7%.
Instead of exploiting this US gas advantage, thus far the Trump Administration and many in the oil and gas industry have been undermining the very methane regulations that can give them an even greater competitive edge in an increasingly climate-constrained global energy marketplace.
The Trump Administration attempted to overturn the Obama-era methane regulations entirely last year using the Congressional Review Act but even a few Senate Republicans joined Democrats in preventing that. Trump’s EPA then proposed a series of rollbacks in methane regulations from new gas wells, and has effectively suspended similar rules on existing wells. Attorneys General from 15 US states are suing to get those rules enforced on existing sites, and the case could end up before the Supreme Court.
Trump’s Interior Department has proposed similar rollbacks of methane regulations of gas production on public lands, despite the fact that better regulation increases returns to taxpayers in the form of gas royalties, and allows industry to more efficiently produce gas.
But the US is not the only problem. Germany and other nations who claim to be seriously concerned about climate change are locking in dependence on high-emitting Russian gas with long-term contracts, but not insisting on a clean-up of Gazprom’s leaks. The new Nord Stream 2 pipeline from Russia to Germany, that Trump has objected to, would increase Germany’s imports of Russian gas from the current 50% to between 60% or 70%, a large increase, though much less than Trump has claimed. China has also signed a $400 billion, 30-year gas deal with Russia.
Environmentalists in Europe and elsewhere have been slow to pick up on this key emissions source. Russia and other natural gas exporters like Qatar do not report their full methane emissions accurately in the first place, so a large contributor to global emissions is not being a fully counted. This is a major flaw in global accounting of emissions that must be corrected as overall greenhouse gas emissions limits become more stringent to combat climate destabilization.
So far, the Trump Administration’s attempts to increase US gas exports in Europe and in Asia, have met with limited success. American companies ship only about 7 percent of China's liquefied natural gas (LNG) imports. But Chinese LNG demand is set to grow by 60% in the next 6 years and 300% by 2030, according to the International Energy Agency, so lower emitting US gas could have an additional market advantage as China looks to drive down its own greenhouse gas emissions. Unfortunately, the Chinese have just recently placed a 25% tariff on the importation of US gas in retaliation for Trump's tariff's on Chinese steel, making China more reliant on higher emitting Russian gas even as it claims to emphasize greenhouse gas emissions cuts.
Of course, yet another reason for US gas imports to displace Russian gas is to further deplete the Kremlin coffers and put greater pressure on Putin to meet US and EU demands regarding Crimea and other human rights issues. In fact, Gazprom’s centrality to Russia’s economy was vividly illustrated by the incessant Gazprom ads flashing around each stadium during the recent World Cup hosted by Russia. If European political leaders and greens are not sufficiently outraged by funding Putin’s regime through gas imports, perhaps they will be motivated these stark climate considerations.
Trump’s efforts to rollback regulations on methane emissions are likely to undercut long-term growth in the very gas export market the Administration has been desperately trying to expand. The White House should realize that lower emitting US gas has a distinct competitive advantage over Russian and other sources of gas, one likely to become ever more important as countries the world over attempt to reduce greenhouse gas emissions that are causing climate change.
