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1. Investing in the US Natural Gas Pipeline System to Support Net-Zero Targets

Author:
Erin Blanton, Melissa Lott, and Kristin Smith
Publication Date:
04-2021
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The Biden administration’s move to bring the United States back into the Paris Agreement and lower greenhouse gas emissions to address climate change will, if carried through, lead to a reduction in fossil fuel consumption. Cutting back on the burning of coal, oil, and natural gas will be critical to transitioning the country to the lower-carbon energy system it needs to achieve decarbonization targets. But while it may seem counterintuitive, investing more in the domestic natural gas pipeline network could help the US reach net-zero emission goals more quickly and cheaply. Fortifying and upgrading the system could prepare the existing infrastructure to transport zero-carbon fuels as they become available and, in the meantime, reduce harmful methane leaks from natural gas. Studies by energy agencies, universities, and the industry that model future US natural gas consumption consistently show continued use of natural gas for at least the next 30 years, even in scenarios where the country achieves net-zero targets by midcentury. There is no quick replacement for gas in the US energy mix. And for many of the needs natural gas currently meets, the eventual replacement may be zero-carbon gaseous fuels (e.g., hydrogen, biogas). These fuels may play a significant role in supporting reliability and making the energy transition more affordable—but they, too, will require a pipeline network for efficient delivery to markets and end users. Building new pipelines is a time-consuming and costly process, especially when added to all the other infrastructure needs associated with the energy transition. When possible, adjusting existing infrastructure—already permitted and built—can help minimize the costs and accelerate the speed of the transition. The US has 2.5 million miles of natural gas pipeline infrastructure across the country, which, with investment, could be upgraded to cut emissions and be retrofitted for future transport of cleaner fuels. However, investments in pipeline infrastructure have drawn concern that they would lock fossil fuels into the US energy mix for a longer period of time and work against the energy transition. Such concerns are understandable given the contribution of fossil fuels to the global climate crisis. But retrofitting and otherwise improving the existing pipeline system are not a choice between natural gas and electrification or between fossil fuels and zero-carbon fuels. Rather, these investments in existing infrastructure can support a pathway toward wider storage and delivery of cleaner and increasingly low-carbon gases while lowering the overall cost of the transition and ensuring reliability across the energy system. In the same way that the electric grid allows for increasingly low-carbon electrons to be transported, the natural gas grid should be viewed as a way to enable increasingly low-carbon molecules to be transported. This paper, part of the work by Columbia University’s Center on Global Energy Policy on natural gas and the energy transition, examines projections of continued natural gas use and the zero-carbon fuels that are poised to become a bigger part of the energy mix. It details the state of the existing US natural gas pipeline network and trends within this segment of the market, as well as technical considerations for moving new, zero-carbon fuels through the system. The findings, combined with potential net-zero goals, lead to recommendations for curbing greenhouse gas emissions caused by leakage in the existing network, as well as opportunities to refurbish sections to carry increasing levels of cleaner fuels. It focuses on policy options that will minimize environmental impacts and maximize economic benefits. These options fall into two main categories: changing regulations on methane leak detection and repair to make the existing pipeline network as low emissions as possible while it still transports natural gas, and expanding on existing regulatory authority to allow for retrofitting the system for more hydrogen usage, along with increased R&D funding to test the integrity of the pipeline system with greater levels of hydrogen and other zero-carbon fuels.
Topic:
Energy Policy, Natural Resources, Gas, and Energy Dependence
Political Geography:
North America and United States of America

2. The Carbon-Neutral LNG Market: Creating a Framework for Real Emissions Reductions

Author:
Erin Blanton and Samer Mosis
Publication Date:
07-2021
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
As governments and companies consider options to decarbonize their energy systems, addressing greenhouse gas emissions from natural gas and liquified natural gas (LNG) will inevitably become a greater concern. Natural gas is viewed by some as potentially providing a bridge in a broad energy transition from dependence on fossil fuels to lower-emission sources. Even with advancements in renewable energy, many forecasts show natural gas will remain core to meeting global energy demand for some time, including as a backup fuel source for renewables.[1] But as the emissions profile of the natural gas value chain has become clearer, estimates of its footprint have increased, raising questions about natural gas’s transitory function. While gas will continue to have a prominent role in the energy mix,[2] without action to better account for, reduce, and offset natural gas and LNG emissions, the breadth and length of its use will increasingly come into question—including by countries with growing energy demand who see diminishing incentive to favor natural gas over high-emitting but fiscally cheap fuel sources, such as coal. Amid these considerations, discussions of value chain carbon intensity and greenhouse gas (GHG) accounting are becoming an important component of LNG trade, giving rise to the concept of “carbon-neutral LNG.” In the trade of carbon-neutral LNG, GHG emissions from supply and/or consumption are accounted for and offset by procuring and retiring carbon credits generated through GHG abatement projects, such as afforestation, farm/soil management, and methane collection.[3] Currently, carbon-neutral LNG makes up a slim portion of global LNG trade, with just 14 cargoes traded transparently since the first was sold in 2019, compared to over 5,000 cargoes of LNG being delivered globally in 2020 alone.[4] By examining the efficacy of the market at this early stage, as this commentary does, areas for improvement in the carbon-neutral LNG trade are highlighted. Procurement of carbon credits does not negate the emissions from natural gas and LNG, and accordingly, adoption of offsets should be paired with a broader and deeper reduction in the emissions intensity of these fossil fuels to ensure they remain conducive to meeting growing energy demand without needlessly jeopardizing global, national, and corporate efforts to reduce emissions. When considering this alongside the important role LNG and natural gas are likely to continue to play in meeting energy demand in key parts of the world during the transition period, it becomes clear that efforts must be made to scale GHG emissions mitigation throughout the value chain, such as through leakage reduction and employment of less carbon-intensive liquefaction technology, as well as to offset remaining emissions through the procurement and retirement of high-quality carbon credits. Serious questions remain about scaling the carbon-neutral LNG trade, including which emissions are accounted for, what methodology is employed in the emissions measurement and verification, and how the emissions are priced—either through a carbon credit or a carbon tax. If these questions are sufficiently addressed, natural gas and LNG may align better with global policy direction and emissions requirements. That is to say, GHG verification and mitigation will be critical to the sustainability of LNG in the decarbonizing global energy stack in the coming decade, with knock-on impacts on long-term LNG contract structure, trade flows, and market pricing. While this commentary does not prescribe policy to meet carbon neutrality or Paris Agreement goals specifically, it does examine an existing and growing market trade behavior that has the potential to assist countries dependent on natural gas in meeting their climate targets during this transitory period for the global energy system. Section 1 outlines the current state of the carbon-neutral LNG trade, while section 2 suggests a structure for LNG GHG accounting based on existing accounting methodologies. Section 3 discusses the different forms through which emissions mitigation can be integrated into the LNG trade, including a discussion on the risks of greenwashing. Section 4 highlights the implications of the growing carbon-neutral LNG market and provides recommendations to market participants and policy makers.
Topic:
Energy Policy, International Trade and Finance, Natural Resources, Carbon Emissions, and Decarbonization
Political Geography:
Global Focus

3. Market, Policy, and Political Implications of the Global Natural Gas Crisis: Forum Report

Author:
Hon Xing Wong, Erin Blanton, and Samantha Lang
Publication Date:
11-2021
Content Type:
Policy Brief
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On October 18, 2021, Columbia University’s Center on Global Energy Policy (CGEP) hosted a special session of the Natural Gas Forum on the global nature of the current unexpected gas crisis, which has sparked chaos in many parts of the world. A number of factors have been put forward to explain the crisis, including a faster-than-expected pandemic recovery in economic demand that has precipitated global supply chain issues, extreme weather conditions around the world, and liquified natural gas (LNG) facility outages. The forum was an opportunity for participants to discuss the underlying causes of the global gas crisis and its long-term market, policy, and political implications. The discussion started with outlooks for the winter across the European Union, Russia, the United States, and East Asia before turning to a debate over any longer-term implications of the natural gas crisis on the energy transition. The forum’s participants included policy makers and senior leaders from major international agencies, energy companies, financial institutions, civil society organizations, academia, and nongovernmental organizations. This summary of the proceeding begins with the broad takeaways of the discussion, which occurred on a non-attribution basis under the Chatham House Rule, and then delves into regional issues and the future of natural gas.
Topic:
Energy Policy, Natural Resources, Global Markets, Gas, Renewable Energy, and Energy Crisis
Political Geography:
Global Focus

4. Nowhere to Hide: Implications for Policy, Industry, and Finance of Satellite-Based Methane Detection

Author:
Jonathan Elkind, Erin Blanton, Robert Kleinberg, and Anton Leemhuis
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
In August 2020, the Trump Administration finalized plans to roll back regulations on oil and gas industry emissions of methane from new and modified infrastructure. In the same month, the European Commission gathered stakeholder comments as part of its process to introduce the first EU-wide methane regulations. Though contradictory in direction, these regulatory processes on opposite sides of the Atlantic highlighted a critical climate protection challenge: How can the oil and gas industry—and the regulators who oversee it—best detect and address methane emissions to protect the environment and the climate in particular? The answer to this question will drive planning and operational approaches in the oil and gas industry. It could also significantly affect the future role of natural gas. Five years ago, many energy analysts expected natural gas to serve as a bridge fuel that would result in only half as much climate warming as coal, and fewer local air pollutants. Among other roles, gas was seen as a natural complement for variable wind or solar power—a way to provide firm, dispatchable, low-emissions power. Now that it is apparent that our understanding of methane emissions is poor, the climate implications of gas are far less clear. This poor grasp of methane emissions appears likely to become a thing of the past, however. In roughly the next five years, new satellite detection systems—used in concert with existing systems, aerial monitoring platforms, and ground-based monitors—can increase markedly the transparency surrounding methane leakage. The new wave of satellite monitoring capability has major implications for industry and governments. Our world is rapidly becoming a place in which methane emissions will have nowhere to hide. This commentary, co-authored by the Center on Global Energy Policy and TNO, focuses on detection and response to oil- and gas-related methane emissions, which have been the subject of increasing focus on the part of industry and the public policy community. It addresses the significance of methane emissions for the climate, and the challenges of detecting and accurately quantifying methane emissions. It then explores the evolving capabilities of satellite-based methane detection and monitoring systems, which are expected to advance rapidly in the coming years, and which can be especially powerful when used in concert with aerial and ground-based monitoring systems. It concludes with a discussion of the implications of the changing satellite detection landscape for the oil and gas industry, the finance and investment community, and the realm of public policy.
Topic:
Climate Change, Energy Policy, Environment, Gas, Finance, and Methane
Political Geography:
Global Focus

5. ESG Investing and the Oil and Gas Industry: Moving Toward a Holistic Approach to Risk, Governance; Performance Measurement, Disclosure, and Results

Author:
Hon Xing Wong, Marianne Kah, and Erin Blanton
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On September 17, 2020, Columbia University’s Center on Global Energy Policy (CGEP) held a virtual workshop about environmental performance in the oil and gas industry. Investors, senior oil and gas industry executives, NGOs, and other stakeholders participated in this candid discussion about how environmental risks should be measured, disclosed, and incorporated into investment decisions.
Topic:
Energy Policy, Oil, Natural Resources, Gas, and NGOs
Political Geography:
Global Focus