LNG Expansion Anchors Emissions
“The best way to get out of a hole is to stop digging!” – Will Rogers
Last week, the Biden Administration announced a “pause” in the approvals of liquefied natural gas export terminals along the coasts of the United States. The immediate subject of the order is a project known as Calcasieu Pass 2 or CP2, located along the Louisiana coast. If built, it would be the largest LNG export facility yet in the country, budgeted at $10Bn. By itself, it would export almost 3% of the natural gas produced in the entire country each year, an immense quantity of energy.
Groups as diverse as the US Chamber of Commerce, the Wall Street Journal, the Center for American Progress and countless others have lamented the state of regulatory and permitting obstacles for critical infrastructure. In this context, the expansion of LNG export facilities in the past decade has been astounding. Indeed, you would be forgiven if you had never even heard about it before last week’s decision (or this blog post!). But while renewable energy developers have been sitting in town planning committee meetings offering concessions to reduce the “visual impact” of their proposed solar projects, the United States has become the largest exporter of LNG in the world, following its first exports in 2016. There are now 7 of these facilities in the country, with 5 more approved and under construction. CP2 is one of 17 more such plants that are in the permitting phase. These plants have useful lives approaching 50 years, suggesting that to realize their expected returns, they would need to run far beyond the dates between 2030-2050 by which the federal government and many state governments have committed to becoming carbon neutral. These plants would make such commitments virtually impossible to meet, putting the US on a path of lecturing one future for the rest of the world while we continue to inflict climate damage for profit.
The decision to place these reviews on hold comes in the context of the UN’s COP28 meeting in Dubai in November at which over 150 countries, including the United States, stated in the meeting’s final declaration that the world must now begin “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner.” This historic agreement itself followed similar announcements from unexpected quarters, such as the International Energy Agency – an advisory body funded by OECD countries and tasked with advising governments about global energy policy – who announced very prominently in a new report that the development of new fossil fuel resources and infrastructure was unneeded now and would be counterproductive to the member countries’ stated goals for decarbonization and keeping global warming below the 1.5°C level committed to in the Paris Agreement in 2015.
The United States is an imperfect leader in this fight with our divided government, half of which generally opposes decarbonization and climate policy. But the people of the United States are far more united. According to a recent survey by Pew Research Center, 54% of Americans now consider Climate Change to pose a “major threat” to the country, 67% say we should prioritize wind and solar energy relative to gas, coal and oil, and 69% support efforts to become carbon-neutral by 2050.
Any credible path to decarbonization by 2050 represents the most heroic undertaking physically and economically in the history of the world. There are many ways that it could fail or at least fall short. The easiest and most obvious way is to keep anchoring long-term emissions of methane and CO2 in our economy for decades to come. Meanwhile the most promising path to success is the continued deployment of wind, solar, hydro, and next generation nuclear energy coupled with effective, affordable long duration energy storage. Photon Vault stands ready to assist in this historic transformation, and we welcome you to join us!