DIRECTOR, CLIMATE & SUSTAINABILITY
Cheniere Energy Inc.
12:20 - 12:45
Wednesday, 18 September 2019
S2.4 RESERVE: Natural Gas – bridge or foundation under carbon constraints?
The shale revolution coupled with the significant growth of lower cost and lower or zero emitting technologies have resulted in fundamental energy forecast revisions. The abundance of natural gas has provided energy security and lower domestic natural gas prices and over the same period natural gas exports have grown by 285%. The U.S. Energy Information Administration (EIA) in its Short-Term Energy Outlook, January 2019 expects U.S. natural gas production to grow by over 10.6% to 92.2 Bcf/d from 2018 levels. This growth is primarily driven by LNG exports which are projected to reach 6.8 Bcf/d by 2020.
The role of natural gas in a carbon constrained world has attracted significant debate. Hyper-partisan attitudes influence the debate on climate and the role of natural gas in reducing greenhouse gas emissions, and lost in the argument is the rational middle. Some observers argue that unfettered access and development are required to maintain US’ economic and energy security. Others argue that fossil fuel production and associated infrastructure should be limited to avert catastrophic climate change impacts projected by scientists. Still others argue that natural gas is a “bridge fuel” to balance the intermittency of renewable power sources until large scale storage solutions become economical. A clear, science-based corporate strategy is missing in these debates. Cheniere’s position is that lower emitting natural gas will remain a foundational fuel displacing higher emitting intensive fossil fuel sources while providing economic and energy security.
Cheniere Energy’s export markets demand low cost, reliable and lower-emitting fuels to meet their energy demands. Cheniere is currently the largest liquefied natural gas (LNG) exporter out of the United States and accounts for about 4% of the total natural gas consumed in the U.S., making Cheniere the single largest physical purchaser of natural gas.
The paper will review the role of natural gas in relation to historical emissions impacts in the United States and lessons learned from scientific studies and policy debates. It will also include a review of projections on the role of natural gas to to meet the Paris Agreement goals as well as provide universal access to energy and cleaner air quality, in line with UN Sustainable Development Goals (SDGs). The paper will also discuss an updated LNG lifecycle analysis from the “well-head to the burner tip”.
To realize the full potential of the foundational role for gas, the industry should focus on methane mitigation along the LNG supply chain and work towards ensuring success of carbon capture and sequestration (CCS) and other technologies to limit CO2 emissions. The paper will discuss the policies and programs that Cheniere has undertaken to ensure climate and sustainability-related opportunities and risks are reviewed and integrated into our corporate philosophy, and how such measures may result in a competitive advantage for Cheniere.
Global renewable energy trends, Deloitte (September 2018), BNEF New Energy Outlook 2018, Lazard LCOE 10.0 (2016)
Emissions from the Sustainable Development Scenario (SDS) projects global temperature rise of 1.7-1.8ₒ C (well below the 2ₒC Paris Agreement goal)