(Bloomberg) -- New rules on curbing methane emissions in Europe’s energy sector may actually boost the case for liquefied natural gas and shouldn’t affect exports from the US.
“All of the progress around emissions reduction is positive for the gas business,” Peter Clarke, senior vice president for global LNG at Exxon Mobil Corp., said at the Wood Mackenzie Ltd. oil and gas conference in London. “Ultimately it delivers what we are selling, which is a lower greenhouse gas-intensity fuel, and takes coal out of the picture if you do it properly.”
Read more: EU Strikes Deal to Curb Methane Emissions in Oil, Gas Supply
His comments come as the environmental impact of methane — the main component of natural gas and one of the most potent greenhouse gases — comes under increasing global scrutiny. As EU negotiators this week struck a deal to curb and track methane emissions in the energy sector, a group of US lawmakers were pushing the Biden administration to assess the climate threat of massive natural gas export terminals being developed along the Gulf Coast.
Methane has more than 80 times the warming power of carbon dioxide during its first two decades in the atmosphere and is responsible for approximately 30% of the Earth’s warming.
Minimizing those emissions across the industry is “absolutely achievable,” Clarke said Wednesday.
Methane leakage is mainly linked with gas production and transportation, as well as coal mining. And while methane emissions associated with coal production are similar, if not higher, than gas and LNG, coal has a bigger global warming impact than gas due to higher carbon emissions when it’s burned to generate power, according to Christopher Goncalves, managing director at Berkley Research Group in Washington. Typically, US LNG tends to emit less methane than some pipeline gas routes to Europe, he said.
Some parts of industry are lobbying against stricter rules. The leak detection and repair thresholds being negotiated are equivalent to a fraction of a dairy cow’s methane emissions, while other measures like quantifying emissions from subsea wells are unfeasible, according to the International Association of Oil & Gas Producers.
LNG still has a critical role in a low-carbon economy, even under the new EU rules, according to commodities trading house Vitol Group.
“We cannot afford to have LNG being put in a negative light to coal,” Pablo Galante Escobar, head of LNG and European and Middle East gas and power at Vitol, said at the conference. “I am not concerned about the future of LNG as far as we contain methane leakage.”
--With assistance from Priscila Azevedo Rocha and John Ainger.
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