The Liquid Natural Gas industry is a multi hundred billion dollar global economic value-destruction machine.

The cause: carbon emissions.

When these are taken into account, LNG’s life-cycle environmental economics are worse than those of coal.

Unchecked, uncounted and unpriced, these emissions distort global energy markets so badly they’ll ensure uncontrolled climate change. The only way to fix this is to properly count and price these emissions.

Doing so reveals LNG’s true economic folly.

It will also ringfence value destruction by limiting it to feckless investors rather than society at large. The reason: LNG industry investors should have known this or should have asked — or worse — knew it, asked about it and then ignored it.

Below we make the case against LNG’s environmental economics through citing readily-verifiable, publicly-available sources.  What they indicate is end-to-end carbon emissions from the global LNG trade are far worse than industry officials disclose.

For years, the half-truth spouted by the natural gas industry — and you still see it repeated virtually verbatim everywhere —  is that Liquid Natural Gas is a critical transition technology to a clean energy future because natural gas is a low emission fuel.

That’s a lie atop a half-truth.

When combusted to make electricity, natural gas emits (estimates vary, but not by much) about 0.4 tonnes of carbon dioxide (and equivalents) per megawatt-hour of electricity produced.

Coal, by contrast, emits anywhere from about 0.65-1.1 tonnes per megawatt-hour, depending on the coal.

What these LNG figures artfully leave out are the sizable emissions in the LNG production and delivery chain.

These include emissions from extracting the natural gas from wells in the first place (including methane emissions, which aren’t counted), pipelining the natural gas to coastal ports, liquefying it into LNG, ocean shipping, regasification, pipeline delivery to power plants and then combustion for electricity.

When these are added in — as they should be — the emissions of natural gas shipped to market as LNG to create electricity generates greenhouse gas emissions of around 600-700 kgs of carbon per megawatt hour. Natural gas all by itself emits about 400. Coal emits 800 or more.

That makes LNG only slightly better than coal in terms of carbon emissions at huge investment and environmental cost.

Below we present charts of LNG’s life-cycle emissions from different sources. We then  combine these into a summary chart.

When this emissions difference is counted and priced, LNG’s environmental economics disappear. The upshot: investors have been suckered, markets distorted, the environment degraded and huge costs shoved on to future generations.

That’s hardly the definition of a clean transition fuel.

Below is a chart from the US Department of Energy (DOE). In a 2014 report, the DOE estimated LNG’s life-cycle carbon emissions of 600-800 kilograms of carbon per megawatt hour of electricity produced.

That’s 50-100% higher than the 400 kilos of carbon emissions the LNG industry likes to use. The industry does this  by counting only the downstream combustion of natural gas. It simply excludes the upstream emissions of mining, compressing and uncompressing and transporting.

For comparison in the chart above, we added solar energy’s 40 kilograms (yes 40) of carbon on a comparable life-cycle basis, and wind’s tiny 12. These are an order of magnitude lower than natural gas, and 1.5 orders of magnitude lower than the life-cycle emissions of Liquid Natural Gas.

These are not one-off figures. They permeate research on the subject across the board. Take the US Office of Fossil Energy. It came up with life-cycle emissions of natural gas shipped to market as LNG of 630 kg/Mwh.

LNG Life Cycle Greenhouse Gas Emissions

Life-Cycle carbon emissions of 600-700 kgs per mwh result from natural gas electricity delivered to market as LNG.

Source: “Life Cycle Greenhouse Gas Perspective On Exporting Liquefied Natural Gas From the United States, 2014,” US National Energy Technology Laboratory, Office of Fossil Energy, 2014

Peer-reviewed research published in the journal Environmental Science and Engineering also has similar figures

LNG Life Cycle Greenhouse Gas Emissions

Research at Carnegie Mellon University came up with LNG emissions of nearly 900 kilograms of carbon per megawatt-hour. This research included the effect of uncounted methane emissions of LNG and their dramatic shorter-term global warming impact.

Source: “Life Cycle Greenhouse Gas Emissions From U.S. Liquefied Natural Gas Exports: Implications for End Uses,” Environmental Science and Engineering, 2015

The Liquid Natural Gas industry lobby the International Gas Union sees things differently, standing alone in estimating the life-cycle emissions of LNG as much lower than anyone else.

LNG Life Cycle Greenhouse Gas Emissions

The International Gas Union claims LNG has only emissions of .6-.6 tonnes mwj. far belwo other estimates.

An outlier here, however, is the International Gas Union. This is the industry group that promotes the global LNG industry.

It puts life-cycle emissions at about 600 kg of carbon per Mwh.

Another interesting element is how the Liquid Natural Gas industry lobby the International Gas Union, sees things differently from other researchers. The IGU has the lowest estimate of greenhouse gas emissions.

With some variations, the above indicates general agreement on the scale of emissions from the LNG trade.

An outlier here, however, is the International Gas Union. This is the industry group that promotes the global LNG industry.

It puts life-cycle emissions at about 600 kg of carbon per Mwh.

Putting all these numbers together in place indicates a midrange of 575-725, or 650.

That’s a mere one-third reduction from coal and 50% higher than the emissions profile of natural gas combustion alone that the LNG industry universally cites. These figures also do not count methane emissions. Clean energy? It looks a stretch on the numbers.

This matters because the LNG industry has for years used such selective numbers to win regulatory, environmental and investment approval for a massive multi-hundred billion dollar global expansion with an amortization period stretching out to 2040 and beyond.

If this holds, it’s no exaggeration to say that 4c warming by mid-century is not implausible. Warming on that scale puts civilization in peril, all for the profits of a single industry.

Properly carbon priced, natural gas shipped to market as LNG is uncompetitive against wind and solar. In other words, pricing the now-uncounted carbon emissions of the LNG industry would provide sufficient funding to pay for both battery storage for wind and solar as well as climate adaptation investments now required by the lingering legacy of fossil fuels — of which LNG is just the latest incarnation.

Yes, carbon pricing LNG will raise the prices of electricity produced from natural gas. Destructive climate changes and destroyed coastal cities also will cost money. The issue is one of polluter pays.

Thirty-percent when applied to carbon prices will move upward the carbon-adjusted retail price of electricity generated from natural gas shipped to market as LNG. At present, coastal cities and global health care systems are paying these costs through more severe and damaging storms and treating the physical stress of record heat waves.

Paying these pollution costs through an $80 per tonne carbon price in 2030 (for example) would raise LNG-based electricity prices by 5.2c kwh. $100 carbon price will raise it by 6.5c. That would, in some cases, double the downstream cost of electricity generated from this fuel, bringing the cost of carbon adjusted LNG-produced electricity to 8-12c per kwh, compared to less than 5c/kwh in 2030 for wind and solar.

The difference between these two future prices, 5c and 10c is the implicit subsidy the LNG industry is getting.

As this is realized, markets will shift against LNG. Billions of dollars of global LNG infrastructure will prove uneconomic. When that happens, either the LNG industry will lobby government for assistance, or be forced into micro-economically draconian write downs of LNG capacity that never should have been built had prices signals not been distorted through uncounted carbon.

These implications will be covered later.