In November 2016, Seattle voters approved a plan to expand the city’s light rail transit system. Almost six years later, the project still hasn’t properly begun. Instead, in January 2022 the city’s Sound Transit released a draft of their required Environmental Impact Statement, which ran more than 8,000 pages long. The final version of this EIS won’t be ready until 2023, at which point the project will already have spent hundreds of millions of dollars before a single shovel hits the ground. Current timelines, which might be delayed, call for services on the new lines to be open by 2039.
If a 23-year timeline from voter approval to project completion seems ridiculous to you, you’re not alone. America has a huge problem with not being able to build anything cheaply or quickly. One of the key obstacles is our environmental permitting process. The National Environmental Policy Act is one of America’s foundational environmental laws, but it now requires incredibly long review processes that end up doing more harm than good.
Asian countries consume nearly half of the world’s energy and 70% of the world’s coal. China burns more coal than all other countries combined and plans to build an additional 80 new coal plants in coming years. The United States Energy Information Administration (EIA) projects that heavy coal use will continue in many parts of Asia throughout 2050 even in a “low demand” scenario.1 Asia’s dependence on coal works at cross purposes with the global consensus to limit warming to under 2 degrees Celsius as set forth in the Paris climate agreement, as well as pledges by major Asian countries to cut their carbon emissions.
For example, China has pledged to achieve carbon neutrality before 2060.2 India set a similar net-zero emissions goal by 2070.3 Since Asia emits well over half of the world’s annual greenhouse gas emissions, any realistic strategy to bend down the global emissions curve relies on reducing Asian emissions deeply over time.4 The construction of new coal plants — which typically operate for 40 years or more — raises serious doubts about the climate commitments of leading Asian nations. China’s annual greenhouse gas emissions alone are now more than 30% of the global total, greater than all developed nations combined. Asia’s large and growing countries must transition to a cleaner fuel base to stand a chance at meeting their climate targets while sustaining economic growth. In addition, Asia’s reliance on coal also undermines efforts to reduce local air pollution, which led to over 30 million premature deaths in China alone between 2010 and 2016.5 How can Asia reduce its coal use while also ensuring continued prosperity and sustainability across the continent? Substituting cleaner-burning natural gas for coal offers one key strategy to cut emissions deeply, but only if Asian countries recognize that natural gas is not created equally from a climate change perspective.
For example, Russia and the United States both increasingly export natural gas to Asia. However, studies show that the United States produces natural gas that has far lower lifecycle greenhouse gas emissions than Russian gas. That’s due to America’s greater performance on all three dimensions of effective methane control: (1) measurement, (2) validation, and (3) policies.
In fact, this paper will show that:
Due to its very high fugitive emissions of methane, Russian gas delivered through pipelines to China emits slightly higher lifecycle greenhouse gas emissions than Chinese coal itself based on this best available data. Thus, any pretense by China that using Russian gas reduces overall greenhouse gas emissions is false.
This fact undermines the climate change rationale of the recently announced new, second major natural gas pipeline project from Russia to China. Increased Chinese imports of Russian gas will only subvert Asian and global climate protection goals.
In contrast, due to lower lifecycle emissions of methane, U.S. liquefied natural gas delivered to China has on average 30% lower lifecycle greenhouse gas emissions than does Chinese coal.
On this basis, we argue that Asia should not only increase its use of natural gas to displace coal, but do so particularly by purchasing liquified natural gas (LNG) imports from the United States and other lower methane emitting sources, rather than sourcing natural gas from Russia.6 We find that lower methane emissions gas systems give the United States a significant competitive advantage versus other sources of gas as Asian countries shift from coal to gas to cut their carbon emissions.
But these U.S. advantages will only continue if the federal government and domestic energy companies work together to lower methane emissions from its production, transportation, and exportation of natural gas. We urge the Biden administration to set an explicit national goal to work toward making America the cleanest natural gas producer in the world. Not only would that boost U.S. LNG exports, it would also pressure other exporting countries to reduce their methane and lifecycle emissions if they want to be remain competitive.
This paper offers a three-tier framework for a comprehensive comparison of methane emissions by Russia and the United States. We explore how each country measures its methane emissions, the extent and effectiveness of third-party validation of emissions estimates, and the role that policy frameworks play in creating incentives for cleaning up gas production.
We note that Russia’s obsession with secrecy makes a comprehensive comparison of methane emissions between the United States and Russia difficult. The bottom line is that Russia’s insistent lack of transparency compared to the U.S. means Russian emissions are likely far higher even than the existing estimates used in the paper. We also note that from an economic and national security perspective, the U.S. has an opportunity to partner with key Asian nations in providing cleaner natural gas while reducing the influence of petro-states like Russia. This is imperative is an especially crucial given Russia’s invasion of Ukraine and other expansionist policies. However, this is not the main focus of this paper.
All these factors suggest that it is strongly in the U.S. and global climate protection interest for America to continue to expand its LNG exports into Asia, while making sure U.S. regulations drive down methane emissions to work toward being the world’s cleanest producer of natural gas. This report will offer a series of specific recommendations for how to accomplish these goals.
INTRODUCTION
Natural gas consumption in Asia has risen steadily in recent years, a trend expected to increase more dramatically to meet Asia’s projected increase in energy consumption over the next thirty years, as displayed in Table 1a and 1b. Economic growth in the region, particularly in China and India, is expected to drive demand for a wide range of energy sources, including natural gas. In addition, calls for cleaner sources of energy has motivated commitments by governments in the region to begin shifting away from coal and towards natural gas and renewable energy.
This vision was directly reflected in China’s 2016- 2020 “energy revolution” plan, which featured growth in natural gas as part of its “three-pillar approach” to sustainable energy. Specifically, the plan included increasing the share of natural gas in primary energy consumption to 10% by 2020 and 15% by 2030 and in urban dwellings to 50-55% by 2020 and 70% by 2030.7 8Natural gas continues to feature prominently in China’s 14th Five-Year Plan, spanning years 2021 through 2025,9 and will continue to do so in light of China’s carbon neutrality by 2060 pledge.10 India is following a similar trajectory, with a recent announcement committing to net-zero carbon emissions by 2070.11 In line with this new ambitious policy direction, India has set out to increase the share of natural gas in the country’s energy mix from just over 6% at present to 15% by just 2030.12
Due to limited domestic supply of natural gas in Asia, natural gas imports are also projected to increase steeply, roughly quadrupling from 4.1 trillion cubic feet (Tcf) in 2020 to 16.1 Tcf in 2050.13 China and India are projected to receive roughly half of these dramatically increased imports.14 Liquified natural gas (LNG) imports specifically are similarly projected to increase over this time period, representing as much as 72.5% of the total demand for natural gas in the Asia-Pacific region by 2050.15 This is especially the case for India, which has experienced a decline in domestic natural gas production. Indeed, India has been the fourth largest importer of LNG since 2011 and continues to rely on these imports, which represented 50% of the country’s natural gas supply in 2019.16
Three of the world’s largest natural gas producing regions (the United States, Russia, and Middle Eastern exporters) are expected to increase natural gas production to meet growing demands in Asia, as displayed in Figure 2. However, at least prior to its invasion of Ukraine, Russian production of natural gas (which may reach 14 Tcf by 2050) has been expected to significantly outpace exportation from other regions, positioning Russia to become the largest net exporter of natural gas through 2050.17 And while these estimates were made prior to the EU’s announced embargo on Russian gas, and are likely therefore to be too high, the EU is still importing gas from Russia, as are other nations.
Crucially, Russia has already taken steps to secure its natural gas foothold in China even as its market in Europe is now threatened by its invasion of Ukraine. The Power of Siberia-1 pipeline, which began operating in 2019, is Russia’s first natural gas pipeline to China. The $400 billion contract, the largest contract in the history of Russia’s natural gas company Gazprom, calls for Russia to supply China with 38 billion cubic meters of natural gas annually for 30 years. The impact for China is also significant, with the amount of natural gas supplied enabling China to displace coal in China’s northwest region over that period.18 Russia’s President Vladimir Putin and China’s President Xi recently held a high profile event during the Beijing Winter Olympics at which they announced an additional agreement calling for another Russian gas pipeline to China, known as the Power of Siberia-2 pipeline, which is expected to have an export capacity of 50 Bcm per year19 and is scheduled to commence operations in 2030. At the February 2022 event in Beijing, Russia and China announced another 30- year contract to supply 10 billion cubic meters of natural gas to China through this new pipeline.20
Russia has also begun making a natural gas footprint in India. Although India currently only accounts for 0.2% of Russia’s natural gas exports,21 India recently entered into a 20-year contract with Russia to supply it with 2.5 million tons of LNG.22 Both countries have expressed commitments to deepening their ties and boosting LNG activity.23
As with Russia, net exports of natural gas from the United States are expected to spike through 2050. The United States just recently, in late 2021, became the world’s largest LNG exporter. Asia has been the largest destination for U.S. LNG exports since 2020, with South Korea, China, and Japan being the largest buyers in both 2020 and 2021, although the recent pledge by President Biden to supply more U.S. LNG to Europe to displace Russian gas suggests that both Europe and Asia will be receiving greater U.S. LNG shipments in coming years.
While Japan has been the largest LNG importer in the world for the past 50 years, China is poised to surpass Japan to facilitate its transition away from coal.24 The year 2021 marked this transition, as Japanese LNG imports fell 4 million tons short that of China. The U.S. recently surpassed Qatar and Malaysia as the second largest source of LNG imports to China, after Australia. The United States further cemented its relationship with this import partner in the third quarter of 2021, when China signed four long-term LNG contracts with leading U.S. LNG producers following a Chinese government directive to secure LNG at any price.25, 26
While India has historically received most of its LNG from Qatar due its geographic proximity, India is still one of the primary destinations of U.S. LNG, ranking seventh in 2019. New commercial contracts with U.S. LNG companies will continue to sustain this relationship.
COMPARING NATURAL GAS FROM THE UNITED STATES AND RUSSIA
Russia’s invasion of Ukraine jolted the European Union out of its complacency surrounding energy imports, exposing how the EU addiction to Russian gas has been funding Putin’s malign regime at ever greater levels, in the hundreds of billions of dollars annually, even since Russia’s 2015 annexation of Crimea. Apart from the wide-ranging geopolitical costs of the EU reliance on Russian oil and gas, the invasion of Ukraine is also suddenly forcing the EU to recognize the huge additional methane emissions of Russian gas, contributing to the EU determination to cut its dependency on Russian natural gas imports.
Asia should follow suit, on both ethical grounds to protest Russia’s unlawful invasions, but also on environmental grounds. Without a dramatic fuel shift from coal to cleaner natural gas, Asian countries have no plausible way to meet their climate commitments.
Natural gas emits about half the carbon dioxide emissions as coal when combusted. However, natural gas producers emit significant amounts of greenhouse gas in the form of methane by venting, inefficient flaring, and fugitive emissions through leaks in wells, transportation in pipelines and equipment.27 These emissions have a disproportionately large impact on the climate because the primary component of natural gas, methane, warms the atmosphere 86 more times per molecule than carbon dioxide emissions over a 20-year timeframe.28 Therefore, high fugitive methane emissions can more than offset the climate gains of switching to natural gas from coal. Studies show that gas is more climate friendly than coal only so long as methane emissions are kept below 2.7% of gas production, although some estimates range to more like 3.5% leakage rates.29, 30
In the context of Asia, natural gas imports with high methane leakage rates result in higher carbon emissions than anticipated, and in some cases, are no better from a climatic perspective than continuing the use of coal. Ultimately, Asia should not purchase any natural gas that does not have low enough methane emissions to provide climatic benefits over coal.
Moreover, Asia should prioritize the lowest verifiable methane emitting option from a lifecycle perspective, over any other natural gas alternative. Without Asia’s leadership in cutting emissions of coal and using lower-emitting natural gas, it will be difficult for the planet to stay on track for a 2 degrees Celsius goal. As this paper will discuss, leakage rates vary considerably based on the geographic location of the natural gas source, including across and within national boundaries. Therefore, comparing the climatic benefits or costs of exports of natural gas from the United States and Russia into Asia requires significant analysis.
This paper addresses the unique opportunity and associated challenges for Asia to substitute coal with low-leakage natural gas, specifically, LNG sourced from the United States. This cleaner natural gas will not only allow Asia to deliver on its policy commitments, but will also reap real and significant benefits for the climate as well as for human health, both of which have been severely threatened by decades of coal use throughout most of Asia. The decisions Asian countries make today to secure their future gas supply have enormous bearing on both their economic and social development and on climate change. Where they source their gas from is crucial to ensure high-quality natural gas imports with low leakage rates for methane emissions.
This paper is organized around a three-tiered framework for assessing the climate impact of natural gas exports from the United States and Russia. Section 3 introduces and discusses this framework at length with a comparison between the United States and Russia. Section 4 offers policy recommendations for Asia and the United States
Measuring methane emissions from the natural gas lifecycle is notoriously difficult. Methane emissions can happen anywhere along the supply chain from initial production to final consumption. In addition, a small minority of leaks often explains the vast majority of any observed emissions, thereby earning the moniker of “super” or “ultra” emitting sources. For these and other reasons, there are wide uncertainties in many estimates of methane emissions, making comparing national emissions inventories alone a necessary yet insufficient step in assessing the climatic impact of different natural gas sources. Countries also put varying degrees of diligence and skill into validating national emissions. Finally, countries adopt very different policies and incentives to encourage the reduction of methane emissions. More specifically, we conceptualize three tiers of comparison as follows:
Government Emissions Inventories: Countries collect and maintain their own national data on emissions, sometimes including methane emissions from the oil and gas sector, but the accuracy of this data varies widely. In addition, countries periodically submit national inventories to the United Nations for assessment under the Framework for Climate Change. This tier ranks the accuracy of the measurements provided by national data or inventories.
Third-Party Validation Efforts: Over the last decade, academics, and nonprofits started inventing new methodologies for measuring methane emissions from the oil and gas sector to test the validity of government data. The overall level of effort put into validating government inventories by these third-parties, the effectiveness of their methods, and the results of their findings are all taken into consideration under this tier.
Methane Policy Mix: Countries adopt widely varying policies for reducing methane emissions from the oil and gas sector. Clearly, while measuring and validating emissions are pertinent for current methane emissions, a country’s policy mix largely determines the level of its future methane emissions. Therefore, this tier accounts for the trajectory of methane emissions. We also report on recent political announcements that shed light on the future direction of each country’s methane emissions trajectory.
Figure 3 summarizes our main results from applying this conceptual framework to LNG exports from the United States and natural gas exports from Russia. While there is ample room for improvement in both countries, the United States clearly offers a strong relative advantage by offering a lower carbon natural gas product in the form of LNG exports. In particular, U.S. measurement of methane emissions is more accurate, the validations of those measurements are more rigorous, and the methane policy framework is more aggressive. We believe these realities confer a substantial competitive advantage on U.S. natural gas.
At the same time, we recognize that geopolitics will sometimes supersede climate protection considerations. But if climate and geopolitical considerations are not given appropriate value, Russia could wind up being the key gas supplier to what some are calling the “axis of autocracy” — countries with rulers who may favor Russia against free and democratic nations. Since Russia’s invasion of Ukraine, this group has clearly included not only China, but in some cases India. But for Asian countries struggling to grow and do their part to slow down the overheating of our planet, the evidence points overwhelmingly to the superiority of cleaner U.S. gas. These nations must be called to account on the negative climate implications of using Russian gas, especially given the increasing availability and price competitiveness of lower emitting LNG alternatives from the U.S.
Finally, recommending imports of cleaner natural gas as baseload power and heating in Asia to displace higher-emitting natural gas sources and coal should be in way no detract from aggressive efforts among Asian nations to expand production of renewable energy, nuclear power, hydrogen and other near-zero emitting sources.
Government Emissions Data
In both the United States and Russia, government emissions inventories have historically likely underestimated methane emissions from the oil and gas sector compared to independent estimates, which the next section discusses in detail. A central, but not the only, reason for this is that these inventories rely on bottom-up measurements, which make assumptions regarding the quantity of equipment used (known as “activity factors”) and their emission rates (known as “default factors”) that are inherently prone to underestimation. Therefore, government emissions inventories should be taken with a grain of salt.
Figure 4 shows government inventories of methane emissions from the oil and gas sector compared to a selection of recent independent estimates (denoted as yellow triangles) as well as how those inventories changed over time (denoted by the dotted lines). On the first dimension, Figure 4 shows (a) that Russia initially overestimated emissions before significantly underestimating them, leading to a widening gap between government inventories and independent estimates. It also shows (b) that the United States likely underestimates emissions but that the gap between government inventories and independent estimates is quickly closing, with several academic studies roughly agreeing with the government inventories. In both cases, the notable exception outlier is IEA (2021) which accounts for ultra-emitters, an analysis that we describe in detail later in this report.
Regarding changes in government inventories over time, a recent investigation by The Washington Post shows that Russia has repeatedly and arbitrarily lowered its estimates for methane emissions from its oil and gas sector. As displayed in Figure 4A, these estimates have dropped by nearly an order of magnitude over the last 15 years with frequent revisions. According to the Post investigation, experts believe that Russia is massively underestimating its methane emissions.31 Similarly, Russia’s own estimates of methane emissions from the oil and gas sector are remarkably low in relative terms. For example, Gazprom reported a methane leakage rate of three-tenths of one percent in 2015, a number widely viewed as unbelievably low by experts,32 while the United States reported a 1.54% methane leakage rate in 2017.33 Taken together, the trend of constant downward revisions and remarkably low leakage rates immediately raises deep suspicion over the quality of Russia’s emissions inventory.
Beyond the estimates from the annual inventories, the process for making estimations is drastically different between the United States and Russia. For example, as displayed in Figure 4B, the United States also lowered its estimate for methane emissions from its oil and gas sector over the last 15 years, although to a much lesser degree than Russia. Importantly, these changes are much more gradual and accompanied by a coherent and public technical explanation in the Environmental Protection Agency’s (EPA) annual greenhouse gas inventory report. As part of this reporting process, the EPA invites and responds to public feedback — including from academics, nonprofits, and businesses — on its methodology and potential updates. On the other hand, to our knowledge, Russia does not have any such a transparent process. As such, there is no plausible explanation for why Russian estimates change so drastically or frequently, except political expediency. In addition, the Post reports that Russia does not impose substantial fines for noncompliance and that third-party audit reports in Russia cannot be trusted.34
Based on the United States Greenhouse Gas Inventory and Reporting Programs, the National Energy Technology Laboratory conducted a comprehensive study comparing the lifecycle greenhouse gas emissions from different sources of energy. As illustrated in Figure 5, the study finds Russian gas piped to China has up to 5% more greenhouse gas emissions (GHGs) than Chinese coal based on a 20-year global warming potential. In contrast, liquefied natural gas (LNG) shipped to China from the United States has only 72% of the GHGs compared to Chinese coal based on a 20-year global warming potential. From a 100-year global warming potential perspective, Russian gas piped to China has about 11% more GHGs compared to United States LNG shipped to China.35, 36.
A major caveat is that, within each country, there is massive variance in leakage rates. In particular, both the United States and Russia have localized “super” or “ultra” emitting sources, as discussed in detail by a recent academic article published in the journal Science. 37 Within these regions, researchers have observed spikes in methane leakage well in excess of what would make natural gas a reasonable substitute for coal from a climatic perspective. For example, a recent study in the United States estimates that methane emissions leakage rates from the Permian Basin, a major producing region in Texas, were 3.7% of production in 2018 and 2019, suggesting a significant disadvantage from using natural gas from this region over coal.38 Approaches that account for ultra-emitting sources, such as IEA (2021), will therefore tend to yield higher estimates of methane emissions. This speaks to the importance of independent estimates, which we will turn to next.
Third-Party Validation Efforts
Independent actors, including academic and environmental organizations, are another vital source of data about methane emissions from country to country. As described in detail in Appendix 1, we focus primarily on collecting independent estimates across the two countries that are comparable. These approaches primarily rely on either “top-down” satellite-based studies or “bottom-up” emissions factor studies. Particularly in the United States, there are dozens of excluded studies that use airplanes, trucks, sensors, and in-person assessments to provide detailed geographical estimates of methane emissions. These methodologies require a certain level of governmental or corporate permission to study methane emissions and, to our knowledge, this permission tends to be granted in the United States and not granted in Russia. This is one of the reasons why we know so much more about methane emissions in the United States compared to Russia.
In an effort to make reliable comparisons, we have focused only on studies that employ the same methodology to ascertain national-level estimates in the United States and Russia. Our analysis reveals that the average leakage rate reported in Russia is 2.80% (ranging between 1.54 and 4.14%), substantially higher than the 1.74% average rate in the United States, (ranging more narrowly from 1.12 and 2.19%.)
Most recently, the International Energy Agency recently launched a Methane Tracker Database.39 This initiative aims to blend country-level inventories with satellite-based measurements to track methane emissions over time. It also complements the International Methane Observatory (IMO), which is expected to increase the quality of methane estimates overall.40 We calculate a methane leakage rate originating from this database equal to 2.19% for the United States and 3.02% for Russia in 2020, making Russia’s methane emissions nearly 40% higher than those from the United States. Again, the uncertainties around Russia’s methane emissions are much greater, since there are many more independent estimates conducted in the United States.
Previous academic efforts to estimate country-level methane emissions from oil and gas reflect similar trends. An article published in Atmospheric Chemistry and Physics estimates methane leakage rates of 2.11% in the United States and 2.49% in Russia for 2012.41 Another academic article published in 2017 by the journal Environmental Research Letters estimates methane leakage rates of 1.57% in the United States and 3.42% in Russia for 2012. We were unable to find any third-party country-level estimate that estimates the United States emitting at a higher methane leakage rate than Russia.42
There is also a distinction between the overall effort put in by third-parties, such as academics and nonprofits, in validating government emissions inventories. In the United States, these researchers have produced well over several dozen major studies estimating methane leakage ratios at different geographies and scopes spanning the last decade. Importantly, there is a diverse array of methods including airplane, drone, sensor, and satellite data.
In contrast, there is far less activity in Russia, with only a handful of academic studies independently estimating methane emissions. Those typically find that inventories are underestimated. For example, a 2021 article published in the journal Atmospheric Environment employs satellite imagery to estimate methane emissions from one particular region in Russia that are much higher than official figures. The authors identify widespread flaring, even though this activity was supposed to be illegal, and argue that more satellite imagery is required to validate Russia’s underestimated national data.43 Taken together, not only are third-party validation efforts more commonplace in the United States, but those validation efforts that allow for comparisons with Russia show lower comparative methane leakage rates for the United States. This means that validation efforts are stronger in the United States when compared to Russia. Of course, both countries should improve further on facilitating validation efforts, since there are large gaps between estimates from government inventories and independent estimates at local and national scales in both countries.
Methane Control Policies
We are not aware of any significant policies in Russia to incentivize reductions in methane emissions. Moreover, while President Putin has called for cuts to methane emissions, Russia has not signed onto any of the recent international efforts to reduce methane emissions including, for example, the Global Methane Pledge launched by the United States and the European Union.44 For these reasons, we are unable to credit Russia with any effective policy for mitigating methane emissions.
In contrast, the United States has recently furthered its effort to reduce methane emissions from the oil and gas sector as part of its Methane Emissions Reduction Plan.45 Importantly, the United States Environmental Protection Agency is updating rules for new and existing oil and gas sources, which it estimates will reduce methane emissions by approximately 75% from covered sources. These sources will include those previously unregulated including oil wells with associated gas.
Bipartisan infrastructure legislation that President Biden signed into law also contains $16 billion in new funding to cap old or existing wells and mines that leak methane. In addition, the Bureau of Land Management will further reduce venting, flaring, and leaks on public lands and waters. This is notable because one of the main hotspots for methane emissions in the United States, the Permian Basin in New Mexico, would be subject to these regulations.
Finally, the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) is implementing the bipartisan PIPES Act, passed in December 2020, with the potential to reduce 20 million metric tons of carbon dioxide emissions per year by reducing or eliminating leaks or ruptures of oil and gas pipelines. Interestingly, PHMSA is proposing a rule this year to strengthen standards for LNG facilities, particularly from large scale incidents and storage tanks.
Policy Recommendations – Key Actions by Major Stakeholders
1. Asian governments should phase down and then halt the importation of Russian gas based on climate change, humanitarian, and geopolitical grounds.
2. Asian nations should also suspend and cancel the construction of natural gas pipelines from Russia since they increase lifecycle greenhouse gas emissions and are therefore inconsistent with climate goals.
3. In particular, China should cancel a proposed new gas pipeline from Russia (the so-called “Power of Siberia 2”) given its high lifecycle emissions.
4. Asian nations should construct LNG infrastructure to facilitate imports from countries with lower methane emissions, including the United States.
5. Asian countries that have carbon prices (including China, Japan, and South Korea) should, in time, consider adding a greenhouse gas import tax that regulates natural gas imports based on their lifecycle methane emissions. Carbon prices can and should be redesigned to give priority to low leakage natural gas.
6. Major greenhouse gas emitting Asian countries, especially China and India, who have not already done so should join the U.S., EU, and over 100 countries in the Global Methane Pledge to cut methane emissions from all national sources by 30% by 2030. It is notable that Russia has not joined this Pledge.
7. U.S. lawmakers and regulators (at the federal and state levels) should continue improving management of methane emissions — including measurement, validation, and policy frameworks — to work toward achieving the lowest leakage rates of any gas-producing and gas-exporting country in the world. U.S. regulators should specifically improve measurements of methane emissions by incorporating new methods, including satellites and other airborne measurements. A strong national inventory will bolster the effectiveness of any policy aimed at reducing methane emissions. U.S. regulators should pay special attention to ultra-emitters among oil and gas producers, including small producers and those in the Permian Basin.
While more aggressive regulation is necessary, the U.S. government should also use incentives and fees to challenge domestic oil and gas producers to a “race to the top” when it comes to controlling methane emissions. Several U.S. LNG exporting companies have taken measures in this direction, including “tagging” or disclosing the full lifecycle emissions of its LNG export cargoes in 2023, and new efforts to capture and store carbon at one of its U.S. export terminals.
In order to make greater amounts of natural gas available for export both Europe and Asia and to improve global climate outcomes and geopolitics while limiting domestic price, the United States must also expand the production of additional clean energy sources including renewable energy, nuclear power, geothermal and related technologies including electricity storage, carbon capture and storage, direct air capture and other advanced energy. As the Progressive Policy Institute noted in its previous reports from 2020 and 2021 on the role of natural gas in cutting domestic greenhouse emissions and those in Europe, the U.S. should enact $325 billion pending legislation to dramatically expand clean energy tax incentives this year, as well as invest in increase domestic production of gas, including expanding gas pipelines as needed.
Both gas exporting and importing governments should challenge oil and gas companies to show steady progress in reducing their methane emissions, including by encouraging companies to consider bundling their LNG shipments with carbon offsets that would enable exporters to achieve lower carbon status over the long-run, while ensuring offsets are high-quality. In time, importing nations are likely to reward these efforts with greater demand for low-emissions gas delivery.
International climate oversight bodies (including U.N. Framework Convention on Climate Change and International Panel of Climate Change) should strongly encourage all nations to provide accurate data on actual methane emissions from all sources, including oil and gas production. These organizations and IEA should also continue deploying methodologies capable of improving estimates of methane emissions in all countries, and particularly emphasize remote measurements in countries, such as Russia, that do not have robust independent estimates or transparent public processes for estimating inventories. Parties to the Paris Agreement are required to submit nationally determined contributions (NDCs), and the UNFCCC Secretariat should require each Party’s national climate plans to include plans to cut methane emissions from oil and natural gas, whether through production, exports and/or imports.
Independent third-party entities, such as nongovernmental organizations, should continue to conduct research into Russian methane emissions to fill the data gap that inhibits a thorough understanding of the magnitude of the emissions.
Appendix: Estimates of Russia and Untied States Oil and Gas System Methane Emissions from Existing Studies/Inventories and Derived Emissions Rates
Reported volumes of estimated methane emissions across sources come from the International Energy Agency (IEA) 2021 Methane Tracker Database and the IEA 2022 Methane Tracker Database that compiled estimates across published studies and inventories.46,47 The authors retrieved the data compiled by the IEA 2021 database in February 2022 and the data from additional studies reported by the IEA 2022 database in April 2022. IEA 2021 interactive figures reported what year the reported emissions covered and both IEA 2021 and 2022 databases report volume breakdowns by the segments of the oil and gas systems that were included in each study (e.g., upstream oil, upstream gas, downstream gas). As such, all estimated methane emission volumes included in our tables are the reported numbers for national totals across the entire oil and gas systems.
To calculate a derived percent of the country’s natural gas production lost as methane emissions based on the findings from each study, the authors divide the IEA 2021 and IEA 2022 compiled methane emission volumes by the total dry natural gas production volumes for the respective countries and base years reported by U.S. Energy Information Administration (EIA) datasets. Production data for both Russia and the U.S. comes from EIA’s International data set for all years of interest except for one. The U.S. volume for 2021 comes from EIA’s dry production data series.48 Before dividing, we convert the reported kt of methane for each source to billion cubic feet (assuming 1 kiloton of methane equals 0.051921 billion cubic feet of methane).
For example, Maasakkers et al 2019 estimate that in 2012 Russia emitted 10,413 kt (or 541 Bcf) of methane from across the country’s oil and gas system.49 EIA reports that in 2012 Russia produced 21,742 Bcf of dry natural gas. The authors then calculate the emission rate by dividing the total methane from Russia’s oil and gas systems in 2012 as estimated by Maasakkers et al 2019 by the Russian dry natural gas volume reported by EIA for 2012 (541/21,742= 2.49%).
NETL 2019 calculate the cradle through delivery emission rate of Russia natural gas via pipeline to Shanghai as 5.1% and of U.S. LNG to Shanghai, assuming gas comes from Appalachia, as 1.2% (see exhibit 6-8).50 This study may underestimate LNG methane emissions because NETL 2019 assumes Appalachian upstream methane emissions for its U.S. LNG calculation that may be lower than the upstream methane emissions for other major natural gas regions in the United States.
Paul Bledsoe is a strategic adviser for PPI, working on intersection of U.S. and global energy, climate, and economic policy. He is also a Professorial Lecturer at American University’s Center for Environmental Policy. Paul served as communications director of the White House Climate Change Task Force under President Clinton, as special assistant to U.S. Interior Secretary Bruce Babbitt, and communications director of the U.S. Senate Committee on Finance under former Chairman Daniel Patrick Moynihan.
He was formerly senior policy advisor to the Presidential Commission on the BP Oil Spill, director of strategy for the National Commission on Energy Policy, and a teaching fellow at Oxford University’s School of Geography and the Environment. Paul has been a leading figure in shaping two major climate agreements — the Paris Climate Agreement of 2015 and the Kigali Agreement to phase out HFCs of 2016. He writes often on climate and energy in the New York Times, Washington Post, Financial Times, Politico, USA Today, LA Times, The Hill and other leading publications. Paul received a B.A. with honors and a M.A from Ohio State University.
Clayton Munnings is a widely published environmental economist with over three dozen scholar articles and policy papers focused on carbon pricing and methane emission policies. He holds an A.S. from Monroe Community College, a B.S. from Cornell University, and an M.S. from UC Berkeley. He is completing his PhD at UC Berkeley with a focus on novel methods to create and identify high-quality carbon offsets.
Clayton currently serves as Strategic Advisor to the International Emissions Trading Association, Expert to Perspective GmbH’s International Initiative for Development of Article 6 Methodology Tools, and Board Member at Eartshot Now. He operates a consulting firm that provides advice to countries, corporations, and startups abating greenhouse gas emissions through carbon pricing, climate finance, and carbon offsets.
He has written climate laws for top-emitting countries, built carbon offset quality assurance frameworks for large companies, and designed investment strategies for novel approaches to climate finance. Previously, Clayton held roles as Researcher and Portfolio Manager at Kepos Capital LP, Economist in the Executive Office of the California Air Resources Board, Senior Research Associate at Resources for the Future, Short Term Consultant at the World Bank, and Youth Delegate to the UNFCCC for SustainUS.
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29. Ramón A. Alvarez et al., “Greater Focus Needed on Methane Leakage from Natural Gas Infrastructure,” Proceedings of the National Academy of Sciences 109, no. 17 (April 2012): pp. 6435-6440, https://doi.org/10.1073/pnas.1202407109.
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41. Joannes D. Maasakkers et al., “Global Distribution of Methane Emissions, Emission Trends, and OH Concentrations and Trends Inferred from an Inversion of GOSAT Satellite Data for 2010–2015,” Atmospheric Chemistry and Physics 19, no. 11 (2019): pp. 7859-7881, https://doi.org/10.5194/acp-19-7859-2019.
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A new report authored by the Progressive Policy Institute’s Paul Bledsoe and environmental economist Clayton Munnings finds that China and other Asian nations are rapidly moving toward natural gas to displace coal — but their efforts will not yield significant climate benefits if they don’t cut imports of high-methane leaking Russian gas. The report, which is the second in a series of papers on natural gas, is entitled “The Role of Natural Gas in Reducing Asia’s Greenhouse Gas Emissions.”
PPI argues Asian countries can reduce coal by substituting cleaner-burning liquefied natural gas (LNG), but must acknowledge that Russian gas piped to China emits higher emissions than Chinese coal. Thus, any pretense by China that using Russian gas reduces its overall emissions is false. This warning comes as Russian President Putin and Chinese President Xi announced a new proposal for a gas pipeline from Russia to China, called the “Power of Siberia 2.”
United States LNG delivered to China has, on average, 30% lower lifecycle greenhouse gas emissions than Chinese coal. The report authors argue that Asia should purchase LNG imports from the U.S. and other lower methane emitting sources, rather than sourcing dirty natural gas from Russia. Current purchases of oil and gas by China, India and other Asian countries are a major source of revenue for the Kremlin’s war on Ukraine.
“Not only are China and India funding Putin’s war machine by purchasing natural gas from the Kremlin,they are also increasing climate emissions, since Russian gas has higher lifecycle greenhouse gas emissions than coal due to massive Russian leaks of methane,” said Paul Bledsoe, Strategic Adviser for the Progressive Policy Institute. “It’s time the global climate community held China, India and other buyers of Russian gas accountable for the huge geopolitical and climate costs of their continuing purchase of Putin’s gas.”
“Asian countries importing gas should purchase liquified natural gas from the United States rather than piped natural gas from Russia based on comparative greenhouse gas emissions alone. This superior climate performance of liquified natural gas will increase if the United States continues to focus on measuring, verifying, and reducing methane emissions,” said Clayton Munnings.
Select key policy recommendations from the report include:
1. Asian governments should phase down and then halt the importation of Russian gas based on climate change, humanitarian, and geopolitical grounds.
2. Asian nations should also suspend and cancel the construction of natural gas pipelines from Russia since they increase lifecycle greenhouse gas emissions and are therefore inconsistent with climate goals.
3. In particular, China should cancel a proposed new gas pipeline from Russia (the so-called “Power of Siberia 2”) given its high lifecycle emissions.
4. Asian nations should construct LNG infrastructure to facilitate imports from countries with lower methane emissions, including the United States.
5. Asian countries that have carbon prices (including China, Japan, and South Korea) should, in time, consider adding a greenhouse gas import tax that regulates natural gas imports based on their lifecycle methane emissions. Carbon prices can and should be redesigned to give priority to low leakage natural gas.
6. Major greenhouse gas emitting Asian countries, especially China and India, who have not already done so should join the U.S., EU, and over 100 countries in the Global Methane Pledge to cut methane emissions from all national sources by 30% by 2030. It is notable that Russia has not joined this Pledge.
7. U.S. lawmakers and regulators (at the federal and state levels) should continue improving management of methane emissions — including measurement, validation, and policy frameworks — to work toward achieving the lowest leakage rates of any gas-producing and gas-exporting country in the world. U.S. regulators should specifically improve measurements of methane emissions by incorporating new methods, including satellites and other airborne measurements. A strong national inventory will bolster the effectiveness of any policy aimed at reducing methane emissions. U.S. regulators should pay special attention to ultra-emitters among oil and gas producers, including small producers and those in the Permian Basin.
Mr. Bledsoe’s first report, published prior to the Russian invasion of Ukraine in December 2021, focused on the European Union’s huge reliance on high-methane emitting Russian gas, which undermines the EU’s climate goals and provides the Kremlin a financial and political upper hand against the EU and its allies. Read the first report here.
Paul Bledsoe is a strategic adviser at the Progressive Policy Institute and a professorial lecturer at American University’s Center for Environmental Policy. He served on the White House Climate Change Task Force under President Clinton, at the U.S. Department of the Interior, as a staff member at the Senate Finance Committee and for several members of the U.S. House of Representatives. Read his full biography here.
Clayton Munnings is a widely published environmental economist with over three dozen scholar articles and policy papers focused on carbon pricing and methane emission policies. He currently serves as Strategic Advisor to the International Emissions Trading Association, Expert to Perspective GmbH’s International Initiative for Development of Article 6 Methodology Tools, and Board Member at Eartshot Now. He operates a consulting firm that provides advice to countries, corporations, and startups abating greenhouse gas emissions through carbon pricing, climate finance, and carbon offsets.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels and Berlin. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
The Progressive Policy Institute (PPI) released the following statement on the Inflation Reduction Act of 2022:
“PPI applauds Senator Joe Manchin and Majority Leader Chuck Schumer for returning to the negotiating table and agreeing on a historic reconciliation bill that would invest in clean energy, lower the cost of health care, and modestly reduce federal budget deficits. This bill advances precisely the kind of pro-growth, innovative climate policy that PPI has been calling for throughout the process and that America needs. It will not only spur new investments, create jobs, reduce emissions, and critically lower the cost of living for millions of Americans, but also strengthen our country’s economic future for generations to come.
“This deal is a major step forward for Congressional Democrats and the American people, and while it does not include as many legislative priorities as the original framework, PPI is encouraged to see a few well-funded programs that will result in transformational change rather than a broad progressive wish list. We are also encouraged that the deal includes a plan for taking up additional legislation to reform federal permitting processes later this year, which has long been a PPI priority.
“This package isn’t perfect. It doesn’t close the Medicaid coverage gap, or permanently fix the ACA subsidy cliff. More deficit reduction would have strengthened the legislation’s inflation-fighting potential. But the perfect cannot be the enemy of the good, especially when Democrats have an ideologically diverse caucus with no votes to spare in the Senate. Democrats should take the win now and continue to work on making further progress in these areas next Congress.
“Together with the CHIPS and Science Act and the bipartisan infrastructure law, the Inflation Reduction Act of 2022 will cement President Biden’s legacy of the largest increase in domestic public investment in modern history. Democrats in both chambers should act quickly and decisively to advance these bills and secure a stronger future for all Americans.”
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
Today’s surging oil and gas prices confront progressive climate activists with a discomfiting truth: Their campaign to vilify and suppress fossil fuel production has crashed headlong into Americans’ urgent appetite for affordable energy.
The green left is not happy with President Biden, who is pulling out all the stops to give Americans some temporary relief from punishingly high fuel prices. That includes jawboning U.S. oil companies to drill more, a widely panned proposal to suspend the federal gas tax and Thursday’s controversial visit to Saudi Arabia, whose leaders the White House has implored to boost production to stabilize world oil markets.
It’s true that high fuel prices are heightening the contradiction at the heart of the Biden administration’s climate and energy policies. If your overriding aim is to drive down consumption of fossil fuels, high prices are a good thing. But that’s a hard sell to working families struggling with $5 a gallon gas and soaring utility bills.
With the midterm elections looming, activists shouldn’t be too quick to pillory Biden — especially since it’s their premature if not utopian demands to abolish fossil fuels as soon as possible that have landed him and his party in this predicament.
ESG-oriented investing (Environment/Social/Governance) is a key market-oriented mechanism for using the financial system to assess material risk around generally agreed upon societal goals that go beyond profit-maximization. Environmental goals can include such factors as carbon emissions and water usage. Social goals can include diversity, labor standards, and data protection. Governance goals can include executive compensation and board composition.
Assessing the ESG-related performance of a company or country is an extremely data-intensive enterprise. Investors usually end up relying on one of a number of different companies that provide ESG ratings (also called scores or assessments), such as Sustainalytics (a Morningstar subsidiary) and MSCI (listed on the S&P 500). Parent companies of credit rating agencies (CRA) have also moved into the business of providing ESG scores, even as the credit rating agency arms of those companies increasingly incorporate ESG considerations into their credit ratings with greater transparency and consistency.
Considering how new the practice of non-financial evaluations is, ESG ratings from different firms often give very different results, depending on which measures are factored into the scoring process and how they are prioritized. One study suggested only a 31% correlation between ESG ratings produced by Sustainalytics and MSCI. While divergence of views can often be healthy, this degree of difference suggests a lack of shared data and a lack of agreement about the key drivers of ESG risk. By comparison the credit ratings market — another example of an “information market” — has had much more time to agree on many drivers of credit risk.
We applaud the recent proposal by the SEC to require more disclosure by public companies of climate-related risks. That is a good step that will provide investors with more information, help improve the ESG ratings process, and lead to more robust ESG ratings. We will also be able to better determine the connection between ESG ratings and financial performance.
The SEC is also looking at the potential for conflicts in this new area. The agency’s 2022 staff report on Nationally Recognized Statistical Ratings Organizations (NRSRO) raised questions about credit ratings produced by NRSROs, particularly those with ESG affiliates. The report noted that:
….in incorporating ESG factors into ratings determinations, NRSROs may not adhere to their methodologies or policies and procedures, consistently apply ESG factors, make adequate disclosure regarding the use of ESG factors applied in rating actions, or maintain effective internal controls involving the use in ratings of ESG-related data from affiliates or unaffiliated third parties. The Staff also identified the potential risk for conflicts of interest if an NRSRO offers ratings and non-ratings ESG products and services
The SEC was doing its job by raising these questions of methodology and potential conflicts as part of its regulatory oversight. Notably, the inspections did not produce any evidence of actual problems. Yet these concerns can easily be overstated, as they were in recent articles by the Wall Street Journal and Responsible Investor. It’s important to note that such issues of conflicts of interest and consistent application of methodologies arise in any market for information. In a data-driven world, companies that use data to provide third-party assessments of products, services, and other companies will always be under pressure to modify their assessments by those being assessed or with something to gain from the assessment. As I wrote in a January 2021 policy brief, available on the Progressive Policy Institute website:
In every part of the economy, the Information Age has made an exponentially increasing amount of data available to everyone. The difficult problem is extracting useful signals from the noise, especially when some market participants are actively taking advantage of opportunities to manipulate data, or to create false signals.
The key is to develop a set of processes and incentives that help manage new conflicts of interest. That’s certainly not an insurmountable problem, as the credit ratings agencies have shown. Indeed, credit rating agencies are known for their ability to apply their methodologies in a consistent and transparent fashion. In fact, that’s the essence of their business model. As I wrote in the policy brief:
The agencies assess the creditworthiness of the bonds according to published and detailed methodologies. In fact, there is literally nowhere else in the private sector that gives this level of transparency into the intellectual property of an organization, or that so rigorously documents their internal methodology for making decisions (imagine a newspaper committing itself publicly for how it chooses stories or does reporting, including reporting on advertisers).
True, the credit rating agencies came under criticism for their role in the 2008-2009 financial crisis. But the aftermath of the crisis, SEC oversight of CRAs was greatly increased. As Jessica Kane, then director of the SEC’s Office of Credit Ratings, noted in a 2020 speech: “In the span of 15 years, the credit rating industry has gone from being largely unregulated to being subject to a robust disclosure and examination regulatory regime.” As a result, the CRAs consistently produce strong signals that are useful for market participants. ESG ratings firms should strive to do the same.
Join the Progressive Policy Institute’s Paul Bledsoe for a virtual educational webinar for Congressional staff on how the European Union’s reliance on imports of methane-heavy Russian gas is undermining international climate goals and funding a geopolitical crisis.
The dominance of Russia in the European gas market is troubling — with Russia providing nearly half of total EU gas imports in 2020. This Russian natural gas has extremely high rates of fugitive emissions of methane, a super-potent greenhouse gas, and is a leading factor in Russia being by far the world’s largest methane emitter.
However, the United States can reduce the EU’s reliance on Russian gas. The Biden Administration, Congress, and the U.S. natural gas industry are beginning to undertake a series of strategic steps to make U.S. gas super-low emitting compared to gas from Russia and other major exporters.
WHAT: Virtual Congressional briefing for staff and interns
WHEN: Wednesday, January 26; 1:00-2:00pm ET; Zoom
PANELISTS: Paul Bledsoe, Senior Advisor to the Progressive Policy Institute and former Communications Director of the Clinton White House Climate Change Task Force
Additional Panelists TBA
With Russian troops massing on Ukraine’s border, and President Biden urging Russia’s Vladimir Putin not to invade, the geopolitics of Russian natural gas are growing increasingly intolerable. European gas imports are a mainstay of cash for Putin’s regime, with over one-third of Kremlin funding coming directly from oil and gas revenue, even as Russia increases repression at home, attempts to undermine democratic elections abroad and continues to use its gas as a geopolitical weapon against Europe.
If that weren’t enough, Russia is the world’s largest emitter of methane, a super climate pollutant whose mitigation is now crucial to global climate change efforts. The EU gets more than 25 percent of its total gas and half its gas imports from Russia’s leaky, antiquated gas production system with emissions of methane eight times higher than EU domestic gas. With methane leaks of at least 5 to 7 percent, the EU is addicted to Russian gas that increases warming twice as much as the coal it’s meant to replace.
Report Finds Opportunity for Lower-Methane U.S. LNG to Gain Market Share in EU and Globally While Reducing Emissions and Cutting Kremlin Revenue
A new report authored by the Progressive Policy Institute’s Paul Bledsoe finds that the European Union’s huge reliance on high-methane emitting Russian gas undermines the EU’s climate goals. The report, entitled “The Role of Natural Gas in Limiting European Union Emissions: Key Opportunities to Cut Methane, Coal and CO2,”also has major implications for U.S. and global climate policy. Cutting methane from gas, first in the EU and U.S., then globally, can greatly reduce near-term emissions, speeding up the phase out of coal in the EU and Asia, and providing new market share for lower-methane U.S. liquefied natural gas exports. This report is the first of four reports on the role of natural gas in reducing emissions.
“Due to massive methane leaks in its production system, Russian gas is worse than coal for the climate, yet Europe, the world’s largest gas importer, gets 25% of its total gas supply from Russia right now. To meet climate goals, the EU must adopt regulations to require low methane gas, including from imports. This can provide a new opportunity for U.S. LNG exports to Europe to outcompete Russia on lower emissions, as strict U.S. methane regulations and the gas industry rapidly reduce methane from U.S. gas production,” said Paul Bledsoe, Strategic Adviser for the Progressive Policy Institute. “Russia also continues to use its gas as a geopolitical weapon against Europe, threatening Ukraine with impunity and handing Putin and Gazprom record profits because of the EU addiction to the Kremlin’s gas. The U.S. and EU each have strong climate and geopolitical incentives to limit natural gas emissions and Russia’s malign policies by displacing Russian gas with both cleaner gas and renewable energy.”
The dominance of Russia in the European gas market is troubling — with Russia providing nearly half of total EU gas imports in 2020. This Russian natural gas has extremely high rates of fugitive emissions of methane, a super-potent greenhouse gas, and is a leading factor in Russia being by far the world’s largest methane emitter.
However, new sources of gas, including liquefied natural gas (LNG) imports from the United States and other clean sources, can reduce the EU’s reliance on Russian gas. The United States has long had better methane and carbon dioxide reporting standards and measurements than other gas exporters, leading the world in both methane science and efforts to reduce methane emissions. And importantly, the Biden Administration, Congress, and the U.S. natural gas industry are beginning to undertake a series of strategic steps to make U.S. gas super-low emitting compared to gas from Russia and other major exporters.
PPI’s report calls for an international effort to accurately verify and monitor methane emissions from domestic and imported gas and then regulate emissions to as close to zero as possible. These actions, if taken together, could play a major role in reducing greenhouse as global emissions as renewable energy grows.
Select key recommendations from the report include:
The EU should put in place rigorous monitoring, reporting and verification rules covering all natural gas, both domestically produced and imported.
Over the next few years, the EU should require gas exporters to accurately verify lifecycle emissions of methane as a condition for gaining access to the EU market.
The EU and United States should harmonize their monitoring, reporting, and verification (MRV) regimes of lifecycle emissions from natural gas as a key interim step in this process. This step is crucial in setting a global benchmark for MRV emissions from gas.
The EU should consider adopting stringent methane emissions regulations for domestically produced natural gas immediately, and then extend these requirements to imported gas at the earliest opportunity.
The EU should seek to diversify and expand its natural gas importation sources both to reduce gas prices to phase out coal and to pressure importers of all types to begin to cut its lifecycle methane and carbon emissions.
The United States should accelerate its already significant measures to drive down U.S. methane emissions from natural gas production and transportation.
The EU should measure precisely the extent to which Russian gas with high fugitive methane emissions is undermining progress toward both EU and global climate change goals. Specifically, Brussels should study potential emissions from gas transported through the Nord Stream 2 pipeline before allowing the pipeline to become operational.
Over time, the EU should require all natural gas used in the EU achieve super-low methane and CO2 emissions, as gas will be needed to displace coal in the EU to meet climate goals.
Increasing low-emitting U.S. liquefied natural gas imports to the EU can play a key role in this process, and should be a domestic and international climate change policy priority for both the EU and U.S.
The EU should prioritize LNG port construction, access, and related infrastructure to spur a competition toward super-low emitting gas, and to displace Russian gas.
The EU can advance its own energy and security interests, as well as its climate goals, by acting on its stated policy of reducing its dependence on Russia gas, cutting imports by at least half during the current decade.
Read the full report:
Paul Bledsoe is a strategic adviser at the Progressive Policy Institute and a professorial lecturer at American University’s Center for Environmental Policy. He served on the White House Climate Change Task Force under President Clinton, at the U.S. Department of the Interior, as a staff member at the Senate Finance Committee and for several members of the U.S. House of Representatives. Read his full biography here.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels and Berlin. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
The European Union in recent actions and the United States under President Joe Biden have both offered bold visions for deeply reducing greenhouse gas emissions and asserting leadership in the global fight against climate change. Each is taking important steps to reduce harmful emissions from natural gas, including more aggressive methane controls, emissions reporting, and investments in carbon capture and storage technology.
These initiatives hold great promise in helping Europe lessen its dependence on coal and other dirtier fuel types, as well as ensure that gas imported into the EU is as clean as possible to help Europe meet its climate goals.
For example, on July 14, 2021, the European Union announced sweeping new climate change goals in its “Fit for 55” directive. The extraordinarily ambitious program requires the EU to reduce its greenhouse emissions by 55% below 1990 levels by 2030, relying on the EU carbon trading and pricing market, new Green Deal programs, a wide range of clean energy subsidies, and the beginning of some fossil fuel use restrictions. Most climate experts see the EU proposal as the first-ever attempt by one of the world’s three major centers of economic growth and innovation to reduce emissions in keeping with the key Paris agreement goal of reaching net zero emissions globally by 2050 and keeping temperatures from rising more than 1.5 Celsius.
However, today, the EU still gets at least 15% of its electricity from coal, with far higher percentages in Germany, Poland, and other eastern European countries. Analysis by the International Energy Agency and other leading experts predicts that the EU will use a mix of renewable energy and natural gas to displace coal. Indeed, most studies find that gas use in the EU will grow over the next decade to balance increased intermittent renewable energy on the EU electrical grid as other forms of baseload power (coal and much nuclear power) are phased out.
Yet even as the European Union undertakes these unprecedented steps to reduce emissions, it is increasing its reliance on natural gas from Russia’s notoriously leaking, antiquated, and nontransparent gas production and transport system, which has extremely high fugitive emissions of methane, a super-potent greenhouse gas. The EU imports about 40% of its total natural gas from Russia — despite data showing that Russian gas is worse from a climate change perspective than the very coal natural gas is meant to displace. Indeed, new data from the International Energy Agency (IEA) shows that Russia is the world’s largest methane emitter, with massive new “super-emitting” methane plumes detected this year, even as studies how Russia has consistently lied about and covered up its emissions for decades.
The EU’s importation of high methane emitting Russian gas is a profound flaw in the EU’s climate plans which may prevent it from truly reaching its 2030 emissions goals. While huge methane emissions from Russian gas imports may not be technically counted under the EU’s greenhouse gas accountancy system, they are nonetheless causing massive greenhouse gas emissions of methane (84 times more potent than CO2) at precisely the time leading experts say cutting methane emissions is the key to keeping temperatures below the Paris targets of 1.5°C and 2°C.
Indeed, in mid-September 2021, the EU recognized the urgent need to cut emissions of methane in an agreement with the United States, the United Kingdom, and other nations to reduce overall methane emissions from all sources within their borders by 30% before 2030. Such admirable efforts to reduce methane, however, will be swamped and rendered ineffectual by global methane emissions from Russian gas and other sources of the EU’s gas imports which are outside of this agreement.
In recent months, in fact reducing methane emissions has become a centerpiece of climate protection, as evidenced by the EU, U.S. and over 100 other nations signing a pledge at the recent UN climate negotiations in Glasgow, Scotland, to cut methane by 30% by 2030. However, Russia, Iran, Qatar and other major gas exporters and methane emitters have not signed the pledge.
This report finds that the EU has an array of new options to reduce near-term dependence on Russian gas. These include greater renewable energy use, electricity storage technologies, and imports of lower-emitting U.S. liquefied natural gas. Current high natural gas prices are roiling European markets and consumers, spotlighting the increasing need for larger liquefied natural gas shipments from the US and other sources, both this winter and for years to come. In fact, specific methane reducing actions by the EU and U.S. can play the key role in forcing all global gas imports to lower their emissions dramatically by creating demand competition for low-emitting gas.
The most important imperative is for the lifecycle of methane emissions from natural gas production to be driven down as close to zero as possible by both major exporters and importers. In the United States, President Joe Biden and Congress are acting to both impose stringent regulations on methane emissions and take new steps to sharply reduce fugitive emissions and the venting of gas from existing and old unused wells. Such efforts are crucial to limiting near- term temperatures globally as a series of studies have concluded, especially the August 2021 urgent report by the United Nations International Panel on Climate Change.
Moreover, as the IEA noted in its “methane tracker” report released in January 2021, it is in the “strong interest” of natural gas companies to cut methane emissions, since, over time, users will demand, and nations will require, the lower- emitting methane gas sources. “Aside from the environmental gains, oil and gas operations with lower emissions intensities are increasingly likely to enjoy a commercial advantage,” the report said.
Nonetheless, government action to limit methane globally is critical. This should include requirements by the EU, the world’s largest natural gas importer, that methane emissions from both domestic and imported gas be accurately verified and monitored, and then regulated to as close to zero as possible. Such a “global race to near-zero fugitive methane emissions” among natural gas competitors would dramatically cut global emissions, even as gas displaces remaining coal in Europe, Asia, and elsewhere. In this way, super-low-methane gas exports (and also low-CO2 gas with carbon capture and storage) can play a major role in reducing greenhouse gas global emissions even as renewable energy grows.
The IEA and other top analysts believe that the EU will have to use natural gas to displace remaining coal use and balance the EU grid, with gas over the next two decades providing baseload electric power as intermittent renewable energy becomes a higher percentage of the EU’s power supply and as the demand for electricity increases due to electrification of transportation and broader growth. Methane from oil and gas is Europe’s third largest source of greenhouse gas emissions. Thus, reducing methane emissions from all EU natural gas sources, including imports, is essential to meet the European goal of cutting emissions 55% compared to 1990 levels by 2030.
The EU imports more than 60% of its gas, and total methane emissions from gas-exporting countries like Russia are at least three and eight times the emissions from the domestic EU gas supply chain. If these “imported methane emissions” are calculated by the European Union as it determines its overall emissions profile, they will swamp progress made on other fronts and prevent true reduction of its total emissions. The EU also imports more than 40% of its total natural gas from Russia. Yet data consistently shows that Russian gas is even worse than coal in contributing to greenhouse gas emissions. Russia has deliberately prevented attempts to fully assess its high methane emissions for decades, choosing instead to point the finger at other gas producers and use the echo chamber of its influence operations in Europe to attempt to discredit attempts to hold Moscow to account.
The EU Commission has committed to reducing methane emissions in its domestic energy sector and engaging in a dialogue with its international partners about what carrots and sticks could be used to lower the methane profile of imported gas. But it has not yet promulgated standards to accomplish these goals.
Fortunately, new and more accurate methane detection technologies are increasingly being deployed. They should become standard in the world’s major natural gas producing nations. Nations that refuse to have their gas monitored and verified should be denied import status by the EU and other major importers over time.
New sources of gas, including liquefied natural gas (LNG) imports from the United States and other clean sources, can reduce the EU’s reliance on methane-heavy Russian gas. But of course, that will require the United States and other exporters to drive down methane and carbon dioxide emissions from the lifecycle as close to zero as possible, and verify their reductions with credible methodologies.
Moreover, the geopolitical costs of Russian gas continue to plague the EU broadly, and Ukraine and other Eastern European nations specifically. EU imports of Russian gas have actually increased since Moscow’s illegal annexation of the Crimea in 2015. Over time, limiting Russian gas imports thus could diminish its political leverage over Europe while also helping the EU achieve its climate goals.
Given these realities, European support for the Nord Stream 2 pipeline from Russia to Germany is a massive strategic mistake. Making the pipeline operational would clearly increase Russia’s leverage over Ukraine and other Eastern European countries. In addition, allowing Russia to operationalize the pipeline will dramatically reduce the EU’s leverage to compel the state- owned Russian monopoly Gazprom to reduce its methane emissions.
The United States has long had better methane and carbon dioxide reporting standards and measurements than other gas exporters, leading the world in both methane science and efforts to reduce methane emissions. More importantly, the Biden Administration, Congress, and the U.S. natural gas industry are beginning to undertake a series of strategic steps to make U.S. gas super- low emitting compared to gas from Russia and other major exporters. This would give U.S. gas a competitive advantage in world markets, boost U.S. LNG sales abroad, and enable European gas importers to make deeper cuts in greenhouse gas emissions as they transition away from burning coal.
Summary of Key Recommendations:
• The EU should put in place rigorous monitoring, reporting and verification rules covering all natural gas, both domestically produced and imported.
• Over the next few years, the EU should require gas exporters to accurately verify
lifecycle emissions of methane as a condition for gaining access to the EU market.
• The EU and United States should harmonize their monitoring, reporting, and verification(MRV) regimes of lifecycle emissions from natural gas as a key interim step in this process. This step is crucial in setting a global benchmark for MRV emissions from gas, given the much greater transparency and accuracy of emissions measurements from natural gas produced in the EU and U.S.compared to other gas exporters to the EU.
• The EU should consider adopting stringent methane emissions regulations for domestically produced natural gas immediately, and then extend these requirements to imported gas at the earliest opportunity.
• The EU should seek to diversify and expand its natural gas importation sources both to reduce gas prices to phase out coal and to pressure importers of all types to begin to cut its lifecycle methane and carbon emissions.
• The United States should accelerate its already significant measures to drive down U.S. methane emissions from natural gas production and transportation. In the near-term, the U.S. should aim at making its gas super-low emitting, with fugitive emissions of less than 0.5% of total volume, by far the lowest emitting in the world. In time, U.S. gas should be even lower-emitting, with close to zero methane emissions, and dramatically increase the deployment of carbon capture and storage technologies for CO2 emissions from gas.
• The EU should measure precisely the extent to which Russian gas with high fugitive methane emissions is undermining progress toward both EU and global climate change goals. Specifically, Brussels should study potential emissions from gas transported through the Nord Stream 2 pipeline before allowing the pipeline to become operational.
• Over time, the EU should require all natural gas used in the EU achieve super-low methane and CO2 emissions, as gas will be needed to displace coal in the EU to meet climate goals. Such EU actions during the current decade can help not only meet its own greenhouse gas emissions goals for 2030, but begin the process of bringing natural gas emissions to the lowest possible levels around the world and using it to displace global coal use.
• Increasing low-emitting U.S. liquefied natural gas imports to the EU can play a key role in. this process, and should be a domestic and
international climate change policy priority for both the EU and U.S.
• The EU should prioritize LNG port construction, access, and related infrastructure to spur a competition toward super-low emitting gas, and to displace Russian gas.
• The EU can advance its own energy and security interests, as well as its climate goals, by acting on its stated policy of reducing its
dependence on Russia gas, cutting imports by at least half during the current decade.
With clean energy a central component of the Biden Administration’s climate strategy, any divestment from existing oil and gas projects should go hand in hand with exploring geothermal energy, a largely untapped renewable resource, argues a new report from the Progressive Policy Institute (PPI)’s Innovation Frontier Project.
The report, authored by Daniel Oberhaus and Caleb Watney and titled “Geothermal Everywhere: A New Path for American Renewable Energy Leadership,” identifies the technological, political, and economic reasons that the U.S. has failed to utilize its valuable geothermal resources, along with actionable policy recommendations to lay a new foundation for green energy and international geothermal expansion.
“The far-reaching potential of geothermal energy provides a rare opportunity for the United States to capitalize upon a new renewable energy pathway, not just for domestic production but sustainable development globally. With strong leadership and smart policy–as Oberhaus and Watney identify–we can rapidly accelerate the development of geothermal projects, leading the world on climate while encouraging innovation and creating jobs,” said Jack Karsten, Managing Director of the Innovation Frontier Project at PPI.
Oberhaus and Watney argue that while less than 0.5% of U.S. electricity generation is derived from geothermal resources, our abundant hot rock resources and deep talent pool in the oil and gas sector uniquely prepare us to lead on that technology. They conclude that with the right policy implementations, geothermal energy production could increase 26-fold by 2050.
The report makes the following recommendations for incentivizing geothermal investment and expanding production capacity:
Streamline the federal permitting process for geothermal projects.
Increase the federal budget for large scale geothermal R&D projects, particularly those led by public-private partnerships.
Create incentives for geothermal generation in state electricity markets.
Establish federal innovation prizes, or related mechanisms, for the development of key geothermal technologies.
Reskill oil and gas workers for geothermal projects through federal jobs programs and private investment.
Read the report and expanded policy recommendations here:
Based in Washington, D.C., and housed in the Progressive Policy Institute, the Innovation Frontier Project explores the role of public policy in science, technology and innovation. The project is managed by Jack Karsten. Learn more by visiting innovationfrontier.org.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
At the 11th hour of climate negotiations in Scotland last week, the U.S. and China released a “Joint Glasgow Declaration on Enhancing Climate Action in the 2020s” outlining increased cooperation on a wide range of climate and clean energy topics. The communique’s careful language was redolent of Cold War détente documents, increasing a sense that climate change bargaining with China, Russia and other adversaries is becoming like Cold War nuclear nonproliferation negotiations: failure could be catastrophic, so enhanced cooperation is crucial, but often slow-going.
By PPI’s Paul Bledsoe, Durwood Zaelke and Gabrielle Dreyfus, for the New York Times.
If the years of devastating droughts, floods, heat waves and wildfires since the Paris climate agreement was adopted have taught us anything, it’s that we have underestimated the pace of extreme, destabilizing climate change.
But delegates meeting at a world climate conference in Glasgow have more to do: For the security of the planet, they need to act further and faster to limit near-term temperature increases.
Even as Congressional Democrats on both the left and center continue to bargain over the scope of President Biden’s “Build Back Better” economic, climate, and social funding plans, North Carolina’s Democratic Governor Roy Cooper has forged an agreement on a major climate change bill with Republicans in the state legislature. The legislation will likely be considered by both the North Carolina Senate and House later this week.
Gov. Cooper was able to achieve significant climate improvements in the legislation supported by Republicans through tough negotiations, including increasing the greenhouse gas emissions reductions under the bill from 64% to a remarkable 70% by the end of this decade. The legislation will shut down five high-polluting major coal-fired power plants, grow renewable energy substantially by least 4,700 megawatts over the next decade (enough to power millions of homes), and fund planning for a possible new advanced nuclear power plant within the state.
Importantly, Gov. Cooper was able to retain the regulatory authority of the North Carolina Public Utilities Commission while also guaranteeing that they follow least cost guidelines in setting consumer rates. In particular, the governor insisted on stripping out mandates limiting the Commission’s options regarding what kind of generation would replace the retired coal plants, allowing the Commission to determine which new sources of power can best keep costs down, cut emissions, and ensure consumer electricity reliability. The legislation is expected to create thousands of new jobs over the next decade, while also including assistance for low-income households.
It is worth remembering that President Biden also gained bipartisan support in the U.S. Senate for his major infrastructure bill, that contains a series of major climate change measures. And it is notable that many of the 19 Senate Republicans who voted for the infrastructure bill have lobbied their House Republican colleagues to support the measure over the objections of the House Republican leadership. Congressional negotiations now hinge on getting agreement among moderates and liberals on the scope of the climate, economic, and social legislation using the budget reconciliation process.
President Biden has indicated that the scope of the reconciliation legislation may include between $1.9 and $2.3 trillion in overall funding. The Progressive Policy Institute has issued a detailed budget proposal which includes $600 billion in climate change funding as well as other key economic and social priorities for a total about $2 trillion, written by PPI budget expert Ben Ritz and PPI President Will Marshall. It is a principled compromise emphasizing inclusion of key programs that will be most helpful to the American people, and one that Congressional Democrats on both left and center should consult closely as they attempt to rapidly conclude their own negotiations. And they should also take inspiration from the important and ambitious climate change work of Governor Cooper and his colleagues in North Carolina.
Rather than cutting corners and using gimmicks to cram the entire progressive wish list into a smaller bill, PPI believes the party’s goal should be a more focused and disciplined reconciliation bill that sets clear priorities and accomplishes a few big objectives well. Specifically, this report outlines a bold plan to deliver on three urgent priorities of the Democratic party within the confines of a roughly $2 trillion bill: supporting working families, combating climate change, and expanding access to affordable health care for those in need.
“Despite the drama last week, President Biden and Democrats in Congress can still deliver the historic economic and social investments they promised during the campaign — but they need to spend smarter, not just bigger. Our blueprint is a reality-based approach to crafting the reconciliation bill, which will allow for an enormous advance of progressive government. Now is the time for the party to come together and show America they can govern,” said Ben Ritz, Director of the Center for Funding America’s Future.
“We urge Democrats to compromise around a set of urgent priorities the American people can understand, develop a consensus plan to fully pay for it, and work in a radically pragmatic spirit to get this big progressive win across the finish line. That’s the best way to help President Biden and their party deliver for the American people,” said Will Marshall, President of the Progressive Policy Institute.
The bipartisan infrastructure bill passed by the U.S. Senate in August remains snagged by internal disagreements among Congressional Democrats about the size and cost of the follow-on social investment package party leaders hope to pass with reconciliation rules that are not subject to a Republican filibuster. Democrats will likely need to reach a compromise on the reconciliation package by October 31st so they can pass the infrastructure bill before funding for the nation’s highway program expires.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
Launched in 2018, PPI’s Center for Funding America’s Futureworks to promote a fiscally responsible public investment agenda that fosters robust and inclusive economic growth. We tackle issues of public finance in the United States and offer innovative proposals to strengthen the foundation of our economy and build shared prosperity.
Today, the Progressive Policy Institute hosted an event with U.S. Senator John Hickenlooper (D-CO) and a panel of energy experts, focused on expanding power line capacity to enable renewable energy deployment.
“Senator Hickenlooper has forged a compelling record as a leader on clean energy and the fight against climate change, from his service as Governor of Colorado to the U.S. Senate. PPI was grateful to have facilitated this engaging roundtable with the senator and our panel of distinguished experts, centering the goals of maintaining the integrity of the electrical grid, expanding capacity while lowering consumer costs, and aggressively confronting climate change with innovative, forward-thinking solutions. Prioritizing these efforts will deliver benefits from public health, to climate, to cost reduction — while protecting our environment and driving job creation,” said Paul Bledsoe, PPI Strategic Advisor and moderator for the event.
Watch the event livestream here:
Senator Hickenlooper serves on the Senate Committee on Energy and Natural Resources.
“There are lots of benefits from this. It’s going to provide revenue and jobs in rural communities — in other words, this is going to really tie together the country,” said Senator Hickenlooper during the event. “…By investing in transmission and the grid, we’re going to get a level of resiliency that, based on what we’ve seen this year, is sorely lacking in the existing system.”
This event’s panelists included Donnie Colston, Director of Utilities for IBEW; Bob Kump, President of Avangrid; Sue Tierney, energy analyst and author of the National Academy Sciences Report; Macky McCleary, energy consultant and former Rhode Island Utility regulator; and Bill Parsons, Chief Operating Officer for the American Council on Renewable Energy.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
