issue: Energy & Environment

Asian Imports of Dirty Russian Natural Gas Fail to Cut Emissions, Finds New Report from PPI; Cleaner Sources of LNG Needed to Achieve Climate Goals

Posted on by The Progressive Policy Institute

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.

Read and download the full report:

 

https://www.progressivepolicy.org/wp-content/uploads/2022/08/PPI-Asia-Emissions-Final-1.pdf

 

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.

Follow the Progressive Policy Institute.

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PPI Statement on Reconciliation Breakthrough

Posted on by The Progressive Policy Institute

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.

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Find an expert at PPI.

Marshall for The Hill: Green dreams collide with energy crisis reality

Posted on by The Progressive Policy Institute

By Will Marshall, President and Founder of PPI

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.

Read the full piece in The Hill.

ESG Ratings and the Regulation of Information Markets

Posted on by The Progressive Policy Institute

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.

EU’s Reliance on Dirty Russian Gas – a Climate and Geopolitical Crisis

 

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 briefing will dive deep into Paul Bledsoe’s recent report, entitled  “The Role of Natural Gas in Limiting European Union Emissions: Key Opportunities to Cut Methane, Coal and CO2.”

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

Download the Full Report.

RSVP Here.

Please note: This bipartisan briefing is open to all Congressional staff and interns. The panel will share policy proposals to address this issue.

Bledsoe for The Hill: Russian gas is a climate and security disaster

Posted on by The Progressive Policy Institute

By Paul Bledsoe

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.

Read the full piece in The Hill.

EU Imports of Methane-Heavy Russian Gas Undermine Climate Goals Finds New Report from PPI; New EU Methane Regs are Needed

Posted on by The Progressive Policy Institute

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.

Follow the Progressive Policy Institute.

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The Role of Natural Gas in Meeting Global Energy and Climate Change Goals

Posted on by The Progressive Policy Institute

EXECUTIVE SUMMARY

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.

 

Download and read the full report:

 

 

U.S. Primed to Harness Untapped Geothermal Energy Potential, Argues New Report from PPI’s Innovation Frontier Project

Posted on by The Progressive Policy Institute

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.

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Media Contact: Aaron White; awhite@ppionline.org

Bledsoe for The Hill: Can America prevent a global warming cold war?

Posted on by The Progressive Policy Institute

By Paul Bledsoe

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.

Yet, the climate crisis doesn’t permit the luxury of time. Leading science finds that to limit devastating near-term climate impacts, and reduce risks of runaway warming, China especially must cut its emissions as soon as possible this decade, not just in the long-term.  So far, however, despite the new declaration, and climate discussions this week between President Joe Biden and Chinese President Xi Jinping, Beijing has made no such commitment. In fact, Chinese coal use just reached an all-time high.

Read the full piece in The Hill. 

Bledsoe for the New York Times: How to Limit Temperature Increases in the Very Near Term

Posted on by The Progressive Policy Institute

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.

The world has warmed by about 1.1 degrees Celsius from preindustrial levels, much of it occurring since 1950, and the pace continues. That’s why it was so important that more than 100 countries joined a coalition led by the United States and the European Union last week to cut global emissions of the potent greenhouse gas methane by at least 30 percent by 2030.

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.

Read the full piece in the New York Times.

Gov. Cooper’s Ambitious Climate Deal in North Carolina Should Inspire Democrats in Congress

Posted on by The Progressive Policy Institute

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.

PPI Unveils Radically Pragmatic Blueprint for Reconciliation

Posted on by The Progressive Policy Institute

Today, the Progressive Policy Institute’s Center for Funding America’s Future released a focused blueprint for delivering on President Biden’s promise to Build Back Better while addressing the concerns of moderates who cannot support $3.5 trillion of new spending. The report is titled “Reconciling with Reality: The top priorities for building back better,” and is authored by Ben Ritz, Director of the Center for Funding America’s Future.

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.

Read the blueprint here:

 

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 Future works 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.

Follow the Progressive Policy Institute.

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Media Contact: Aaron White – awhite@ppionline.org

Senator Hickenlooper Joins PPI Event with Energy Experts on the Future of U.S. Clean Energy 

Posted on by The Progressive Policy Institute

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.

Follow the Progressive Policy Institute.

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Media Contact: Aaron White – awhite@ppionline.org

Bledsoe for NYDN: Climate devastation is upon us. Congress must act.

Posted on by The Progressive Policy Institute

By Paul Bledsoe

Last week, on the 16th anniversary of Hurricane Katrina, Hurricane Ida unleashed 150 mile-an-hour winds and slammed into New Orleans, super-fueled to huge size and rain-making power by the Gulf of Mexico whose temperatures are 3 to 5 degrees higher than the average just 30 years ago. In its wake, more than a million people in Louisiana and neighboring states have been left without water, power or air conditioning amid stifling hundred-degree heat. Then the remnants of Hurricane Ida delivered torrential rain and flooding in Pennsylvania, New Jersey and New York so intense it killed at least 40 people across the region while paralyzing New York City. Even before the Northeast flooding, economic costs from Ida were estimated to be $80 billion.

Meanwhile, on the other side of the country, another devastating year of fire fueled by climate change-exacerbated drought and high temperatures keeps getting worse. The massive Caldor fire, already more than 200,000 acres, has been roaring through the Lake Tahoe area, sending tens of thousands of citizens fleeing in chaos. Caldor was only the second fire in history to begin on the western slope of the Sierra Nevada mountains and cross to the eastern side. Last year alone, five of the ten largest fires in California history occurred, burning over 4.2 million acres, killing 30 people, and shockingly becoming the new normal.

Read the full piece in New York Daily News.

Improving Electricity Transmission Siting Opportunities to Meet America’s Consumer, Economic, and Clean Energy Climate Goals

 

Join the Progressive Policy Institute as we convene a virtual event on improving the siting opportunities for electricity transmission lines on September 14 at 10:00 AM ET. The event will generate a discussion focused on timely and critical questions including:

• What scale of the transmission line expansion is needed to fulfill President Biden’s goal of 100% clean energy from the electric sector by 2035?
• How do America’s current planning, siting and permitting federal and state laws and practices interfere with or enable this expansion?
• What are the prospects of addressing this challenge in the infrastructure bill or other legislative vehicles in Congress?
• What is the proper relationship between federal and state governments on electric transmission line planning?

Panelists:

• Donnie Colston, Director of Utilities, IBEW
• Bob Kump, President of Avangrid
• Sue Tierney, energy analyst and author of recent National Academy of Sciences Report
• Macky McCleary, Energy Consultant and former State of Rhode Island utility regulator
• Bill Parsons, Chief Operating Officer, American Council on Renewable Energy

Moderated By: Paul Bledsoe, Strategic Advisor, PPI

With a SPECIAL MESSAGE from U.S. Senator John Hickenlooper (D-CO)!

Register here.