Liquefied natural gas (LNG) emits significantly less than coal-fired power generation, even when shipped long distances, according to new research from Rystad Energy. LNG produced in the US and shipped to Asia can emit up to 50% less than the cleanest coal power plants. However, variations in LNG and coal sources, power plants, and methane emissions introduce uncertainties.
Global natural gas production reached over 4,000 billion cubic meters (Bcm) last year, with continued growth expected. LNG is seen as crucial in the energy transition away from coal, but questions about its total value-chain emissions remain.
Rystad Energy assessed total emissions for coal-to-power and LNG-to-power value chains, including carbon dioxide and methane, from extraction to end-use. The study focused on US LNG shipped to Asia, considering the US’s dominant role in the global LNG market. By 2030, global LNG supply is expected to reach 850 Bcm annually, with 30% from the US. LNG is set to compete with coal in Asia’s power generation market.
Coal’s value chain has a significantly higher carbon dioxide emission footprint than LNG, primarily due to end-use emissions. However, methane emissions introduce major uncertainties. New measurement technologies, such as satellite imagery, have revealed higher-than-expected methane emissions in both the oil & gas and coal value chains. This uncertainty affects conclusions about using natural gas as a transition fuel.
One challenge in assessing methane emissions in LNG and coal value chains is the lack of granular measurement data. Rystad Energy supplements reported and modeled emissions data with global satellite methane plume analysis, although limitations exist, such as smaller plumes not being detected.
“Accurately quantifying emissions is essential to understanding an energy source’s full environmental impact. With more data and measurement options, consumers and buyers can better ensure gas cuts emissions compared to coal. Emissions policies and methane regulations could lead to price differences depending on carbon competitiveness,” says Patrick King, senior analyst at Rystad Energy.
Rystad Energy created high-case and low-case scenarios for LNG and coal emissions. The low case for US-Asia LNG assumes optimal conditions: upstream production in the Appalachian basin, electrified liquefaction, shipping via the Panama Canal, and ultra-efficient power generation. The high case assumes above-average emissions intensity, avoiding the Panama Canal, and less-efficient gas turbine power generation. For coal, the low case assumes high-quality domestic coal and modern ultra-supercritical power plants, while the high case assumes low-quality coal and aging subcritical plants.
Most US-Asia LNG-to-power deliveries have a lower emission footprint than domestic coal-to-power, even with high methane leakage rates. Some Asian coal-power stations could emit less than high-emitting LNG sources, but these are exceptions. For LNG to have higher emissions than coal, gas value chain leakage rates would need to exceed 6-10%. Most US LNG comes from basins with low methane emissions, like the Haynesville and Permian.
Reducing methane leakages is crucial for the LNG industry to widen the emissions gap with coal, allowing natural gas to play its optimal role as a transition fuel. Improved methane monitoring and identification technologies will help reduce emissions throughout the LNG value chain. Conversely, coal-to-power has fewer opportunities to reduce its emissions footprint, ensuring LNG’s growing emissions competitiveness.
Most modern gas power stations use combined-cycle turbines, achieving high efficiencies with emissions typically below 400 grams CO2 per kilowatt-hour (kWh), compared to the best coal power stations at 700 g CO2 per kWh.
“Replacing more carbon-heavy fossil fuels with natural gas can reduce carbon emissions. In electricity generation, natural gas performs substantially better than coal. Improved leak monitoring will help producers reduce emissions at upstream and midstream stages,” says Patrick King.
Value-chain emissions:
The natural gas value chain includes upstream production, processing, liquefaction, transportation, regasification, and distribution. Coal’s value chain involves production, washing, and transportation to end-use destinations by rail, ship, or truck.
For more information, visit Rystad Energy’s Emissions Solution.
