The European Union is one of the biggest importers of fossil fuels in the world and the second largest importer of natural gas. Norway and Russia are currently the most important exporters of natural gas to the EU. Beyond the political and economic pitfalls of such dependence, climate science is clear that we must keep the vast majority of fossil fuels in the ground. The European Commission, however, is holding up liquefied natural gas (LNG) as the answer to the question of how Europe will meet its energy needs. This is short-sighted and wrong.
LNG is super-cooled natural gas, condensed to 1/600th of its volume so that larger amounts can be transported and stored. The “EU strategy for liquefied natural gas and gas storage” was presented by the European Parliament’s Committee on Industry, Research and Energy, and it is quite disturbing.
I decided to examine more closely their mantra of “security of supply”, “flexibility”, “diversification of supply”, “competition” and “sustainability”, and sure enough, if you look at the truth behind the much-praised LNG imports, the strategy unravels. Unfortunately, the majority of Members of the EU Parliament seem to have a largely uncritical stance towards LNG, happily repeating the Commission’s claims.
So, what are the facts behind LNG? Let’s first unmask how wrong it is to call LNG “sustainable”.
The activities of the global oil and gas industry, and in particular the shale boom in the United States, have led to serious health issues in affected communities. Fracking is disrupting communities, contaminating drinking water resources, and causing local air pollution problems. Disposal of the resulting wastes is even causing earthquakes. Food & Water Watch synthesized a lot of the new science on these impacts last year in a comprehensive report.
We seriously need to ask the EU Commission: Is there such a thing as “sustainable” water pollution? Or “sustainable” disposal of radioactive substances in landfills? Using the word “sustainable” is pure mockery, and that’s before considering climate change.
Burning natural gas is indeed less harmful for our climate than burning coal, in terms of carbon dioxide. The problem lies deeper: Throughout the life-cycle of extracting, processing, transporting, liquefying, further transporting, and regasifying, and ultimately burning gas from LNG imports, way too much of the gas leaks into the atmosphere.
Natural gas is primarily methane, which, on a 20-year basis, has a global warming potential over 86 times that of CO2. The amount leaking offsets the reduction in CO2 emissions from burning gas instead of coal or oil. But even assuming that industry can get the leaks of methane (and other hydrocarbons) under control — something that’s not yet happened in the United States, and would require a fleet of drones to even detect all leaks— there’s still no room in the CO2 budget for drilling and fracking to produce the LNG the EU would aim to consume.
“Security of supply” and “creating competition”
The Commission’s continuously repeated claim that LNG ensures “security of supply” is another myth that needs a closer look. Already today, the EU’s LNG terminals could cope with 43% of the Union’s total gas demand. Europe’s LNG terminals are heavily underused, running only at around 25-30% of their capacities, with some of them never even having started operating. Gas demand in the EU has been falling steadily in the last years, a fact that the Commission has repeatedly ignored, until finally, the European Court of Auditors openly criticised this behaviour in 2015.
This all suggests that a reason for a push of LNG infrastructure, despite an outcry of facts against it, is the plan to build strategic infrastructure — euphemistically called “creating competition”. By showing off an ability to import LNG through a new fleet of LNG terminals, the EU would aim to make clear to Russia, for example, that it isn’t reliant on Russian gas.
Flexing our muscles to try to make a show of who is stronger — that’s pure masculine folly. Building the infrastructure just to show it off would be irresponsible. It would cost a fortune, last for more than 40 years, and run counter to climate science.
Building out dependence on LNG is especially short-sighted since the truly green alternatives of wind, solar, efficiency and storage are here today, with more battery technology around the corner. Compared to growing our dependence on LNG, these are the solutions that would make the EU energy systems secure and reliable, as far as meeting energy needs. These are the solutions on which Europe must lead.
If the EU is on track with its emission targets and enhances integrated infrastructure planning, there is very little need for LNG imports — even in extreme weather/supply shortage scenarios. For back-up reasons, the ballooned LNG capacities in Europe suffice for current demand. Regardless, we can’t afford to have demand grow.
In practice, the benefits of LNG for consumers are far from clear. Given the overcapacity and relatively low natural gas prices currently, many LNG cargos arriving in Europe today are probably being bought for purely speculative reasons, purchasing at historically low prices for storage, expecting consumer prices to rise as new demand for gas is also being built out. Building infrastructure for such speculation is not something EU taxpayers should pay for!
At the same time, many import terminals in Europe signed take-or-pay contracts forcing them to accept LNG deliveries, even when demand is not there. “Flexible” reactions to actual energy needs will even be fined. Moreover, exporters can easily redirect LNG cargos to more profitable markets as they wish.
“Diversification of supply”
Moving on in the EU LNG strategy report, “diversification of supply” is a euphemism for decreasing the continent’s dependence on Russian gas. Aggressively cutting demand is a far more powerful and sustainable approach than growing our dependence on LNG. Even so, it’s worth questioning what the advantages are of diversifying supply, when it just shifts our dependence on LNG to other exporting countries such as Nigeria, Saudi Arabia, Kazakhstan, Iraq, Azerbaijan, Australia and the United States.
Look at the rise of Donald Trump, and his nationalist tendencies, and perhaps the viability of importing US LNG in the future leaves some questions. More broadly, issues such as human rights violations, instable political situations and poor environmental standards are a sad truth in many of these countries. At the same time, Europe is simply exporting its dirty energy footprint, with the problems arising from drilling and fracking. To know more about the nonsense of importing (mainly fracked) LNG from the United States, where we expect human rights standards and political stability to be high, read part II of this blog.
Lastly, there is the EU Commission’s “flexibility” argument. LNG can be bought when needed and easily stored, and it has long been touted as a reliable and flexible means of backing up renewables. But smart interconnections of geographically dispersed renewable energy production, integrated with more local electricity demand response programmes on smart grids, will avoid the need for fossil energy at all, very soon.
Energy efficiency measures are at the heart of remaking our energy system so it is reliable and resilient, while not dependent on LNG or other fossil fuels. Since 2010 both coal and gas generation reduced by 20%, and still gas demand continues to fall thanks to energy efficiency, consumption patterns and renewables.
Instead of being flexible, the EU is wasting an opportunity, determined to spend billions creating an LNG infrastructure that locks in unacceptable climate damage. Building facilities that last 40 years or longer is incompatible with Europe’s commitment to reduce its greenhouse gas emissions by 80-95% by 2050. It is clearly irresponsible to push such investments.
If policy were to reflect climate science and the Intergovernmental Panel on Climate Change’s carbon budgeting, then LNG infrastructure would soon become nothing but a big heap of stranded assets.
We’re calling on the EU to align its policies with scientific reality and the Paris Agreement on Climate Change. We demand the EU institutions to have a serious look at what the Energy Union really needs to reach true security of supply, flexibility and sustainability. We say NO to their head-in-the-sand approach funding a dirty fossil fuel system that is bound to fail in a few years time.