Opposition to the Energy Permitting Reform Act has largely (though not entirely) centered around its provisions to make it somewhat easier to permit liquified natural gas (LNG) export terminals. I've argued that those provisions don't make it much more likely that more such terminals will actually be built as I discussed in this part of the CCU on the topic:
But it's nevertheless a possibility. There's an interesting and relevant new paper out from an Economics PhD candidate at Harvard named Constanza Abuin on the Climate Effect of U.S. LNG Exports. She considered two scenarios: one in which only currently active and under-construction US LNG export terminals ever get built, and a second in which all proposed terminals are built.
One of Abuin's key findings it that by exporting more of our gas, US domestic natural gas prices increase by an average of 5.4% over the next 50 years, while international LNG prices decrease by 2.5%. As a result, there's a 3.5% decrease in US gas power generation, which is almost entirely replaced by renewables. And so US power sector emissions decrease by a total of 2.2 billion tons of CO2 over the next 50 years, or a decrease of 6% in power sector emissions (and something like a 1–2% decrease in overall US emissions).
In the rest of the world, results are mixed. In the short-term, climate pollution decreases “because gas mostly substitutes for coal in power generation.” But in the long-term, gas infrastructure investments dampen renewable energy investments, and the two effects basically offset eachother: “the cumulative effect on rest of the world emissions is an increase of 391.1 million metric tonnes of CO2, or 0.1% relative to the baseline.”
So combining the two numbers, there's an overall decrease of about 1.85 billion tons of CO2 over the 50-year period (see the bottom-left frame in the above chart from the paper), which is about a 0.5% reduction in overall global power sector climate pollution. That's toward the lower (more beneficial) end of the range of outcomes of the Energy Permitting Reform Act's LNG provisions as modeled by Jesse Jenkins, so these two analyses are consistent.
This is consistent with part of Jenkins' best case scenario. If Kamala Harris wins the presidential election next week so that EPA methane regulations and the IRA methane price remain in place, the rest of the best case scenario I discussed here also seems quite likely:
To sum up the paper's relevance to the Energy Permitting Reform Act:
- Passage of the bill might not result in the construction of any more US LNG export terminals than if the bill doesn't pass, but if it does:
- The increase in US LNG exports would somewhat increase domestic gas prices, thus reducing gas in the power sector.
- The bill's passage will also make it easier to build transmission lines and clean energy to replace that reduced power sector gas consumption, thus reducing US climate pollution.
- The climate impact on the rest of the world is basically a wash, with LNG exports replacing coal in the near-term but slowing renewable deployment in the long-term
- The paper notes that if LNG importing countries pass carbon pricing or other carbon policy caps, that can mitigate the latter problem.
- Overall the paper is consistent with Jesse Jenkins' analysis that the Energy Permitting Reform Act's LNG provisions will have a small impact on overall climate pollution, while analyses of the other provisions found that the bill could dramatically reduce US climate pollution.
- And so passing the Energy Permitting Reform Act would be a big win for the climate! 🤓
@Dana Nuccitelli
years ago I used to hear about proposals to build terminals to export coal, (on the west coast) but nothing late years. Do we export coal ?
Yes, @Rob Johnson, we export about 14% of our coal production, about a quarter of which goes to India. While we haven't built many new coal export terminals, almost all of those exports have left from five existing terminals in Norfolk, New Orleans, Baltimore, Mobile, and Seattle.
@Dana Nuccitelli In that graph of U.S. generation by type, it appears that renewables peak and then decline slightly after 2055, with a corresponding increase in natural gas. Any ideas why that might be happening?
I'm not sure @Paul Kane, I wouldn't read too much into projected energy systems changes 30 years out in any case.
@Dana Nuccitelli Understood and agreed. I'm used to En-ROADS discussions, where we can often infer what parts of the model are driving the predictions over time. Maybe it's not as straightforward to do that here.
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