NGL, LNG is complicated

Hi there,

Today’s newsletter is about 1,800 words on Biden’s recent decision to halt approvals for new liquefied natural gas infrastructure. Could have probably gone for 18,000 words, but I often remind myself that not every Thursday newsletter here has to contain the whole world. My intent with this one was to help us all ‘Keep Cool,’ i.e., keep our heads, as we navigate complex issues.

LMK what you think – I always enjoy your responses <3

Ranting about a perilous media playbook

I am a student of many things. One of them is how ‘stories’ metastasize across the web. 

Here’s an example. Let’s say a study gets published. It has not been peer-reviewed, let alone published in a peer-reviewed journal. Its findings contrast considerably with vast amounts of existing research. It may be ‘right.’ It may not be. How much stock should we put in the study?

Your answer may well be, “Not that much.” The thing is, often, it doesn’t matter.

Take, for instance, what can happen next. Sometimes, an outlet, say, the New York Times, picks up the study! It runs an article about it! Suddenly, the study – whose findings, mind you, are at the bare minimum, not definitive – has entered the mainstream. The zeitgeist. The ‘common knowledge,’ as it were. Many people, perhaps myself and yourself included, start to feel as if the study must be credible. Because, well, it’s in the New York Times! Even if the NYT article hedges with respect to the study’s veracity, that part often gets lost as the story spreads.

What comes next? Well, in the case of the very real example we’re talking about, the study’s conclusions become a talking point for many, many people. Perhaps it even informs national policy. Here’s the intro of an email from a climate activism group I got over the weekend: 

Look at how much work the “Research suggests” is doing in that sentence. I unsubscribed from that mailing list. In the future, it would make me very happy if even a handful of you took note of this pattern, or 'playbook' if you will. It’s everywhere in media, especially on social. It’s a slippery slope, at minimum. 

Now, out of hypotheticals and into the news →

What Biden’s LNG export decision means

Here’s the deal. I am, right now, in this newsletter, not that concerned with whether and to what extent liquefied natural gas – the form in which natural gas is transported overseas – is worse for the planet than burning coal or not. Yes, we will discuss that a bit. What I’m interested in is: 

• Illuminating how complicated the LNG thing is

• Interrogating why the context here matters more than the content

• Arguing why complexity demands a greater appreciation of nuance of us

So what actually happened? What’s the news? 

Last week, the Biden Admin made a major energy and climate decision by placing a moratorium on approving new liquified natural gas export facilities. The White House and its agencies will now take time to conduct new analyses of the environmental impacts of LNG exports. New LNG facilities that already have permits aren’t impacted, and, by some estimates, there are enough such newly approved facilities to double export capacity by 2030.

Regardless of whether capacity doubles, it will grow a lot this decade. This decision is largely about 2030 and beyond (an important point to appreciate.)

In the wake of this decision, there was a lot of proverbial saber-rattling between climate activists and energy hawks. Climate activists lauded Biden’s decision, marking it as a critical win for avoiding future emissions that additional facility approvals could lock-in. The Republican-led House and energy hawks are contesting the decision. Relative climate and energy pragmatists, like myself, find themselves somewhere in the messy middle. 

Questions abound, such as “How much better for the environment is LNG versus coal?” Depends on who you ask! By some estimates, methane leaks along natural gas supply chains fully offset the reduced carbon dioxide emissions of burning gas versus coal. Other folks say that’s inaccurate or, at minimum, questionable. One note here is that Biden’s Administration and the DOE have previously conducted life cycle assessments of LNG exports to Europe and found that their greenhouse gas footprint is much lower compared to coal.

Those conclusions may be dated. But they do drastically contrast the study we opened the newsletter discussing, which, again, has not been published in a peer reviewed scientific journal.

Zooming out, the backdrop for Biden’s decision comes at a time when the U.S. has recently become the world’s leader in LNG exports. Here’s a chart of LNG exports twenty years ago – you’ll note the U.S. is nowhere on the pie chart.

The U.S. went from basically no LNG exports to the #1 global LNG exporter in two decades. Really, it happened in less than ten years. In itself, that’s an essential conclusion: Energy transitions can happen very quickly!

Why this thing is complicated

In some senses, I am a natural gas fan boy. Natural gas powers much of global energy production and helps create the fertilizer needed to feed half the world.

From a climate change vantage point, however, I’ll be the first to agitate for a complete transition off all fossil fuels. While likely better for long-term global warming mitigation than coal, nat gas combustion still produces a lot of carbon dioxide emissions, while leaks along the natural gas (read as methane) supply chain drive warming much more quickly than carbon dioxide emissions do.

Funny how I can believe both things to be true at the same time, right?

Conducting a complete lifecycle analysis comparing coal to natural gas is intensely complex. While natural gas leaks complicate the matter and might make gas as bad as coal from an aggregate warming perspective (depending on the leak rate), coal mines are also a significant source of methane emissions. Expanding or opening coal mines is a terrible outcome for a whole host of climate reasons, including and beyond global warming.

I’m a German citizen, where coal mines are expanding. Those mines may well leak methane for a long time, whether or not they’re in operation. As a German citizen, I’d personally much prefer Germany import American LNG rather than expand coal mines (or buy gas from elsewhere, like Russia or the Middle East).

That said, as I called out above, the new LNG decision will impact timeframes beyond 2030 more than this decade. It’s possible that European countries, and other major American LNG buyers, like Japan, won’t need gas to replace coal by then. But that’s far from guaranteed. Coal and energy demand in Asia are really the main leverage points when we look beyond 2030. That demand is hard to predict. Bangladesh, for instance, offers an interesting LNG import profile.

Further, if we expand our analysis beyond climate change and global warming, air pollution from burning coal is much worse than from burning gas. Air pollution kills millions of people annually. That number is (fortunately) falling, but I wouldn’t blame anyone whose prerogative is to burn less coal by importing LNG and burning it instead. To, you know, save people’s lives.

Fortunately, coal plant capacity construction ex-China is also falling globally. Ideally, we’ll see peak coal demand in the coming years. Renewable energy has helped accelerate this trend. Then again, so have America’s natural gas exports.

I could continue to introduce more complexity here. I could introduce discussion of the many negative impacts of fracking for gas, too. Or the negative community-level impacts of LNG export terminals. I trust you get the idea.

Context > Content 

Content is important. In this case, the content is Biden’s decision to halt new LNG infrastructure approvals. That, as we’ve discussed, is complicated in and of itself. 

Then there’s the context. Sometimes context surrounding content is even more important.

In this case, one component of the broader context surrounding Biden’s LNG decision is the 2024 U.S. presidential election. In case you’ve been going ostrich mode on this front (I wouldn’t blame you), polling between Trump and Biden amounts to about a coin flip right now.

To win the election, Biden will need to mobilize voters en masse. Including young voters who don’t vote as readily as older folks do. The more people who turn out to vote in November, the more likely Biden is to win.

Biden’s LNG call should play well with mobilizing energized, climate-conscious and climate-concerned young voters. Makes sense to me why that’s important to him. The challenge is there’s a lot of ‘threading the needle’ Biden also has to do if you zoom out and analyze the aggregate voter base. For the average voter, climate change is, ultimately and unfortunately, not that high on their list of concerns. The economy is. Which means energy is, too.

Biden is in an unenviable position. Many of his constituents don’t even know about things like the Inflation Reduction Act. Or other ways in which he’s been one of the more progressive presidents on climate change ever. Of course, policy is not all him. Of course, I’ve been using ‘Biden’ as a bit of a metonymy for the greater government and policy complex domestically. But whether you look at domestic manufacturing investment, incentives for low-carbon energy, trying to restart previously shuttered nuclear power plants, or the EPA’s new methane rules, progress abounds. Unfortunately, that doesn’t always play as well as reporting on (or stoking) division on most media channels.

The net-net

Folks will tell you there are right and wrong answers when it comes to things like whether the U.S. should build more LNG exports terminals. Perhaps there are clear rights and wrongs if you focus on a single issue. With respect to climate change, the less long-lived fossil fuel infrastructure that gets built, the better.

If we expand our variable set, however, even just by one to include, say, air pollution, suddenly things get a lot more complicated. I won’t end on a succinct, satisying ‘answer’ here because my whole point is there isn’t one. What I do believe (strongly) is that being good climate practitioners demands that we cultivate the ability to hold, appreciate, and press into this level of nuance.

Binaries (good vs. bad) are comfortable. Our brains are built for them. Getting comfy in the discomfort that the absence of binaries leaves many of us in isn’t easy. But it’s a practice worth cultivating. Especially if you, like me, want to do this ‘climate’ thing for the long-haul.

KEEP COOL PODCAST

At the beginning of this year, I sat down with Albert Wenger of USV to discuss the state of climate and climate tech in 2024. Albert is both a preeminent climate tech investor and an inimitable venture investor in general. Our convo spanned:

• How climate challenges are more dire than ever

• Why we’re not out of the woods yet in terms of a climate tech funding slowdown

• The need for more R&D in geoengineering

• Why writing is one of the best crafts in the world to crystallize ideas

If any or all of that sounds interesting to you, give it a listen here!

With the breath,

– Nick