Written by Michael Thervil
Today during the “STRATEGIES FOR GAS IN A FAST-CHANGING MARKET” at the CERAWeek some of the biggest conversational pieces was the price of fuel, the need to create more energy around the world, and the role LNG is going to play in that. It was reported by the panel which consisted of Eric Eyberg (Head of Global Gas & Power Consulting – S&P Global), Toby Z. Rice (President & Chief Executive Officer – EQT Corporation), Michael Smith (Chairman, CEO & Founder – Freeport LNG), & Moderator Daniel Yergin (Vice Chairman – S&P Global); that LNG exports have been set to double within the 5 years and will soon employ more than 500,000 people annually.
It was also stated that LNG will contribute $1.3 trillion to the GDP of the United States by 2040. When it comes to LNG (Liquified Natural Gas) and the environment there's a lot that can be said. On the one hand, in the international community's quest to achieve what is known as “NetZero”; meaning zero carbon emissions, there seems to be a race to see who the king of the hill will be when it comes to this endeavor. But the irony is that if things go the way these panelists are forecasting, then there will be no winners.
Currently, America (88.3 million tons est.) is in first place when it comes to LNG exports, with Australia (82.0 million tons est.) and Qatar (79 million metric tons est.) are trailing not too far behind. But with the race between developed nations to reach NetZero by 2050, it seems that they have forgotten that countries that would be considered to be “less developed” by default; will not only still have to utilize “conventional” forms of fossil fuels for energy (coal, natural gas, oil, and crude oil) to satisfy their energy consumption needs, there is also a less talked about issue that LNG suppliers seem to be failing to address; and that’s the by-product of LNG extraction, production, and utilization – methane.
Methane comprises 85%-95% of LNG whether it’s refined or not and constitutes as a Greenhouse Gas that is considerably worse than Carbon Dioxide (CO2). With superpowers racing to places such as the Artic and Antarctic Circles in the name of “exploration”, the reality is, superpowers such as Russia and the United States are rushing to these remote places on the earth to exploit the natural resources and in this case LNG that is contained beneath the ice.
But with the large amounts of LNG currently being produced in conjunction with what’s to be discovered in the Arctic Circle (2-13 million tons/year est.); no longer does it look like rising CO2, nitrogen oxides, and sulfur levels within the environment are things to really be worried about when compared to the exponential amount of issues methane will present to all of mankind.
Some people are pointing to corporate greed as the number one cause as to why many countries are seeking to capitalize on LNG and its production. However, there is another culprit at the helm that needs to be brought into the limelight. That culprit is higher energy consumption across the world – and even more specifically the worldwide use of Artificial Intelligence. Believe it or not AI uses an exponential amount of energy in order to operate. In fact, the rule of thumb is the larger and more complex the processes executed by AI systems, the more energy these AI systems will need to consume to stay functional and most of all competitive.
According to recent reports, the mining and extraction of LNG emits significant amounts of methane at all levels of production from the start of its extraction to its total expenditure. In understanding this, it should be considered that in the name of developing countries seeking to reach NetZero carbon emissions by 2050, it appears that they are cutting their own throats at the same time by increasing the utilization of LNG. Put in other words, it seems like the developed nations that are on the NetZero bandwagon are doing nothing more than literally trading one poison for another.
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