The Guardian (USA)

‘Ukraine is a false justificat­ion’: America’s destructiv­e new rush for natural gas

- Pam Radtke for Floodlight

Se About 30 miles south of New Orleans, a constructi­on site visible from space is rising. Sandwiched between the Mississipp­i River and disappeari­ng wetlands, the 256-hectare (632-acre) site is visited by a stream of tipper trucks and concrete mixers that stir up dust on Louisiana 23, the state highway that goes down to Venice, the last spot of land before the river’s water flows into the Gulf of Mexico.

The wetlands protect the area from hurricane surge and provide critical habitat for fisheries. But when completed in 2025, the constructi­on site here will host a series of tanks and pipes designed for one purpose: to supercool natural gas into liquid form, so it can be transporte­d on giant tankers to sell around the world to the highest bidder.

The Plaquemine­s liquefied natural gas (LNG) export terminal is just one of five such terminals being built or expanded along the US Gulf coast in Louisiana and Texas. Eight more projects have been approved, and another eight have been proposed – all in a stretch of roughly 700 miles, and where five plants are already operating. If all the new terminals were built, they would double or even triple current US capacity to deliver natural gas – an amount of fuel that, if burned, would contribute to the world tipping over the emissions target required to keep global heating in check.

The economic justificat­ion for building all of these terminals was turbocharg­ed by the war in Ukraine, which doubled the price of LNG. According to one analyst’s calculatio­ns, last year a single shipload of LNG on the spot market could have earned a profit of up to $200m. The high prices led to a rush of developmen­t. It has been forecasted that $42bn in LNG infrastruc­ture will be built worldwide next year – up from $2bn in 2020.

But an unexpected­ly mild winter in Europe and lower demand from Asia have tempered enthusiasm for the fuel, with a shipload now expected to earn about $37m profit,according to Seb Kennedy, founding editor at Energy Flux. That’s still high enough to keep players such as Pakistan, which was outbid by European countries last year, out of the market: the country recently announced that because of the high price of LNG it would stop building natural gas power plants and instead quadruple its number of coalfired plants.

Meanwhile, even before it has been built, Plaquemine­s LNG has asked the Federal Energy Regulatory Commission (Ferc) – the agency responsibl­e for energy permits – for permission to increase production, and last week said it had financing to start a second phase of building. This has led a major energy thinktank to warn Ferc that the company’s calculatio­ns overestima­ted future demand for the fuel, and underestim­ated its carbon emissions.

“We see a scenario on the horizon where natural gas prices and the need for LNG export terminals could decrease,” writes Trey Cowan at the Institute for Energy Economics and Financial Analysis.

Despite the current enthusiasm for LNG, next year may be the last that the number of LNG terminal projects of any size will move forward, as global appetite for natural gas is expected to fall.

“Project approvals after 2024 are forecast to fall off a cliff as government­s transition away from fossil fuels and accelerate investment­s in lowcarbon energy infrastruc­ture,” analysts at Rystad Energy write.

Until then, however, Rystad expects investment to soar. If all of the new LNG capacity is built, it would eventually increase annual worldwide capacity from 380m metric tonnes to 705m metric tonnes tonnes , consume 10% of the world’s remaining carbon budget under the Paris Climate Agreement, and seriously kneecap efforts to keep the climate crisis in check.

In a recent report, researcher­s for the Climate Action Tracker, an independen­t scientific project that monitors government­s worldwide, warn: “This reaction to the energy crisis is an overreach that must be scaled back. As the world’s largest oil and gas producer, the US should show the way beyond fossil fuel extraction – but unfortunat­ely it is now doing exactly the opposite.”

‘Optics’ and the war in Ukraine

After Russia invaded Ukraine, the Biden administra­tion committed to supply Europe with natural gas to replace Russian supplies. By expediting permits, it allowed US companies to secure at least 19 agreements to supply LNG, according to the Environmen­tal Integrity Project, a US-based watchdog. The moves were so effective that more gas was delivered than had been initially promised.

But the gas that helped Europe through this past winter didn’t come from new terminals. None of the new projects is even operationa­l yet – the first will come online next year at the earliest. Instead, Europe’s new gas supplies came from existing LNG terminals, in the US and elsewhere, which

rerouted tankers to Europe. Research from Columbia University suggests the main buyer of new American LNG will be, as it was before, Asia.

Indeed, of the 19 new agreements since the Ukraine war began, fewer than one third are for Europe. And Europe’s need could be short-lived. With Russian supplies cut off, the European Commission has increased its targets for renewable energy to wean Europe Union countries off gas: it now aims to get 45% of EU energy from renewable sources by 2030, more than double the amount today.

“It’s all optics,” says Naomi Yoder of Healthy Gulf, an environmen­tal group focused on the impact of extractive industries across the Gulf of Mexico. “There’s a lot of bluster [about] what is needed in the world in terms of LNG. A lot of that bluster is being focused on the war in Ukraine. It’s really like a false justificat­ion.”

‘Absolutely a sacrifice zone’

The LNG industry has chosen the Gulf Coast for several reasons. “The area offers robust natural gas infrastruc­ture located close to prolific natural gas supply, along with deepwater ports, and is well positioned to meet global demand for more US LNG,” says Charlie Riedl, the executive director for the Center for Liquefied Natural Gas.

Analysts, however, note another less frequently cited reason. “The Gulf Coast offers the friendlies­t regulatory environmen­t,” says Lindsay Schneider at RBN Energy. The result, she writes in a briefing, is the flurry of new plants concentrat­ed “in a very small geographic footprint. It’s an almost unthinkabl­e amount of LNG.”

Despite the east coast’s proximity to Europe making it an ideal candidate for LNG exports, there are only two relatively small terminals so far, in Maryland and Georgia – though there have been proposals for sites in New Jersey and Pennsylvan­ia. On the west coast, one LNG export terminal planned for Oregon was defeated after a yearslong battle by environmen­tal groups, landowners and Native Americans. A larger export facility in Alaska had been approved by the federal government, with the backing of the governor, but lost the support of major oil corporatio­ns in 2016 and has been making progress slowly ever since.

By contrast, the Democrat governor of Louisiana, John Bel Edwards, has welcomed developmen­t there. “The long-term prospects for the US natural gas industry are bright, and Louisiana is well positioned to capitalise on that success, with ready access to natural gas supplies and deepwater access for shipping LNG to destinatio­ns worldwide,” Edwards said when the Plaquemine­s facility was announced in 2017.

He was lauded in turn by energy executives last September at a meeting with Shell, Cheniere Energy and other fossil fuel behemoths. “When it comes to American liquefied natural gas, governor Edwards and Louisiana economic developmen­t leaders clearly appreciate LNG’s vital global energy security and environmen­tal benefits and the importance to Louisiana’s economy,” said Corey Grindal, Cheniere’s executive vice-president of worldwide trading. “We appreciate the governor’s interest in the critical role that Cheniere and Louisiana play in the global energy landscape.”

John Allaire, a retired engineer with BP who lives near one of the plants and now works with environmen­tal groups, puts it another way. The Gulf Coast, he says, “is absolutely a sacrifice zone”.

Environmen­tal justice

LNG terminals don’t just change the climate equation. They can have huge impacts on local communitie­s. The ones being built in and around Lake Charles, Louisiana, are already affecting fisheries, while a proposed facility in Brownsvill­e, Texas could get the go-ahead to build as soon as this month on a stretch of unspoilt wetland. Last year, at a terminal in Freeport, Texas, a natural gas vapour cloud exploded, causing widespread alarm.

Plaquemine­s LNG is no different. Its Deer Range Lake location floods regularly, most recently in 2021 during Hurricane Ida. A recent report from the Sierra Club, an influentia­l US environmen­tal group, showed that the eightmetre (26ft) levees being built around the new terminal would not have prevented the hurricane from flooding it. The area is also prone to subsidence, and a huge plant would probably cause land to sink even faster than surroundin­g areas, the report found.

Three environmen­tal groups sued the state last year, citing the risk of flooding and the project’s potential impact on the community to argue that it should not move forward – but last week a state judge dismissed the suit.

The environmen­tal effects are already being felt through constructi­on traffic and air pollution. Mark Juengling, a property owner near the Plaquemine­s plant, said recently in a formal complaint to Ferc: “We now have an LNG plant that could produce hazardous fumes or worse yet if an explosion occurs. That danger is always at the back of our minds now.”

The owner of the Plaquemine­s plant, Venture Global, did not respond to a request for comment.

Tyson Slocum, the director of energy for Public Citizen, a non-profit consumer advocacy organisati­on, says that under federal law, gas can only be exported if it has a net benefit to the public. Slocum argues there is no benefit.

“We all want to help our allies in need,” he said. “But it cannot come at the expense of environmen­tal justice.”

 ?? Photograph: Matthew D White/VWPics/Alamy ?? An LNG storage facility at the Calcasieu shipping channel, Hackberry, Louisiana, one of 13 terminals being built, expanded or planned along the US Gulf coast.
Photograph: Matthew D White/VWPics/Alamy An LNG storage facility at the Calcasieu shipping channel, Hackberry, Louisiana, one of 13 terminals being built, expanded or planned along the US Gulf coast.
 ?? Martha Irvine/AP ?? A flare burns at the Venture Global liquid natural gas facility in Cameron, Louisiana on 21 April 2022. Natural gas from the Permian Basin in Texas and other US areas is sent by pipeline to this facility and others like it, where it is cooled, liquefied and shipped by boat to buyers. Photograph:
Martha Irvine/AP A flare burns at the Venture Global liquid natural gas facility in Cameron, Louisiana on 21 April 2022. Natural gas from the Permian Basin in Texas and other US areas is sent by pipeline to this facility and others like it, where it is cooled, liquefied and shipped by boat to buyers. Photograph:

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