WE KNOW ENERGY ® By Nina Howell , Ro Lazarovitch and Adam Quigley , Bracewell

Decarbonising Natural Gas and LNG

Natural gas and liquefied natural gas (“ LNG ”) have long been hailed as one of the winners of the current energy transition when compared to other fossil fuels . Carbon dioxide (“ CO2 ”) emissions from the combustion of natural gas are approximately half that of coal and the combustion of natural gas creates far fewer other pollutants , such as particulates , compared to other hydrocarbons and coal .¹ The expectation was that gas would replace coal as part of the energy transition , while the scale and technology underpinning cleaner forms of energy production grow and develop .

However , natural gas and LNG are increasingly under the spotlight with questions raised as to both the suitability of natural gas and LNG as the “ transition fuel ” of choice , and the long-term role of gas in the global energy mix . Notwithstanding that natural gas is less harmful to the environment than the traditional alternatives , it is a fossil fuel and its continued use contributes to climate change . Therefore , some argue , that we should focus exclusively on cleaner forms of energy .²

As a response , market players in the natural gas and LNG sector are increasingly considering and implementing measures to reduce the environmental impact associated with their products . Such measures include limiting the amount of methane ( the main constituent of natural gas ) and CO2 released when extracting and liquefying natural gas , carbon capture and storage (“ CCS ”) and carbon offsetting . This article looks at those mitigation efforts .

Role of Gas and LNG and Projected Global Demand

The outlook for natural gas is much more resilient than other fossil fuels . In the short term , the International Energy Agency estimates that natural gas demand will increase by an average 1.7 % per year between 2022 and 2024 .³ In the medium term , by one estimate natural gas will be the only fossil fuel for which demand will continue to increase beyond 2030 . ⁴ From 2035 to 2050 natural gas demand is expected to remain largely stable , only decreasing by 0.4 % over the period .

LNG is expected to remain in particular demand , with much of the greatest demand coming from Asia where there are low levels of domestic natural gas production and limited gas pipeline infrastructure , meaning that imported LNG is the main source of supply . Demand for LNG is expected to increase until 2040 and beyond , with Shell estimating that a significant supply-demand gap will emerge by 2030 . ⁵ Natural gas and LNG are therefore likely to continue to have a significant role to play in the global energy mix throughout the energy transition .

Coal-to-Gas Switching

The development of a global LNG market has facilitated economies with high energy needs but without sufficient domestic natural gas production , such as China , Japan and Korea , to switch from highly polluting coal-fuelled power generation to cleaner natural gas-fuelled power generation . One of the key perceived failures of the recent COP26 Summit and the Glasgow Climate Pact was that

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