The United States is central to the natural gas industry worldwide. The country has been the world’s largest producer of natural gas since taking over the title from Russia about a decade ago. In 2020, the U.S. produced roughly 33.5 trillion cubic feet of natural gas, averaging out to 91.5 billion cub feet produced per day. The United States is also a central exporter of natural gas, and its importance to global natural gas trade is projected only to increase given the recent turn away from Russian gas.
In late 2021, the United States surpassed Qatar to become the world’s largest exporter of liquefied natural gas (LNG): just under half of these exports go to Asia (namely South Korea and China). The United States also exports natural gas via pipeline, predominantly to Mexico, but these pipeline exports are anticipated to comprise a smaller portion of the country’s overall exports in coming years, particularly as it ramps up its LNG export capacity. While the United States has been a net exporter of natural gas since 2017, it does import small amounts of the fuel, particularly in winter to meet demand for heating in certain parts of the country. Nearly all imports come from Canada.
Domestic production of natural gas has ballooned in the United States in recent years, largely attributable to the horizontal drilling and fracking “revolutions” that began in 2005. Since then, natural gas production has grown by more than 8%. This boom in natural gas production initially had a positive effect on the United States’ greenhouse gas emissions. In the early days, natural gas use displaced coal, bringing with it clear emissions reductions since natural gas releases roughly half the carbon dioxide of coal per unit of energy when burned. The International Energy Agency reports that coal-to-gas switching in the United States was responsible for 255 million tonnes of carbon dioxide emissions reductions between 2010 and 2018, equivalent to taking nearly 55 million gas-powered cars off the road for one year.
But continued natural gas use remains controversial from a climate perspective. Natural gas production and transport are large sources of methane, which is up to 86 times more potent than carbon dioxide over a 20-year period in the atmosphere. Ample strategies exist to minimize these methane emissions, but even with fewer emissions, natural gas’s future is uncertain. Originally effective at displacing dirtier fossil fuels, natural gas may now be standing in the way of the United States’ clean energy transition. Despite the International Energy Agency warning that all fossil fuel buildout must stop to reach net-zero by 2050, new gas infrastructure continues to be constructed in the United States, likely locking in emissions for years to come. And if new gas projects are built without directly displacing dirtier fossil fuels, these facilities could ultimately stifle the growth of renewables.
Part of the challenge of reducing natural gas use in the United States is that it is widely used in many sectors of the economy. In 2020, the last full year for which data is available, 38% of total U.S. natural gas consumption was for electric power; 33% was for industrial uses (such as process heating or use as a raw material); 15% for residential uses (such as home heating or cooking); 10% for commercial uses; and 3% for transportation. Minimizing the use of natural gas across these sectors will require large shifts, but it is possible, particularly in easy-to-electrify applications. Natural gas use in residential buildings, for instance, can be virtually eliminated by replacing gas heaters with heat pumps that can heat and cool water and air, or by switching gas stoves to induction or electric stoves. And in the electric sector itself, ramping down natural gas use requires significantly ramping up solar and wind generation, complemented by energy storage technologies to compensate for their intermittent power.
Natural gas is governed under multiple policies and falls under various agencies’ jurisdictions. The Federal Energy Regulatory Commission (FERC) oversees construction and operations of interstate natural gas pipelines, and it recently released new policy statements outlining how the agency will consider greenhouse gas emissions and environmental justice impacts in approving new pipelines. These policy statements are non-binding and modestly ambitious, and their impact remains to be seen. In addition, the Environmental Protection Agency sets rules to manage methane emissions from oil and gas production under the Clean Air Act. These rules are currently being updated and are expected to put in place more stringent monitoring requirements for gas sites that will result in fewer leaks and less methane emitted. The EPA closed the comment period on its draft in January 2022, and the final rules are expected before the end of the year. These rules could be a key catalyst to achieve one of President Biden’s central climate pledges made at COP26 – to reduce methane emissions 30 percent by 2030 – although significantly more efforts will be needed to meet this goal.
Rating: The United States’ natural gas use and policy currently gets a thumb down 👎 While natural gas has played an important role in reducing emissions in the United States to present, continued dependence on natural gas has become, in some cases, a deterrent to more ambitious climate action. Especially given the Russian war in Ukraine, some U.S. politicians seem poised to double down on natural gas production and exports, which would negatively impact the United States’ ability to reduce emissions over the long term. To keep a 1.5-degree world in view, the United States will need to completely phase out the production of fossil fuels as soon as possible, including natural gas.
This Post was submitted by Climate Scorecard US Country Manager Christina Cilento