LNG imports: Is coal’s emissions ‘twice as high’ as ​​LNG?

Spending hundreds of millions of dollars to build a liquefied natural gas import terminal will not reduce New Zealand’s emissions compared to burning coal, an energy expert says.

Falling offshore gas production, and lower water levels in hydro lakes, have led to more coal being burned at the Huntly Power Station, increasing New Zealand’s emissions.

But Ralph Sims, professor of sustainable energy at Massey University, said any climate benefits compared to burning coal would disappear by the time the gas was extracted, cooled, stored and transported in the form of liquefied natural gas (LNG).

Government Monday Announcement of measures to address energy crisis Gas and electricity prices soared for many large commercial users, and some companies suspended production.

One of the announcements was a plan to pass a law allowing the construction of liquefied natural gas import terminals without going through the usual consent — or even fast-track consent — process.

The government also announced a date for the repeal of the ban on offshore oil and gas exploration previously announced by the Labor Party, and said it would allow power companies to own their own power generation facilities. Sims said this was the most promising move on the list because power companies could build power generation facilities close to where people use electricity, saving transmission costs.

Prime Minister Christopher Luxon Tell Morning Report The oil and gas ban has led to the current situation as this is a drought year.

“Importing coal is not good because it is twice as harmful as natural gas,” Luxon said on the show.

Sims said the “twice as bad” statistic was an exaggeration and that while offshore gas was cleaner than coal, discovering more of it would exacerbate emissions.

“If we find more gas and burn it, emissions will go up, and that may take a few years, but it will cause emissions to continue to rise for a decade or more after the gas is discovered,” he said.

“But what’s even more interesting is that if we import liquefied natural gas … including the entire process of extracting, cleaning, cooling, transporting, storing and utilizing the gas, the emissions per kilowatt-hour will exceed those of coal.”

International Studies Comparing the two fossil fuels Over the years, results have varied, with some U.S. studies finding LNG to be much cleaner than coal and others finding it to be slightly worse, depending on a variety of factors.

A large part of the difference between coal and natural gas (whether LNG or otherwise) comes down to how much methane leaks out during drilling and transportation, and recent findings suggest that previous studies may have underestimated methane emissions from natural gas production.

Last year, aerial readings conducted by the U.S. Methane Air Project found that methane from gas fields Four times higher than officially reported.

Earlier this year, U.S. President Joe Biden temporarily US halts approval of LNG terminals Countries are calling for a review of the impact of LNG on the climate after 170 climate scientists signed a letter saying it was worse than coal.

Offshore gas exploration

David Dempsey, associate professor of civil and natural resources engineering at the University of Canterbury, said there appeared to be more undiscovered gas off the coast of New Zealand. The question was how much demand would be left when that gas was discovered, developed and made available for use.

“It’s one thing if you allow people to come in and develop it, but are they going to have the motivation to do it? Even if they are confident, can we get gas buyers to stick around for 10 to 20 years to continue buying this gas?” Dempsey said.

“If offshore exploration starts next year and significant oil resources are discovered immediately, then overseas companies will need to come in to invest and provide supply, and past experience tells us that this takes five to 10 years,” he said.

“In the meantime, you have the existing oil fields… and the LNG option, but that’s still pretty expensive… still a lot lower than the peak prices we’ve been having… (but) for all the historical, long-term users whose businesses are built on $6-8 per gigajoule and LNG is 3-4 times more expensive, it’s hard to see how they’re going to stay in business.”

Dempsey said solar power could be a cost-effective option and more in line with New Zealand’s climate goals, but it would also take time.

“It has an intermittent nature, which means we need to manage it carefully, either by managing our hydro lakes or by managing grid-scale batteries.”

A report released on Tuesday by Rewiring Aotearoa, co-authored by Reserve Bank of New Zealand chief economist Paul Conway, found New Zealand households and businesses spend about $55 million a day on fossil fuels, most of which are imported, once transport fuels are included.

The report said $9 million could be saved if households switched to electricity overall, as solar was now the cheapest form of energy in New Zealand.

The report said grid electricity and fossil fuel prices were rising at a faster rate than inflation, but prices for rooftop solar and batteries were moving in the opposite direction, potentially easing pressure on the grid.

Renewable energy projects approved but not yet built

Ministers also pledged to pave the way for renewable electricity projects.

But Waikato University environmental law professor Barry Barton said lowering legal barriers to renewable energy would not solve much of the problem, as operators chose not to build renewable energy plants for which they had consent.

“There is always room for improvement in environmental regulation, but our current approval time for wind projects is 20 years, while solar projects take less time to approve.

“Some projects are rejected, but the vast majority are approved. We often see projects that are fully approved but not actually started. Companies are making commercial decisions on when to proceed with projects.”

He said a recent high-profile rejection of a wind farm permit did not necessarily mean there was a problem.

“Not all projects make sense.”

Barton said being more flexible in meeting demand for gas and electricity could help.

“One question is how can we make better use of the natural gas we have. Currently, about 40% of our natural gas is used to produce chemicals, methanol and urea.”

“If other users value this gas more, the market will prevail.”

The Tiwai Point smelter has just signed an agreement with Meridian Energy to stop producing aluminium when power supply is tight.

“That may be something that other companies can do — but on the other hand, our ability to solve energy problems by shutting down commercial operations is limited,” Barton said.

Power line companies and others are also promoting smart chargers for electric vehicles and other demand-side measures, such as remotely turning hot water cylinders on and off for short periods of time, to shift demand, using more electricity with less line and generation expansion.

Professor Sims of Massey University said despite the huge potential for demand, the government had made no mention of it in its action list.

“Most people like to talk about supply — solar panels or natural gas or whatever — and energy efficiency isn’t very sexy.”