Free trade lowering emissions

Perspectives blog
Ken Cohen - Oct. 07, 2015

Exports of liquefied natural gas to U.S. trading partners could help reduce greenhouse gas emissions, according to a study released this week by Pace Global, a division of Siemens Business.

The report was commissioned by the Center for Liquefied Natural Gas, a trade association of LNG producers, including ExxonMobil. It offers a life-cycle analysis of the greenhouse gas emissions expected from the production, shipment, and use of natural gas exported from the United States to different markets around the world.

Free_Trade_Feature_10-2015What the study finds is that greenhouse gas emissions from coal range from 92 percent to 194 percent higher than U.S.-produced LNG.

As a story by the Houston Chronicle about the study notes, “Even a newly built coal-fired power plant emits about 92 percent to 106 percent more greenhouse gases than a facility generating electricity from U.S. LNG.”

Given the environmental benefits of using natural gas – which produces up to 60 percent fewer greenhouse gas emissions than coal for power generation – it’s hardly a surprise there might be environmental benefits from LNG exports as well.

But this new information is especially important because opponents of freer trade for energy usually try to discount this natural gas advantage.

They charge that the greenhouse gas-emissions benefits of natural-gas get washed away when you consider the additional emissions produced from liquefying gas and transporting it via tanker.

Not so, as the life-cycle analysis provided by Pace Global demonstrates. Even after accounting for those extra emissions, LNG still makes sense.

Add this study on the environmental advantages of LNG exports to the lengthy list of those demonstrating LNG’s economic benefits (IHS Consulting, ICF International, the U.S. Energy Information Administration, NERA Economic Consulting, Rice University’s Baker Institute, the Manhattan Institute, the Brookings Institution, etc.) The rationale for exports gets stronger each day.

There’s no small irony that this report was released the same day the Trans-Pacific Partnership pact was announced.

This agreement among the United States and other Pacific Rim countries is an enormous achievement in terms of promoting freer trade and increasing the global flow of commerce.

Even though it is an historic feat, we’re not across the finish line just yet. The next challenge for the Obama administration is to get the pact through a congress that has shown itself increasingly skeptical on trade issues.

To that end, before asking members of both parties to give their support to free trade, the administration may want to demonstrate a deeper commitment of its own.

The best way to do this would be to affirm the importance of free trade for all products, including energy, and to remove government barriers limiting or prohibiting the export of crude oil and natural gas.



Tags:   climate changeemissionsenergy economy
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