The International Gas Union (IGU) expressed disapproval of the US decision to halt major LNG export projects on Tuesday, claiming that restricting gas supplies on the international market would have the reverse effect of reducing emissions.
The IGU said in a press release that the halt in the review of key US LNG export projects sends an unsettling signal to global energy markets, given the US’s position as the world’s largest LNG exporter.
LNG plays a key role in the reliability of the global energy system, keeping emissions in check and restoring the global LNG supply balance, the organization said, adding that energy security requires the current and forecasted shortfall to be addressed.
'The current dynamic we are seeing unfold is highly worrying. It is eroding these fundamental market principles and will harm global energy security and emission reduction,' said Menelaos Ydreos, secretary general of the IGU.
The decision comes at a time when global gas supply remains tight and the market is vulnerable to more volatility and price escalation, according to the IGU.
'Despite a cooling of prices in Europe and Asia, they remain nearly double the pre-crisis levels. But the world is not yet through the crisis. Until new volumes of LNG come onstream, the global market will hang on a fragile balance of demand reductions and stability in the current supply level, especially when it comes to flexible LNG, which allows bringing gas to remote markets that need it,' it said.
'Limiting the supply of gas on the global market will not reduce emissions; it will do the opposite,” it said.
The IGU explained that over the last two years, high gas prices have led to gas-to-coal switching and to all-time high emissions from coal in line with record consumption.
This is despite record additions of renewables and the resurgence of nuclear in 2023, because the decade-long trend of coal having a 40% share of global power sector emissions is continuing.
It was noted that while natural gas will continue to play a pivotal role in the energy transition, facilitating the decarbonization of the global economy, the gas sector itself will also continue to undergo a process of decarbonization.
'This is imperative, and we call on policymakers and industry to find urgent solutions for accelerating the deployment of carbon capture, low-carbon, and renewable gases. We also stress that doubling down on eliminating methane emissions is required to make this transition possible,' it added.
US President Joe Biden announced the administration’s decision on Jan. 26 to temporarily pause all pending approvals of LNG exports amid climate change concerns.
Biden said his administration would study the consequences of LNG exports on energy costs and energy security and their environmental impact during this pause.
By Murat Temizer
Anadolu Agency
energy@aa.com.tr