Shannon LNG Report by Pat Kelly

1. Comparison of LNG with domestic natural gas

Natural gas delivered through a pipe system is a “good” fossil fuel in terms of total emissions. It is cleaner than both oil and coal (in terms of nitrogen and sulphur compounds and heavy metals) although, since it is a fossil fuel, the carbon dioxide emissions are still high.

However when natural gas is delivered though an LNG system, it starts to look a lot worse. The process of cooling, compressing and transporting the liquefied gas adds significantly to the total greenhouse gas emissions. According to a recent paper in Environmental Science Technology (Jaramillo et al, 2007), the extra processing steps required by LNG makes LNG just as bad as coal (for electricity generation) when it comes to total life-cycle greenhouse gas emissions.

And while pollutants like sulphur and nitrogen and heavy metals are routinely removed from the flue gasses from coal-burning power plants, greenhouses gases like carbon dioxide are not. Which means that LNG used in power production can easily release as many pollutants into the atmosphere as coal, depending on how it was processed and how far it travels.

And on top of this, LNG requires a whole new infrastructure to be put into place: processing, storage, and the huge specialised tankers required to move it around. Building such an enormous infrastructure has a large cost in natural resources, pollution, energy and greenhouse gasses. Whereas coal can be transported in ships and trains that already exist, and natural gas through pipelines that are already in place, LNG requires a vast new infrastructure to be built.

Nobody would argue that coal is a “good” fuel from an environmental aspect. However LNG, when taking everything into consideration, looks like it could be even worse. It can be as least as bad as coal when considering total life-cycle greenhouse gas emissions, and might even be worse if we take into consideration the environmental cost of building up the infrastructure. All in all, LNG is not a good choice if reducing greenhouse gases is one of your concerns.

Jaramillo et al. say in their summary:

"Thus, it is important to re-evaluate whether investing billions of dollars in LNG/SNG infrastructure will lock us into an undesirable energy path future energy decisions costlier than ever expected and that could make increase the environmental burden from our energy infrastructure."

SOURCE: Comparative Life-Cycle Air Emissions of Coal, Domestic Natural Gas, LNG, and SNG for Electricity Generation. Jaramillo, P., Griffin, W.M., and Matthews, H.S.

Environ. Sci. Technol., 41, 17, 6290 - 6296, 2007

2. Price trends in natural gas

Shannon LNG quote a figure of at least 70 years for the gas supply remaining in the world, as a justification for investment in the LNG facility. In fact nobody really knows the amount of natural gas remaining, or the amount that can be profitably extracted.

What is fairly well known is that the demand for natural gas is increasing all the time. The EIA predicts an annual increase in natural gas consumption until the year 2030 as 1.9% per year.

Note that this is the amount of gas that will be required, and does not necessarily mean the amount that is available--the EIA in its predictions makes no mention of where the gas is going to come from. And if availability does not match demand, then the price will simply increase.

There are several factors that could decrease the global supply even faster than expected.

1) As petroleum becomes more scare and more expensive, more focus will turn to natural gas. This is already happening, and will press the market for natural gas.

2) Natural gas is also the main raw material in making artificial fertiliser. As world population increases, and arable land area decreases, more artificial fertiliser will be needed to feed the global population.

3) The emerging world economies such as China and India are consuming natural resources at an accelerating rate, and their demand will further increase the price and reduce the supply.

Right now fossil fuel supplies are becoming tighter, population is increasing, disruption from global warming is becoming evident, and the international pressure to cut back on fossil fuel use is increasing. This means that it is probably the worst time in history to invest in fossil fuel infrastructure.

It is expected that natural gas supplies and prices will be extremely volatile over the next half-century. And what is beyond any doubt is that one day, in the not too distant future, the natural gas will all be gone.

SOURCE: Energy Information Administration / International Energy Outlook 2007

3. Irish Energy White Paper

This extract is taken from the International Energy Agency’s 2007 Report on Ireland.

“Ireland is highly dependent on oil and increasingly dependent on natural gas. The price of these two commodities has strongly increased recently, which results in a heavy burden for the Irish economy and a risk for energy security. The main alternative in the supply side is coal and peat, which causes greenhouse gas emissions to rise much faster than expected.”

Comment: Natural gas dependence puts a “heavy burden” on the Irish economy. Is it therefore wise to increase this burden even further?

The following extracts are taken from the government white paper “Delivering a sustainable energy future for Ireland”.

1.1.6 – “Without policy change, global energy demand is projected to increase by over 50% between now and 2030.”

Comment: This implies that fossil energy prices will also increase, which makes fossil fuels les attractive.

3.1.2 – “Currently over 90% of Irish energy requirements are imported.”

Comment: Increasing this reliance is hardly a good idea.

3.3.2 – “Further expansion of LNG capacity and gas interconnection is underway in the UK and Europe which will benefit Ireland in terms of security of wholesale gas supplies within this region”.

Comment: If LNG is anyway supplying the UK and increasing our supply indirectly, then why take additional risks by investing heavily in LNG infrastructure for such a small market as Ireland?

3.3.2 – “While the prognosis for gas supplies is relatively secure as a result, it is prudent for Ireland to develop a longer term strategy to reduce over reliance on gas imports from the UK.”

Comment: Over-reliance can also be decreased by simply improving energy efficiency, insulation, solar thermal etc and expanding bio energy and renewables.

3.10.10 – “We will achieve 15% of electricity consumption on a national basis from renewable energy sources by 2010 and 33% by 2020;”

Comment: And how, exactly, is this to be done if so much emphasis is to be placed on expanding and investing hugely in fossil fuel projects?

SOURCES

Delivering a sustainable energy future for Ireland.

Energy Policies of IEA Countries - Ireland- 2007 Review

(http://www.iea.org/Textbase/publications/free_new_Desc.asp?PUBS_ID=1923)

4. Ireland and the Kyoto Treaty

By ratifying the Kyoto protocol, the EU has agreed to a cut, on average, by 8% from 1990 emission levels. There are also fines for member nations that fail to meet their obligations, starting at €40/ton of carbon dioxide in 2005, and rising to €100/ton in 2008

Ireland was allowed to increase its emissions by 12% above its 1990 levels. But currently it is 30% above 1990m levels. By failing to meet even this generous target, Ireland will probably have to pay a fine of 7 billion Euro by 2012, or about 2000 Euro for every man woman and child in the country.

From an article in the Irish Examiner: “Ireland is seriously lagging behind the rest of Europe with regard to wind generation despite having the best wind resource in the union.”

Does it make any sense, with this kind of deviation from both the law and the spirit of the Kyoto treaty, to vastly increase the countries reliance on natural gas and other fossil fuels?

SOURCE

Article in Irish Examiner - (http://www.boards.ie/vbulletin/archive/index.php/t-131144.html)