Death by a thousand cuts for Shannon LNG as Irish Government Energy Review prefers a state-owned gas storage facility and refuses to support Shannon LNG US fracked gas import project
- Shannon LNG planning process to be halted as Public consultation on the preferred energy option should take another 6 months before being confirmed
- Minister Ryan has until the close of the Shannon LNG planning public
consultation on October 10th to inform An Bord
Pleanála that Shannon LNG is still not supported by the Energy
Review - a move that should lead to Shannon LNG being refused planning permission.
View the Energy Review Preferred Options here. Public consultation on the shortlisted options close on October 28th) In a move expected to bring death by a thousand cuts for the Shannon LNG US
fracked gas import project, the Irish Department of the Environment,
Climate and Communications has published the policy options it is
proposing as part of its review of the Security of Energy
Supply of Ireland's Electricity and Natural Gas Systems. Shannon LNG is
not the preferred option and it is now widely expected that this should lead
to An Bord Pleanála refusing planning
permission for the
controversial fracked gas import project in Tarbert, County
Kerry. At the very least, it is now impossible for An Bord
Pleanála to legally make a decision in favour of Shannon
LNG until the public consultation on the Energy Review options is
completed in about 6 months time as that would be contrary to the
existing government policy and preferred future policy.
Shannon
LNG's proposed type of project, a commercially-operated Floating LNG
Terminal, has been specifically rejected for short listing as a gas
mitigation option in the Technical Analysis of the Security of Energy
Supply of Ireland's Electricity and Natural Gas Systems under the
following rationale:
- A floating LNG terminal
could be leased for a limited number of years with the terminal being
transported elsewhere at the end of the leasing period.
- Commercial
operation is likely to result in the importation of fracked gas to
Ireland. This would be in contradiction to the Government’s opposition
to the use of natural gas produced from fracking (the report notes:
""DECC (2021) ‘Policy Statement on the Importation of Fracked Gas’,
available on gov.ie" and "We note that the Office of the Attorney
General concluded in 2021 that it is not possible for Ireland under the
European Treaties or EU Directive to ban the import into Ireland of
fracked gas (available on gov.ie). Even if legally viable, it may be
extremely difficult in practice to isolate fracked gas within global
LNG supply chains. For example, the majority of US gas production is
from fracking with injection into transportation infrastructure before
it is exported. Restricting fracked gas would effectively mean banning
US LNG imports, which would restrict imports from one of the largest
and most reliable sources of LNG.")
- The
additional energy requirements associated with LNG relative to natural
gas supplies (including liquefication, transport, and re-gasification)
mean that the embedded emissions in LNG can exceed that of natural gas.
- As
storage stocks would be driven by market fundamentals, there would be
no guarantee that stored gas volumes would be sufficient to cover a
security of supply shock. This risk could be partially mitigated by
requiring the LNG facility to hold a minimum volume of LNG in reserve
to meet any emergent security of supply risks.
 26
We note that the Office of the Attorney General concluded in 2021 that
it is not possible for Ireland under the European Treaties or EU
Directive to ban the import into Ireland of fracked gas (available on
gov.ie). Even if legally viable, it may be extremely difficult in
practice to isolate fracked gas within global LNG supply chains. For
example, the majority of US gas production is from fracking with
injection into transportation infrastructure before it is exported.
Restricting fracked gas would effectively mean banning US LNG imports,
which would restrict imports from one of the largest and most reliable
sources of LNG.
27 DECC (2021) ‘Policy Statement on the Importation of Fracked Gas’, available on gov.ie
28
For example, the UK North Sea Transition Authority has estimated that
LNG imports into GB are on average over double the emission intensity
of UK gas production and pipeline gas imports from Norway. Available on
nsauthority.co.uk
29 We assume that a back-up facility would only operate during periods in which there is a material risk of demand disruptions.
Shannon LNG had claimed
to An Bord Pleanála in August that "knowledge of outcome of the Review
is not a relevant consideration in relation to a potential decision by
the Board".
However, the official government Policy on the importation of fracked
gas published on May
18th, 2021 had stated that “pending the outcome of the review of the
security of energy supply of Ireland’s electricity and natural gas systems, it
would not be appropriate for the development of any LNG terminals in Ireland to
be permitted or proceeded with”. In addition, Shannon LNG itself also admitted to the Board in August that it had "applied to qualify for the Capacity Auction in March 2022 but was refused on
the grounds of “REJECT on the basis of Government Policy on the importation of fracked gas. The Government
Policy states that pending the outcome of the review of the security of energy of Ireland’s electricity and gas systems
it would not be appropriate for the development of any LNG terminals in Ireland to be permitted or proceeded with.”" Minister
Ryan has until October 10th to inform An Bord Pleanála
of the outcome of the review given the misleading assertions by
Shannon LNG that the outcome of the review is not a relevant
consideration in releation to a potential decision by the Board.October
10th is the deadline of the new public consultation triggered by An
Bord Pleanála following what it considered s ignificant new information. The Board had demaned clarifications from Shannon LNG following
its written admissions that the upstream emissions of LNG
are 2.5 times greater than those of natural gas from the UK gas network
currently supplying gas to Ireland.
The policy statement on the importation of fracked gas
also declares that "Ireland imports much of its natural gas via the two
interconnector pipelines from Moffat in Scotland, which provide the majority of
natural gas currently used in Ireland. Given the level of fracked gas in the
imports from Scotland is considered very low, the highest risk of fracked gas
being imported into Ireland on a large-scale would be via liquefied natural gas
(LNG) terminals, if any were to be constructed".
For the security of
energy supply review, the Department for the Environment had ordered that “any options identified must be in keeping with the commitments
in the Programme for Government. This includes any policy statement that is
developed to establish the approach to the Government’s stated commitment not
to support the importation of fracked gas”. On
Friday September 9th, prior to the publication of the report, the
Department released a statement saying that Minister Ryan "would bring forward a paper next week that would set out options for strategic gas storage capacity from the grid
in Ireland. He said that a state-owned storage capacity (as opposed to
a commercial gas storage facility) would be available to Irish people
in the event of any supply disruption, without breaching our climate
plans or increasing emissions. He also said that gas storage would have
to be compatible with the move towards hydrogen derived from
renewables, which would be Ireland's best long term strategic energy
solution." View the full energy review options report here:
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