September 18, 2024

The fact that the mainstream, politicians, and the public do not have a clear and coherent answer to this shows an ongoing lack of sophistication on the climate policy front. After a decade or more of active campaigning on climate change, the lack of a detailed framework for analysis that is publicly understood is holding us back.

The root of the issue is poor analysis of where and how investment needs to be made to make the transition from burning fossil fuels. Areas including those needed to drive transportation, produce chemicals and drugs, power most of what we make, and grow the food we need. Current climate campaign strategies are not helping us understand these things.

LNG is a classic example of this problem.

Centrist liberal climate campaigners continue to focus campaigns on large projects, like new LNG terminals, instead of on actual issues that would support reduction of fossil fuel demand. These ignored investments include things that the public want to support investment in.

The confusion and policy gap is being filled by right-wing business lobby groups and CEOs acting as mouthpieces for the industry. Yesterday, Chevron's CEO Mike Wirth said the White House was attacking natural gas and that was a threat to "energy security for US allies". The focus of the "critique" was on LNG export licences being limited by US regulators. Wirth, it should be noted is a supporter the Republican's anti-climate (and humanity-ending accelerationist) agenda.

• Oil and gas executives know full well why the licences for LNG terminals is regulated the way that it is. The USA (on behalf of the oil and gas majors) want to ensure that now that they are the most important exporter of natural gas that they can control the price of that gas.
• The shift in natural gas trade has to do with geopolitics. There is a massive increase in LNG export because of a shift away from Russian gas in USA allied nations.
• This "increase" in production has just supplanted gas that was being produced elsewhere. It is not a net increase in gas production to supply some imaginary increased demand.
• The same goes for Canada's supply, if Canada does not produce LNG for export, it would not reduce (or impact at all) global net LNG trade.
• The focus on LNG by the liberal environmental movement's shows that they continue to have no sense of global capitalism or geopolitics and the impact that it has on actual climate initiatives.

Just like a plurality of investments going to new fossil fuel projects undermines investment in renewable alternatives, so too does the efforts of environmental activists pointing to non-solutions undermine our ability to affect real change.

Workers in the industry are frustrated at the climate campaigns for exactly this reason. They want a more sophisticated conversation around energy. The world not only deserves one, it is not going to be able to make the transition without one.

Here are some specific examples of confusion around LNG specifically.

• The IEA has said natural gas is part of their plan for transition, opposite of what is generally said by centrist climate campaigners.
• The IEA has outlined a strong preference for reduction of oil and gas demand and thus supply. However, the measures that they are using are based on market signals and private investment. Such a reduction in demand is a hope too far given investment in oil and gas demand sectors continues almost unchanged.
• The IEA looks at global demand and supply, but there continues to be shifts in local capacity that drive the news cycle. As China increases its capacity to generate clean electricity, the USA is increasing its use of natural gas derived energy. These shifts are to do with investment decisions and the regulations that shape those decisions, but are not necessarily impacting net output.
• LNG is not the same as local natural gas. LNG is a much larger problem than locally distributed natural gas because it takes a lot of energy make LNG and ship it around the world, where much of it leaks out before it is burned.
• While LNG for export is a problem for the IPCC targets, the real issue is the type of fracking that is used to extract the gas which is then turned into LNG. Emission of methane and VOCs from fracked gas sites is way worse than the burning of the gas itself. This could be reduced through the implementation of newer technologies, but regulations have not kept pace (as it would reduce profitability of the gas companies).
• Canada producing or not producing LNG will not affect the amount of natural gas that is burned around the world. Supply is not the regulating issue, it is the demand that is attached to the foundation of most of the world's production.

Where does this misunderstanding leave us when it comes to policy around LNG and natural gas?

Here are some points taken from recent climate campaign documents and a response:

• No new projects are needed to meet global natural gas demand as of 2027. This is 100% true. But, without a global analysis, the decision of which projects and in which countries will produce natural gas to meet the declining demand in a Net Zero world is the real debate point.
• No new demand will result in stranded assets. Also could be true, but this statement does not result in less expansion of private capital investment in new projects. Governments do not insure carbon assets with public money. If supply outstrips demand, these LNG investments will become stranded assets. The worry is that we are not sure which assets will become stranded assets, and much of finance capital is fine risking the longer term investment for short term profits.
• Natural gas demand will peak this decade. This is true, but the rate of decline in natural gas usage is of some debate especially in the absence of alternative energy sources coming online.
• Net Zero is necessary to keep the world below 1.5 degrees and avoid catastrophic climate change. This is true, but there isn't a single government policy that is geared towards a net zero world anywhere on the planet. One would need those policies to affect demand to actually reduce burning of fossil fuels. In the mean time, given that energy continues to operate in a private market in response to real demand for energy, the knowledge that the climate will kill us all seems to be having no impact.

Everyone says they want to avoid catastrophic climate change (except Chevron CEOs), but simply asking the government to stop private capital investment through regulations is not going to result in anything.

We also say we know what the real issues are: the giant companies that workers fight every day and the lack of alternatives even being contemplated by politicians or capital. But, we seem to be unwilling to drive a program of regulation and real investments in alternative demand that will lead to a shutting down the supply of fossil fuels.

We are on target for above 4 degrees rise in global temperatures and cataclysmic climate change. This is avoidable, but we have to actually act to stop it and not just complain about all the things driving us there.