Oil & Gas News

Natural Gas Given 10-year Expiration Date

Natural Gas, Climate Change

By: MarketWatch – President Biden’s climate envoy, John Kerry, says he’s putting the natural gas industry “on notice,” suggesting it has a decade at most to solve for the emissions that are driving Earth’s temperature dangerously higher.

Kerry, speaking with Bloomberg Television on Thursday, left open the possibility that the industry exists as is, although with the capability to fully capture emissions, including carbon dioxide and the shorter-lasting, but more potent, methane emissions. But he made clear in the interview that time is running out.

“If you can capture the emissions — literally, genuinely — then you’re reducing the problem,” said Kerry, who is Biden’s lead abroad on climate-change matters, including on related trade issues.

Natural Gas

“We have to put the industry on notice: You’ve got six years, eight years, no more than 10 years or so, within which you’ve got to come up with a means by which you’re going to capture, and if you’re not capturing, then we have to deploy alternative sources of energy,” the one-time presidential candidate said.

The natural gas NG00, -1.93% industry sees itself in a continuing role as a “transition” energy source toward a more-renewable future, especially as it has replaced coal in powering much of the nation’s electricity grid.

The industry, which has reduced its natural gas emissions to some degree with better monitoring, is pursuing carbon capture. Capture takes place at the point of combustion and includes the storage and utilization of carbon as a recycled energy source. Plus, the industry sees a future that includes green hydrogen pumped through the existing pipeline network. The technologies behind these moves exist, but commercialization and scalability haven’t yet been realized. Chevron CVX, 0.16%, and other major energy concerns have invested with carbon-capture startups.

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Already, natural gas produces about 50% fewer greenhouse gas emissions than coal when burned to generate electricity.

“I’ll take that 50% reduction for the next eight years because our goal between now and 2030 is to reduce emissions by a minimum of 45% to do what the science has told us we have to do,” Kerry said. “However, no one should make it easy for the natural gas interests to be building out 30- or 40-year infrastructure, which we’re then stuck with and you know the fight will be ‘Well, we can’t close these because of the employment, because of the investors, etc.’”

The climate-focused administration has had to defend recent moves to keep U.S. oil CL00, -1.18%, and natural gas flowing amid high inflation and as Russia’s Ukraine invasion roiled energy markets. Steps have included opening the Strategic Petroleum Reserve and temporarily easing EPA rules on ethanol.

The administration also announced that lease sales for oil and gas drilling on federal land can resume, an expected move after a Louisiana federal court injunction. But, an administration official said, with the ruling, the Interior Department would sharply reduce the acreage available for leases and charge higher royalties on the oil and natural gas produced there, comparable to that on private land.

Natural gas futures prices are up over 150% from this time last year and oil has mostly held above the key $100-a-barrel mark since the Russian invasion.

Biden is in the Pacific Northwest for two days, where he’ll announce more steps his administration plans toward cutting U.S. natural gas emissions in half by 2030, on a path toward net-zero emissions by 2050. The president is seen using the trip to help revive congressional interest in a climate-heavy Build Back Better spending bill or advancing “green” provisions on their own, which his spokesperson says has been the subject of behind-the-scenes negotiations.

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