Liquified Natural Gas (LNG) has long been touted as a cost-effective, cleaner ‘transition’ fossil fuel. It’s easy to store and safe to ship. The green credentials of LNG include 40% less carbon dioxide emitted than coal and 30% less than oil.

The gas has long been heralded as a ‘bridge’ gas towards a net zero economy, but perhaps it’s time the green credentials of LNG were put under the spotlight. LNG is around 85-90%7 methane and could be partially responsible for the sharp rise in atmospheric methane reported in 2019. In 2022, high-resolution satellites detected 10 methane leaks at LNG liquefaction facilities.

LNG prices have surged in the past 12 months as European countries scramble to find alternative gas sources to replace Russian imports. The EU has looked to the USA to supply LNG, adopting a common declaration to reduce reliance on Russia for energy. Demand from Asia, the world's largest LNG market, continues to rise.

However, the war in Ukraine has also accelerated the EU's steps to vary its energy supply mix, reduce gas consumption, and accelerate the roll-out of renewable energy. Natural gas consumption in Europe fell by a record-breaking 55 billion cubic meters (bcm) during the 2022/23 heating season — the largest absolute decline in gas consumption in any winter season on record. The EU may be the first to reduce the use of LNGs, but Asia will follow. Japan, the world’s top LNG importer for 51 years, is quickly diversifying its energy mix to reduce reliance on imported LNG. Looking further down the line to a net zero horizon, a fall in demand will likely lead to stranded assets, with shiny new LNG terminals eventually falling into disuse. According to Xinying Tok of Carbon Trust, “If we refer to the IEA’s net-zero technical pathway, it is clear that the amount of LNG that needs to be still in play by 2050 is actually really low.”  Could the next decade be a swan song for liquified natural gas?

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