The pause in issuing new Liquefied Natural Gas (LNG) permits is among the least defensible energy policies of this Administration. It has been widely criticized. Jamie Dimon called it naive, and the International Energy Agency worries that it will impede the supply of natural gas on global markets.

The US Department of Energy (DOE), which grants LNG export permits, has published studies (2014 and 2019) which concluded that when buyers of LNG use it to switch away from coal for power generation, it reduces global Green House Gas emissions (GHGs). Coal use is widespread in developing countries and is increasing along with overall electricity demand.

Non-OECD countries represented 85% of global coal consumption last year, up from 82% in 2022. China is 56% of the global total, where it is by far their biggest source of primary energy.

In the hunt for votes, the White House dropped careful analysis in favor of pandering to climate extremists and granting the permit pause they’d long sought. LNG exports allow us to support our friends and allies with cheap, reliable energy, so are in our national interest. But even if you’re a far left progressive with little care for such things, they also reduce global emissions.

Climate extremists focus on the wrong things, like banning new natural gas connections in New York. Their opposition to LNG exports harms the climate. The following math shows why:

The US Energy Information Administration (EIA) estimates that a coal-burning  power plant generates 2.3 lbs of CO2 per Kilowatt Hour (KwH) of electricity, compared with 0.97 lbs for a natural gas power plant. Converting to metric, since GHGs are measured in Metric Tonnes (MTs), this is 1,044 grams for coal and 440 grams for natural gas.

Incidentally, in researching this I was interested to learn that virtually all the carbon atoms in natural gas (methane, CH4) attach themselves to oxygen when burned, creating CO2 in approximately the same volume as the methane that was used. CO2 is around 30% heavier than methane, both of which are denser than air.

Returning to electricity – per KwH of power generation natural gas produces 604g less CO2. According to the EIA, it takes 7.42 cubic feet of gas to generate 1 KwH of power. So each cubic foot of gas reduces CO2 emissions by 81g (604/7.42) assuming it displaces coal in power generation.

The US currently exports around 12 Billion Cubic Feet per Day (BCF/D) of LNG. Maintaining the assumption that this gas is being used instead of coal, 81g  X 12 billion X 365 days means that our exports are reducing CO2 emissions by 356 million MTs annually.

Among non-OECD countries this is closest to the annual CO2 emissions of Vietnam (328 million MTs). Over the next five years our LNG exports will double, in spite of the LNG permit pause, because of LNG export terminals already approved and under construction. At that level the CO2 benefit will be almost equal to Indonesia’s emissions of 692 million MTs.

Most of the drop in US CO2 emissions over the past 15 years is because of coal-to-gas switching. US LNG exports offer the potential to spread that success to other countries. Climate extremists may argue that there’s no guarantee buyers of LNG will use it to reduce coal consumption. But it wouldn’t be hard to make this a condition of export approval.

Moreover, coal emits other local pollutants including nitrous oxides and sulfur dioxides which cause lung damage and lead to millions of premature deaths. So the benefits of natural gas are more than just the 58% reduction in CO2 emissions.

Some may point to methane leaks from gas production as weakening the case. But US standards are higher than elsewhere. We are the leader in having the lowest leaks per unit of production. The world benefits when countries buy from America rather than from another country with lower standards.

Climate extremists such as the Sierra Club and that wretched little girl Greta regularly push for policies that are impractical and will reduce living standards, most especially for people in developing countries. They have an outsized influence over the Democrats, which allows their poorly conceived ideas to sometimes escape into the light of day.

The US has already achieved substantial success in reducing emissions while renewables have remained an inconsequential part of our primary energy.

Texas is the country’s biggest user of windpower and Florida is 3^rd in solar. Massachusetts imports LNG because it won’t allow new gas pipelines and California combines the highest electricity prices bar Hawaii with the least reliable grid.

Red states have more coherent energy policies than blue ones.

Betting on a shift to pragmatic energy policies has been the key to superior returns. We think that will continue to be the case. Long natural gas infrastructure and short renewables has worked for years.

If Kamala Harris loses next week, the influence of climate extremists will not be missed.

We have two have funds that seek to profit from this environment:

Energy Mutual Fund

Energy ETF

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