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Gas industry tackles growing climate concerns, effects on businesses

With increasing climate change awareness, the natural gas industry is under pressure to prevent further adverse effects on its businesses, and the U.S. LNG sector has chosen to play an active role in reducing global carbon emissions.

Amid a rising tide of anti-gas sentiment, the natural gas industry is finding it needs to step up its engagement with communities, politicians and other stakeholders to prevent the spread of measures designed to sideline fossil fuels, the president of the Western States Petroleum Association said.

Growing climate activism and a race to slash greenhouse gas emissions in California and other states has meant gas utilities suddenly find themselves cast as villains, WSPA President Catherine Reheis-Boyd told the LDC Gas Forums conference in Chicago on Sept. 9. The creeping perception that natural gas, the cleanest burning fossil fuel, is a problem rather than part of the solution threatens to leave gas utilities with the same public relations struggle that has dogged the oil industry for decades, she said.

The industry position may depend on its ability to demonstrate its contributions to society and the environment, according to Reheis-Boyd. Specifically, she said, that means launching a thoughtful, concerted effort to highlight the wage and other benefits the oil and gas industry provides to individual workers and the ways it contributes to broader communities in the form of tax revenue and economic activity. The sector should also avoid positioning natural gas as a "bridge fuel" to a renewable energy future and instead stress gas' potential long-term role complementing variable power sources like solar panels and wind turbines, she said.

"I absolutely think it will gain momentum across the country if we do not engage actively, mindfully and turn that tide around," Reheis-Boyd said.

Seattle put some urgency into the issue when it took a first step toward potentially banning natural gas in new buildings, as an Emerald City lawmaker and environmental leader prepare to introduce legislation modeled after a Berkeley, Calif., ordinance adopted earlier this year.

City Councilman Mike O'Brien has revealed legislation that would prevent developers from installing gas systems in new buildings in Seattle beginning July 1, 2020. The ordinance would help Seattle achieve ambitious targets to reduce greenhouse gas emissions and mitigate the impacts of climate change.

Meanwhile, San Luis Obispo, Calif., recently passed an ordinance to promote building electrification. Dozens of other California municipalities and several cities around Boston also plan to introduce gas bans.

While the rest of the industry worries about its future in an increasingly environmentally aware world, the growing U.S. LNG sector's help in driving down global carbon emissions by displacing coal with exports to world markets would have gas play a bigger role in reducing air pollution and aiding energy transitions, IEA Executive Director Fatih Birol said at an industry event organized in Washington, D.C., by the American Petroleum Institute, the Center for Liquefied Natural Gas and LNG Allies.

Longer-term planning for the adoption of hydrogen, biomethane and carbon capture utilization and storage will enhance the sustainability and social acceptance of gas infrastructure. However, Birol warned that oil and gas companies could undermine that future if they are "greedy" when it comes to investments to reduce carbon emissions. Such investments, even those driven by stringent regulations, would have a nominal impact on the average cost of gas production, Birol said.

Representatives of LNG pioneer Cheniere Energy Inc., fellow exporter Sempra Energy, and export hopefuls Tellurian Inc., NextDecade Corp. and LNG Ltd. said the oil and gas sector needs to step up on reducing carbon emissions as the LNG industry promotes climate benefits of American natural gas.

"We have to be smart," Sempra Vice President Brian Kelly said. "I agree 100%, if we don't start addressing the methane issue, it's going to come back to bite us."