Renewable Energy to Reduce Electricity Generation from Natural Gas

In the EIA’s January Short-Term Energy Outlook (STEO), it is forecasted that rising electricity generation from renewable energy resources such as solar and wind will reduce generation from fossil fuel-fired power plants over the next two years. The forecast share of generation for US non-hydropower renewable sources, including solar and wind, grows from 13% in 2021 to 17% in 2023. It is forecasted that the share of generation from natural gas will fall from 37% in 2021 to 34% by 2023 and the coal share will decline from 23% to 22%.
One of the most significant shifts in the mix of US electricity generation over the past 10 years has been the rapid expansion of renewable energy resources, especially solar and wind. The amount of solar power generating capacity operated by the US electric power sector at the end of 2021 is 20 times more than it was at the end of 2011, and US wind power capacity is more than twice what it was 10 years ago.
Another significant shift in the generation mix has been a steady decline in the use of coal-fired power plants since their peak output in 2007 and the increasing use of natural gas, primarily as a result of sustained low natural gas prices. However, that trend reversed in 2021 when the cost of natural gas delivered to US electric generators averaged US$4.88 per million Btu, more than double the average cost in 2020. As a result, the share of generation from natural gas declined from 39% in 2020 to 37% in 2021, while the share of generation from coal rose for the first time since 2014 to average 23%.
In the EIA’s current STEO, it is forecasted that most of the growth in US electricity generation in 2022 and 2023 will come from new renewable energy sources. It is estimated that the electric power sector had 63 GW of existing solar power generating capacity operating at the end of 2021, and it is forecast that solar capacity will grow by about 21 GW in 2022 and by 25 GW in 2023. It is expected that 7 GW of wind generating capacity will be added in 2022 and another 4 GW in 2023. Operating wind capacity totalled 135 GW at the end of 2021.
This forecast of growth in renewable electricity generation over the next two years leads to a forecast of a reduced need for fossil-fuelled generation. Although it is expected that natural gas prices for electric generators will decline, the operating costs of renewable generators will continue to be generally lower than natural gas-fired units. Regions of the country with the largest increases in renewable capacity, such as Texas and the Midwest/Central regions, will experience the largest reductions in natural gas generation.

Hydrogen to Cover 12% of Global Energy Use by 2050

The International Renewable Energy Agency (Irena) estimated that hydrogen will cover up to 12 per cent of global energy use by 2050.
“Hydrogen could prove to be a missing link to a climate-safe energy future,” Francesco La Camera, Director-General of Irena, said while presenting the key findings of new report: ‘Geopolitics of the Energy Transformation: The Hydrogen Factor’ in Abu Dhabi.
According to the agency’s analysis, rapid growth of the global hydrogen economy can bring significant geoeconomic and geopolitical shifts giving rise to a wave of new interdependencies. The report noted that hydrogen is changing the geography of energy trade and regionalising energy relations, hinting at the emergence of new centres of geopolitical influence built on the production and use of hydrogen, as traditional oil and gas trade declines.
Irena estimated that driven by the climate urgency and countries’ commitments to net zero emission, hydrogen could account for up to 12 per cent of global energy use by 2050.
“Hydrogen is clearly riding on the renewable energy revolution with green hydrogen emerging as a game changer for achieving climate neutrality without compromising industrial growth and social development. But hydrogen is not a new oil. And the transition is not a fuel replacement but a shift to a new system with political, technical, environmental and economic disruptions,” La Camera said.
Growing trade and targeted investments in a market dominated by fossil fuels that is currently valued at $174 billion is likely to boost economic competitiveness and influence the foreign policy landscape with bilateral deals diverging significantly from the hydrocarbon relationships of the 20th century.
“It is green hydrogen that will bring new and diverse participants to the market, diversify routes and supplies and shift power from the few to the many. With international cooperation, the hydrogen market could be more democratic and inclusive, offering opportunities for developed and developing countries alike,” La Camera noted.
Irena estimated that more than 30 per cent of hydrogen could be traded across borders by 2050, a higher share than natural gas today. Countries that have not traditionally traded energy are establishing bilateral energy relations around hydrogen.
Cross-border hydrogen trade is set to grow considerably with over 30 countries and regions already planning for active commerce.
“Some countries that expect to be importers, such as Japan and Germany, are already deploying dedicated hydrogen diplomacy. Fossil fuel exporters increasingly consider clean hydrogen an attractive way to diversify their economies, for example Australia, Oman, Saudi Arabia and the UAE. However, broader economic transition strategies are required as hydrogen will not compensate for losses in oil and gas revenues,” the report mentioned.
The technical potential for hydrogen production significantly exceeds estimated global demand. Countries most able to generate cheap renewable electricity will be best placed to produce competitive green hydrogen.
“While countries such as Chile, Morocco and Namibia are net energy importers today, they are set to emerge as green hydrogen exporters. Realising the potential of regions like Africa, the Americas, the Middle East, and Oceania could limit the risk of export concentration, but many countries will need technology transfers, infrastructure and investment,” the report said.
The geopolitics of clean hydrogen will likely play out in different stages. The report noted the 2020s as a big race for technology leadership. But demand is expected to only take off in the mid-2030s. By that time, green hydrogen will cost-compete with fossil-fuel hydrogen globally, poised to happen even earlier in countries like China, Brazil and India.
Countries with ample renewable potential could become sites of green industrialisation, using their potential to attract energy-intensive industries.
Green hydrogen may strengthen energy independence, security and resilience by cutting import dependency and price volatility and boosting flexibility of the energy system.
“Shaping the rules, standards and governance of hydrogen could lead to geopolitical competition or open a new era of enhanced international cooperation. Assisting particularly developing countries to deploy green hydrogen technologies and advance hydrogen industries could prevent the widening of a global decarbonisation divide and promote equity and inclusion, creating local value chains, green industries, and jobs in renewable-rich countries,” the report added.

Japan’s ‘Carbon Neutral’ LNG Shipments May Not Offset Emissions

Japan’s natural gas industry is making controversial claims about the fuel to make it more appealing to climate-conscious buyers.
Tokyo-based Inpex Corp. this month said it sold two “carbon neutral” liquefied natural gas shipments to Shizuoka Gas Co. and Toho Gas Co., offsetting the fuel’s lifetime emissions using credits from projects that include forest conservation in Indonesia. Those credits would offset more than 450,000 tons of carbon-dioxide emissions from the two shipments, covering the entire value chain from production to combustion, according to spokespeople at Shizuoka Gas and Toho Gas.
The three Japanese companies said they will use the credits to meet their targets for zero emissions. The companies didn’t disclose who paid for the credits, price or supplier.
But terms such as “carbon neutral” and “net zero” imply balancing emissions by removing an equivalent amount of carbon from the atmosphere. Climate scientists at bodies including the United Nations-backed Science-Based Targets initiative say measures such as preventing deforestation or supporting renewable energy projects actually do little to extract additional carbon from the air, and shouldn’t contribute to net-zero claims.
Inpex, whose biggest shareholder is the Japanese government, is aware that SBTi does not consider the use of compensation-type offsets for net-zero calculation, and understands the intention is for companies to prioritize initiatives on reducing their own emissions impact, according to a spokesman.
To that effect, Inpex “will proactively engage in energy structure reforms toward the realization of a net-zero carbon society by 2050,” the company said in an emailed statement. “The strategy includes, but is not limited to, upstream CO2 reduction and developing a hydrogen business.”
A Toho Gas spokesperson said that the credits were certified by Verra, an internationally recognized organization, and they are assisting in removing carbon dioxide from the environment. Verra did not immediately respond to a request for comment.
While the Japanese companies declined to comment on the price of the carbon offsets, LNG traders surveyed by Bloomberg over the last year say that those type of credits generally cost less than $6 a ton. That compares with about 61 euros ($72) a ton emitters pay in the European Union’s carbon market, the world’s most advanced.
An Inpex spokesman said that the Intergovernmental Panel on Climate Change’s special report on the impacts of global warming suggests it will be necessary to reduce and remove carbon dioxide emissions through forests in order to keep global warming within 1.5 degrees Celsius.
The practice of marking LNG shipments as “carbon neutral” has garnered criticism as there is no standard for measuring emissions from LNG, nor is there government oversight to ensure that offsets come from projects that deliver the carbon savings promised. Japan has been the top destination for these cargoes, importing nine of the 24 shipments since 2019, according to BloombergNEF.
The adoption of LNG with carbon offsets shows the challenges facing Japan and its pledge to achieve net-zero emissions by 2050. The archipelago nation is heavily reliant on imported fossil fuels and has little space for massive solar projects or onshore wind farms. The country is yet to fully embrace technologies like offshore wind and carbon capture and storage, which could help its decarbonization goals without needing a lot more land.
That’s why Japanese companies from utilities to hotels have been eager to purchase “carbon-neutral” natural gas, as they can tell customers and investors that they are zeroing-out emissions by paying a small premium. That’s despite experts warning against the use of offsets for balancing carbon books.

India Seeks to Move Coal to Areas of Shortage as Power Demand Rises

India’s power minister on Saturday asked officials to consider diverting coal to power plants with extremely depleted stocks as shortages at some plants push several utilities to the verge of running out of fuel.
Power minister R.K. Singh asked officials to “streamline the stock and supply of coal”, including a reduction in inventory targets to 10 days from 14 days, to allow coal to be moved to areas of greatest shortage as energy demand rises.
Singh said India’s electricity demand is likely to continue increasing and also asked utilities to consider blending imported coal with local fuel to address shortages.
India’s electricity generation rose by 16.1per cent in August compared with a year earlier, a Reuters analysis of government data showed, lifted by a 23.7per cent jump in coal-fired power generation that has led to shortages at utilities.
Data from the Central Electricity Authority showed more than a half of India’s 135 coal-fired power plants had less than a week’s supply of coal left, of which 50 had fewer than three days left. Six plants had run out of coal.
India is the world’s second-largest importer of coal despite having the fourth-largest reserves, and coal burning generates nearly three-quarters of the country’s electricity demand.
Coal shortages occur periodically in India, with the last such shortage occurring in 2017. Production of coal typically slows during India’s annual monsoon in June through September.
India has also urged utilities to import coal to meet the shortage. The country mainly imports coal from Indonesia, Australia and South Africa.

China Coal Approvals Seen Adding to Confusion on Climate Action

Approvals for major new coal power plants by China’s local authorities show the tension in the nation’s efforts to meet climate goals, even as the overall total of projects given the go-ahead falls, according to campaigners.
Local authorities approved 24 plants with a combined capacity of 5.2 GW, a 79% decline from the same period in 2020, Greenpeace said in a report published Wednesday. Even so, the majority of that capacity will come from three large-scale projects earmarked for potential support from central government.
“There are still mixed signals on coal. That leads to financial and environmental risk,” said Li Danqing, a Beijing-based project leader for Greenpeace East Asia. “Provinces are clearly still anticipating financial support on coal.”
China’s policymakers have offered at-times conflicting signals on plans to meet President Xi Jinping’s goal to zero out greenhouse gas emissions by 2060, and to begin reducing coal consumption from 2026. Immediate steps to cut pollution are being balanced against efforts to secure power supplies and to support a heavy industry-led recovery from the pandemic.
The Communist Party’s Politburo last month called for a more coordinated, orderly approach to carbon neutrality, a move that’s been widely interpreted as a signal to avoid aggressive measures.
Most new coal approvals identified in the Greenpeace report are for relatively small plants designed to provide both electricity and heat for industrial parks or dense urban dwellings. The other three, however, are massive generators designed only for electricity generators, accounting for 3.3 GW of capacity in the coal-rich provinces of Anhui and Shaanxi.
There are still almost 105 GW of coal-fired power plants included on lists of projects that could qualify for preferential treatment from China’s federal government, Greenpeace said.
A separate study earlier this month showed state-owned firms had proposed 43 new coal-fired generators and 18 new blast furnaces in the first half of 2021.

US Coal and Oil Demand on the Rise again in Blow to Climate Goals

America’s appetite for fossil fuels has come roaring back as the economy cranks into gear, providing a boost to energy groups but flying in the face of Washington’s drive to slash emissions.
Motorists’ return to the roads following the loosening of pandemic restrictions is pushing up fuel demand and the bottom lines of oil refiners, while a shift away from natural gas in power generation has been a boon to coal miners.
The resurgence comes as floods and wildfires in many parts of the world lay bare the destructive impacts of climate change, which a landmark report last week determined was “unequivocally” the result of human activity – mainly through the burning of fossil fuels.
Petrol demand collapsed last year as the pandemic forced people to stay home. But the vaccine rollout and a loosening of restrictions has allowed American motorists to return to roads in force this summer. Petrol consumption hit record levels of more than 10 million barrels a day early last month.
The surge in demand has pushed up fuel prices and sparked alarm in the Biden administration, which last week pressed Russia and Saudi Arabia to increase oil production to cool the rally.
The federal Energy Information Administration expects Americans to burn through a daily average of 8.8 million barrels of petrol this year, up 10 per cent on last year, but below the 9.3 million b/d consumed in 2019, largely thanks to an increase in people working from home.
‘Demand at pre-pandemic levels’
Burgeoning fuel demand has provided a boost to oil refiners that were hit hard by last year’s collapse. Companies have ramped up volumes, with many swinging back into profit after posting hefty losses last year.
“There was a significant increase in mobility in the second quarter, driving higher demand for refined products, particularly in the US,” Joseph Gorder, chief executive of Texas-based Valero, the biggest global independent refiner, told analysts recently. “In fact, we’re seeing demand for gasoline and diesel in excess of pre-pandemic levels in our US Gulf Coast and mid-continent regions.”
Greg Garland, chief executive of Phillips 66, said that demand for the oil refiner’s gasoline, jet fuel and diesel drop by 70 per cent during the early stages of the pandemic in 2020.
“People were predicting the end of the world. You had governments literally shut down their economies globally,” Garland said at the company’s headquarters in Houston last week.
Garland said that refining companies were still under pressure. “Volumes are improving substantially,” he said, “but we need the whole world to get back to where it was.”
Decline forecast for 2022
US coal demand is also rising sharply, but for a different reason. Climbing natural gas prices have spurred power producers to burn more of the dirtiest fossil fuel once again. The EIA estimates that coal consumption in US electricity generation will jump 17 per cent to 511.7 short tons this year.
It means that as the US president Joe Biden battles to push sweeping new clean energy legislation through Congress, his first year as president will coincide with a resurgence in the use of coal.
EIA forecasts coal consumption to decline again in 2022, part of a long-term trend driven by the retirement of older thermal power plants. But for now, producers are enjoying the respite. Peabody Energy, the US’s biggest coal mining company, reported sales to US power plants jumped more than 20 per cent in the second quarter.
“In the US, thermal coal market indicators are favourable,” James Grech, chief executive of Peabody, told analysts.
While refiners and coal producers welcome the spike in fossil fuel consumption, it goes against the grain in Washington, where the president wants to cut emissions in half by the end of the decade from 2005 levels by weaning America off oil and coal with a shift to electric vehicles and renewable electricity.
Emissions from energy use will rise 7 per cent this year, according to the EIA, though they will remain below 2019 levels, having fallen 11 per cent last year.
Steve Nalley, EIA acting administrator, said there would be “significant” growth in carbon emissions from the energy sector as the economy opened back up, but said the agency did not anticipate them returning to pre-pandemic levels in the short term. – Copyright The Financial Times Limited 2021

Can Carbon Capture Tech Save North Sea Oil Production?

As North Sea oil exploration and production will continue for years to come, oil companies look at ways to reduce emissions following significant criticism from environmentalists. But will cutting emissions sway public opinion on Britain’s ongoing oil and gas activities? This month, the U.K. government announced $22.8 million for projects to reduce emissions in the North Sea oil and gas sector. Projects include the repurposing of existing pipelines for hydrogen exports. The investment will come from the Scottish government’s Energy Transition Fund as part of the U.K.’s aim for net-zero carbon emissions by 2050.
In addition, as of July, all companies operating in the North Sea had to agree to the U.K.’s North Sea transition deal requiring them to act on reducing carbon emissions across oil and gas projects while continuing to maintain the country’s energy security.
Thanks to strict regulations overseen by the Gas Authority, the Offshore Petroleum Regulator for Environment and Decommissioning, and the Health and Safety Executive, the oil and gas industry in the North Sea is ahead of the curve in comparison to other U.K. industries when it comes to carbon-cutting, through the use of innovative technologies such as carbon capture and storage (CCS).
In addition, oil companies invested in the region have already begun to develop several renewable energy projects. Equinor Hywind has invested in the world’s first floating offshore windfarm, off the coast of Scotland, providing electricity for around 20,000 homes. Acorn has developed a CCS project in St Fergus, Peterhead, expected to come into operation in the mid-2020s, and aimed at capturing around 300,000 t/yr of carbon emissions from the existing gas plant to be stored.
But many continue to criticize the U.K. for its enthusiasm over continued operations in the North Sea, in an industry that shows no sign of slowing despite international pressure from the International Energy Agency(IEA).

In fact, in recent months the U.K. government has faced legal action for its plans to explore the 800-million-barrel Cambo oilfield near Shetland following government guarantees that it would end new oil exploration licences not aligned with national climate goals.

The head of the Greenpeace U.K. oil campaign, Mel Evans, stated: “The government is signing off on new oil and is willfully ignoring the carbon emissions that come from burning the oil that’s extracted.” Further, “If the UK government approves Cambo we could torpedo the world’s chances of meeting climate targets, and Boris Johnson will be a figure of failure on the world stage at the upcoming Cop26 climate talks in Glasgow.”
Criticism also comes from the leader of the opposition, Kier Starmer, who says that drilling in the Cambo oilfield should not go ahead, and the decision for further exploration is at odds with the upcoming COP26 climate conference, to be held in Glasgow this October.
However, the government argues that the Cambo oilfield was licensed in 2001, prior to the new rules on exploration. If it goes ahead, project operations are expected to start in 2022 and run for around 25 years.
But as the U.K. and Scottish governments, as well as private oil companies, invest heavily in carbon emissions-cutting technologies and add renewable energy projects to their operations, will this be enough to convince the IEA and the British public that continued oil and gas exploration in the region is justified? The COP26 climate conference will likely provide the come away needed to understand the international and local expectations for the future of oil and gas in the North Sea.

The World Is on the Brink of Catastrophe

Failure to act now on climate change will result in “catastrophic” consequences for the world, the leader of the United Nation’s next climate talks has warned.
“I don’t think there’s any other word for it,” Alok Sharma, the British minister in charge of the 26th UN Climate Change Conference (COP26), told British newspaper The Observer, warning that the annual talks, which will take place in Glasgow, Scotland in November, would be among the last chances to limit global heating and save lives.
“This is going to be the starkest warning yet that human behavior is alarmingly accelerating global warming and this is why COP26 has to be the moment we get this right. We can’t afford to wait two years, five years, 10 years — this is the moment,” he said.
Sharma’s comments came one day before the Intergovernmental Panel on Climate Change (IPCC) is due to release its latest assessment, which has been years in the making and will likely provide the most conclusive look yet at the extent of human-made climate change.
The IPCC — the global scientific authority on climate change — warned in a landmark 2018 special report that the world only has until 2030 to drastically reduce its dependence on fossil fuels and prevent the planet from reaching the crucial threshold of 1.5 degrees Celsius above pre-industrial levels.
The 1.5-degree marker has been identified as a key tipping point beyond which the risk of extreme drought, wildfires, floods and food shortages will increase dramatically.
The consequences of global warming was already clear, Sharma said: “You’re seeing on a daily basis what is happening across the world. Last year was the hottest on record, the last decade the hottest decade on record.”
This week alone there have been severe fires in Greece, Turkey, Siberia and the United States, while once-in-a-century flooding has wreaked havoc parts of Europe and Asia in recent weeks.
A summer of record-setting heat in southern Europe has set off devastating wildfires that have torn through forests, homes and destroyed vital infrastructure from Turkey to Spain. And this summer, devastating floods in Western Europe engulfed houses and streets, and claimed dozens of lives.
“I don’t think we’re out of time but I think we’re getting dangerously close to when we might be out of time. We will see [from the IPCC] a very, very clear warning that unless we act now, we will unfortunately be out of time,” Sharma told The Observer.
Many countries have pledged to become carbon neutral by the middle of the century and several of the world’s biggest economies, including the US, the European Union, the United Kingdom and Canada, have overhauled their short-term emission cutting targets.
However, the UN has warned that details on how they are planning to get there remain vague.

The Great Toyota Zero-Emissions Summer Olympics Debacle

Do you remember this CNET Road Show headline from 2019? “Toyota will use Tokyo Olympics to debut solid state battery electric vehicle.” The 2020 Olympics were supposed to showcase the zero emissions talents of the Japanese auto industry, with crowds of people moving seamlessly from place to place using self-driving electric or hydrogen fuel cell vehicles. Covid-19 devastated the auto industry, of course, but it also meant companies had an extra year to perfect their zero emissions vehicles.
In March 2020, Japanese Prime Minister Shinzo Abe told the world, “During the Olympics and Paralympics, cars and buses will run through the city powered by hydrogen, and the athletes’ village will run on electricity made from hydrogen.” A bold promise that was built on a lie. There is nothing “green” about those fuel cell powered buses. Then, as now, the supposedly “clean” hydrogen available in Japan is made primarily from natural gas at existing chemical plants using a process that emits copious amounts of carbon dioxide.
Things aren’t going to improve for Japan’s vaunted hydrogen economy any time soon. The country’s plans for a future supply of hydrogen amounts to importing large amounts of it from Australia, where it will be made from coal using carbon capture technology that does not exist.
Even if there was a supply of green hydrogen, the fuel cell buses Toyota has been selling since 2018 have failed to live up to their promise. According to the Financial Times, the economics just don’t pencil out for them. To begin with, they cost $900,000 for a 6 year lease compared to $220,000 for a diesel-powered bus with a useful life of 15 years.
To get the first 100 buses into service, local and national authorities had to pony up subsidies to cover 80% of the lease cost. Even that is not enough to make them competitive. “The fuel costs are also higher,” says Daisuke Harayama, who is in charge of operations at Tokyu Bus, a private company that has introduced two of the fuel cell buses. “The fuel cost is 2.6 times higher for FCVs over diesel.” Most bus terminals in Japan also have no hydrogen refueling capacity, meaning the buses have to be driven to the nearest hydrogen fueling station, which takes time and costs money.
Harayama adds, “I think it will be hard to go to fuel cells for now. We don’t look at it as whether fuel cells are good or bad. There’ll come a time when we can no longer use diesel so we need to think about the options.”
The Financial Times concludes, “For now, however, the environmental benefit of the buses that will ship Olympic athletes and officials around the city is hypothetical. The Olympic flame (which is powered by hydrogen) will burn prettily, but to make a true transition to a hydrogen society will require years of patient effort — and some big breakthroughs on cost.”
As for solid-state battery technology from Toyota, that is pie in the sky for now as well. Even with significant support from the Japanese government, the timeline for solid-state batteries from Toyota stretches far into the foreseeable future.
No one can be faulted for dreaming big. Elon Musk certainly has and things have turned out fairly well for him and Tesla. But the hydrogen saga is a Japanese nightmare. The government and major corporations like Toyota are banging their heads against a brick wall trying to find a way to avoid being followers in the EV revolution instead of leaders, but it isn’t working.
Hydrogen may hold significant promise when it comes to lowering carbon emissions in the steel industry, but as a transportation fuel, it simply can’t compete with battery electric vehicles. Insanity is defined as doing the same thing over and over and expecting different results. The torrent of promises and lack of results from Toyota are just sad to see. What Toyota and the Japanese government are doing is almost too painful to watch.

Blue Hydrogen has a Methane Problem

Amid the global transition to clean fuel, conventional oil and gas companies appear to have found a way to stay relevant: blue hydrogen.

Hydrogen, typically produced by breaking methane inside liquefied natural gas into hydrogen and carbon, is labeled as blue, when all carbon emissions from this process are captured, stored, or reused.

This decarbonized hydrogen offers the oil and gas companies a path toward clean fuels while drawing on their existing gas production, transportation and storage facilities.

Major South Korean conglomerates — SK and Posco — have jumped into the blue hydrogen business and plan to invest billions of dollars.

However, experts warn that though blue hydrogen emits zero carbon, the decarbonized hydrogen isn’t as clean as it seems, as its feedstock natural gas emits methane — one of the most potent greenhouse gases — throughout the entire lifecycle.

According to the Committee on Climate Change, an independent public body that advises the UK government on climate change, the value chain of natural gas — from its drilling, production, processing, transportation and distribution — emits methane due to combustion, unintentional leakage from containers or purposeful venting.

When all these prior stages of natural gas are included, 1 to 5 kilograms of greenhouse gases are emitted per kilogram of blue hydrogen.

“Natural gas companies don’t want to talk about these things. But the truth is, methane is 28 times more powerful than carbon at trapping heat and warming the Earth,” said Lee Seung-hoon, director at H2Korea, a hydrogen think tank under the Ministry of Trade, Industry and Energy.

In an opinion piece for the Hill, Robert Howarth, professor of ecology and environmental biology at Cornell University, said combined total greenhouse gas emissions of blue hydrogen exceed that from using either coal or natural gas directly and that emissions of leaked methane are rife throughout the process.

A recent report from the United Nations Environmental Program highlighted that pound for pound, methane is 86 times more powerful a greenhouse gas than carbon is over 20 years, and 25 percent of the global warming experienced by the Earth in recent decades has been driven by methane.

Criticism that blue hydrogen eventually facilitates the production of fossil fuel has propelled a global movement to produce carbon-neutral natural gas. The low-carbon natural gas, while not mainstream yet, captures greenhouse emissions through the entire lifecycle from its upstream supply, liquefaction, production, shipping, regasification and downstream supply.

SK E&S, the nation’s No. 1 city gas provider, and Korea Midland Power, aim to invest 5.3 trillion won ($4.6 billion) and establish a 250,000-ton blue hydrogen production facility in Boryeong, South Chungcheong Province, by 2025.

“The facility will produce blue hydrogen with ‘carbon-free’ natural gas imported from Australia. The carbon-free natural gas captures all greenhouse gas emissions throughout its entire value chain,” an SK E&S official said.

Posco, the country’s leading steelmaker aims to produce 500,000 metric tons of blue hydrogen with global partners by 2030. Posco has yet to decide on its partners. It’s unknown whether the steelmaker will use typical natural gas or a low-carbon one.

In 2018, Korea emitted 727.6 million tons of greenhouse gases, a 149 percent surge from 1990, with methane accounting for 3.8 percent.