LNG and the energy transition

Liquefied Natural Gas (LNG) is expected to play a key role in the energy transition. Important actions in meeting the goals of the 2015 Paris Climate Agreement are the reduction of the use of diesel and coal as fuels. Impactful measures in this field include the accelerated shutdown of coal burning power plants and increasingly stringent emission regulations for the transportation sector, including older diesel cars being barred from an increasing number of cities. Solar and wind energy are undoubtedly on the rise, but their performance is intermittent by nature and storage of surplus energy on a large scale is not available yet. The use of hydrogen as an energy carrier is studied widely, but practical issues still have to be overcome. Hydrogen’s energy density is low and very high pressures are needed to attain a viable operation of truck or ship engines. Furthermore, because of their tiny size, hydrogen molecules diffuse through the metal container walls.

Natural gas is currently probably the best alternative to traditional fuels, in any case for the time being. Natural gas is still available in abundance, its stocks are expected to last a century, possibly two. It burns relatively clean and its energy density is high. By liquefying natural gas at -162°C, its density is reduced by a factor of about 600. Consequently, the amount of energy that can be transported in the form of LNG is huge.  Furthermore, the production costs of natural gas are low.

The transportation sector accounts for approximately 55% the total liquid fuel demand. The use of LNG in trucks would enable meeting the stringent emission limits of (future) EURO VI standards in a cost-effective way. Truck engines operating on LNG produce about 25% less carbon dioxide and about 85% less nitrogen oxides with respect to diesel engines. Furthermore, they produce much less noise, making them the preferred option for deliveries in urban areas and city centres, particularly in the early morning or late at night (when avoiding peak traffic). The range a truck can drive on one tank of LNG exceeds the its counterpart of an electric truck by a large margin. The above also holds for ships, where the difference in emission between ships operating on LNG and on marine gasoline oil is even larger. Add to this that retrofitting can be done relatively easily, it is expected that the number of trucks and ships operating on LNG will increase rapidly over the upcoming years.

Recent years have shown a growth of the US LNG export and a surge of the import demand in Asia. The mean reason is the low production cost of natural gas and leaps in technical innovation across the value chain, increasing the shift towards natural gas usage globally. Local small-scale LNG facilities in combination with smart meters and smart grids are expected to be able to compensate for the intermittency of solar and wind energy production.  Regional LNG project dynamics, LNG as a fuel for industrial zones and an increased need for city gas distribution, are radically changing the LNG business.

From the above it is clear that the future of LNG is bright. Across Europe a lot of pipeline, liquefaction and regasification infrastructure is already available. For the full-fledged and widespread application of LNG as an energy fuel on a custody level a lot of technology development has already been done and is still ongoing.