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U.S. LNG Should Be Part of Kerry’s Climate Conversations with China

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Special Envoy on Climate Change John Kerry is travelling to China this week to double down efforts on reducing national emissions ahead of November’s Conference of the Parts (COP26) meeting, as well as the upcoming Leaders Summit on Climate hosted by President Biden next week.  

Natural gas has already played a significant role in helping the United States experience “the largest absolute [emissions] decline by any country” since 2000, according to the International Energy Agency, and is expected to be a similar part of the solution to addressing climate change in China. As the U.S. Energy Information Administration explains

“Although natural gas is still a small contributor to China’s overall energy portfolio, it is swiftly becoming an important fuel source, and China is now one of the fastest-growing natural gas markets in the world.” 

As a result of this increased demand, U.S. LNG is poised to become a major source of the country’s natural gas. 

 Here’s a few important stats to keep in mind as these discussions take place: 

 Why is China relevant to the climate change puzzle?  

Chinese energy growth and emissions will shape the upcoming climate conversations:  

  • China has a $15 trillion economy and is the most heavily populated country in the world with roughly 1.4 billion people in 2019, according to the EIA. As a result, China accounted for 22 percent of global energy consumption and 29 percent of total CO2 emissions from fuel combustion, according to the IEA.  
  • China’s unparalleled growth is also currently powered mostly by coal. IEA reports that China is responsible for half the world’s production and consumption of coal. However, it is no longer the key driver of coal demand growth as a result of its energy diversification policy, which includes heavy investment in EV technology, renewables and natural gas.  
  • China is the world’s largest greenhouse gas (GHG) emitter. According to the White House, “China represents almost 30 percent of global emissions, in addition to its carbon-intensive investments abroad.” Hence, it is crucial to factor in China if we (the world) expect to make a significant reduction in our global emissions. 

Natural gas is a key part of the Chinese climate solution.  

  • Chinese policies geared to diversify the country’s energy mix and reduce GHG emissions have resulted in growing natural gas demand.  
  • In fact, as EID has previously explained, nearly 70 percent of total global LNG exports were shipped to Asia, with China becoming the largest natural gas importer in 2018, according to the EIA’s 2020 International Energy Outlook (IEO). 
  • U.S. LNG will naturally play a key role in how China transitions away from higher emitting fuels to a less-carbon intensive economy via natural gas. In fact, during the Sino-American 2020 bilateral trade negotiations, China agreed to buy $52.4 billion in U.S. LNG, crude oil and refined products within a two-year time frame.  

Although the Biden administration has shown openness to growing U.S. LNG exports, it’s unclear if the subject will come up in this week’s talks. What is clear though is that U.S. natural gas will play a major role in helping the world reduce global emissions. As U.S. Energy Secretary Jennifer Granholm recently explained

“[U.S. LNG is often headed to] countries that would otherwise be using very carbon-intensive fuels, it does have the impact of reducing internationally carbon emissions.” 

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