To get rid of Russian gas, Engie turns around and turns to American shale gas, despite the climate emergency

To get rid of Russian gas, Engie turns around and turns to American shale gas, despite the climate emergency

While the war continues in Ukraine, decision-makers continue to let go of the environment in the face of the new priority announced by Brussels in terms of energy: that of ensuring the security of supply of the Member States, confronted with the immense challenge of replacing 155 billion cubic meters of Russian gas per year, or 40% of their consumption. And for good reason, this perilous equation pushes them to turn in all directions to liquefied natural gas (LNG), originating in particular from the United States.

In any case, this is the argument brandished by Engie, which intends to strengthen itself in American shale gas in order to cut itself off from Russian gas, the latter still representing 20% ​​of its deliveries. Thus, after having had to abandon in 2020, under pressure from the State shareholder (23.64% of the capital) and environmentalists, a mega-contract negotiated with the American NextDecade for the supply of LNG, the French group was finally able to pick up the grail. And will buy 1.75 million tonnes of LNG per year, from the future Texas Rio Grande terminal from 2026 and for fifteen years, NextDecade reported on Monday evening.

A reversal already started at the end of March, since Engie had then extended a contract with another American group, Cheniere Energy, in order to buy more LNG from it than planned, and this for twenty years.

“The current tensions on the energy markets have reinforced the relevance of our strategy of diversifying sources of supply to meet our priority: to ensure the security of supply for our customers”, argues a spokesperson.

A carbon footprint much higher than that of gas transiting through pipelines

The tricolor company, which highlights its ambition to become the ” leader in energy and climate transition », therefore does not intend to abandon the precious hydrocarbon anytime soon, with these new contracts running until 2040 and beyond. And yet, LNG, which must be liquefied and then regasified, and which transits by sea, turns out to be polluting to say the least. In detail, its footprint is 58 grams of CO2 per kilowatt hour (KWh) on average, compared to 23 gCO2/KWh for “conventional” gas transported via pipelines.

Not to mention that the one produced on American soil goes through “hydraulic fracturing”, that is to say deep drilling, mobilizing large quantities of water and chemicals to break up the rocks. A process banned in France since 2011, due to a risk of contamination of groundwater but also of methane leaks, this greenhouse gas with a potential 80 times more warming than CO2 on a twenty-year scale. It was moreover this precise point which had concentrated the criticisms in 2020, and resulted in the renunciation of the contract with NextDecade.

Environmental safeguards

But the situation has changed, defends Engie today. ” NextDecade has made significant progress by committing to reduce emissions at the Rio Grande terminal by 90%, notably through a CO2 capture and storage project “, assures a spokesperson to The gallery. Furthermore, the gas in question will be “ of responsible origin (RSG), sourced from the main gas producers in the Permian basins [le plus grand champ pétrolier des Etats-Unis, ndlr] and Eagle Ford “, with a “ control by an independent third party “, continues the group.

Rio Grande LNG set to produce low-carbon LNG for the world “, prides himself on his side the American producer, who affirms that he will respect” the highest standards in the LNG industry “.

During an investor pitch in June 2021, NextDecade even portrayed itself as “ a clean energy company accelerating the path to a net zero future “.

Engie eyes EDF’s renewable assets to speed up the pace in renewable energy

CO2 capture technology struggles to convince

However, according to a report by Oil Change International published in November 2021, the combustion of oil and gas which should be produced by 2050 in the Permian basin – both by NextDecade and by other private operators – will free ” nearly 40 billion tonnes of CO2, i.e. nearly 10% of the global carbon budget remaining to stay below 1.5°C “. And the capture of CO2 at the outlet of the LNG carrier that NextDecade promises will not be enough to decarbonize this gas. Indeed, the majority of the emissions of this fossil fuel are in fact released when it is burned, and not when it is produced.

Above all, the technology itself continues to be mistrusted. In 2019, the American LNG producer Venture Global, engaged in CCS projects [capture et stockage du carbone, ndlr]had thus expressed his skepticism, and declared to the American Federal Energy Regulatory Commission that these techniques were “not not economically feasible » and that they « would result in significant negative energy and environmental impacts, due to the additional water and energy requirements for the operation of the system, with the associated emission of additional greenhouse gases and other pollutants from the combustion of natural gas “.

From failure to failure, despite the billions on the table

In fact, far from the reassuring speeches of Engie and NextDecade, the path has been strewn with pitfalls. The huge LNG extraction and export complex in Australia, Gorgon, for a time presented by its operator (the American oil giant Chevron), as ” the largest commercial-scale carbon dioxide storage project in the world “, in particular hit the headlines due to technical problems and multiple cost overruns. Thus, while Gorgon was to capture 80% of the CO2 emitted (on a rolling five-year average), Chevron indicated that, even if the LNG had been delivered, the objective of capturing the associated emissions had not been achieved. reached – without, however, disclosing the exact figures.

But according to the American NGO Global Energy Monitor, these would in fact be catastrophic: Gorgon would have managed to capture only 30% of the targeted CO2. A few days ago, a report from the think tank American IEEFA (Institute for Energy Economics and Financial Analysis) drove the point home even further, describing the project as ” failure “.

“If Chevron, Exxon and Shell can’t make Gorgon’s carbon capture and storage work, who will? asks the think tank.

Especially since at Rio Grande LNG, several elements are worrying. Indeed, the company responsible for the future site’s CO2 capture infrastructure, a subsidiary of Mitsubishi, had helped develop emissions reduction technology a few years ago for the power plants of Petra Nova, Texas, and of Kemper, Mississippi – the latter supposedly being the first coal-fired plant”own“. But there again, the two mega-projects had ended up exploding in flight, overwhelmed by exorbitant costs and a crying lack of results. While many experts are now warning of the impasse of a business as usual justified by technological advances, the burden of proof will therefore rest on NextDecade and Engie to show, after these bitter failures, that this time will be the right one.

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