“Green LNG” – A Pathway For Natural Gas In An ESG Future?

forbes.com/sites/thebakersinstitute/2020/10/26/green-lng--a-pathway-for-natural-gas-in-an-esg-future

26 October 2020

© 2021 Forbes Media LLC. All Rights Reserved

Oct 26, 2020,12:28pm EDT|7,335 views

Baker Institute
Contributor
Energy
We cover global issues in oil, natural gas, energy and policy

Tugs guide the Golar Maria, a Liquefied Natural Gas (LNG) tanker, part of the Wilh.Wilhelmsen ... [+]
BLOOMBERG NEWS

By Kenneth B. Medlock, III, Steven R. Miles and Marcia Hook

In the energy industry, it has long been the conventional wisdom that natural gas will serve as a “bridge
fuel” to a low-carbon future. Industry participants and some policymakers have touted the benefits of
natural gas as a climate-friendly substitute for more carbon-intensive fuels, such as coal. This wisdom is
being challenged, however, as the natural gas industry faces increasing pressure from investors,
regulators, and customers to do more to help meet climate change objectives and Environmental, Social,
and Governance (ESG) investing and financing goals. Already, more than 3,100 investors with $110

1/11
trillion in assets under management have signed on to the Principles for Responsible Investment, which
supports its signatories in incorporating ESG factors into their investment and ownership
decisions. Banks and other lenders are voluntarily joining industry-led groups such as the Partnership for
Carbon Accounting Financials, which has 70 members with $9 trillion in assets under management. In
response to this pressure, liquefied natural gas (LNG) producers have begun looking for ways to reduce
or offset their carbon footprints. This has helped fuel the emergence of a new product within the LNG
industry: Green LNG.

The Green LNG market is nascent and the “Green” in Green LNG refers to either reducing greenhouse
gas (GHG) emissions or offsetting GHG emissions associated with some or all of the LNG value chain –
from upstream gas production and pipeline transportation, through to liquefaction, ocean transport,
regasification, and downstream use of the natural gas (see Figure 1). Companies in the LNG value chain
can reduce GHG emissions in a number of ways, including using biogas for feedstock, reducing
emissions from upstream, pipeline, and liquefaction facilities, using renewable energy to power their
liquefaction facilities, and using carbon capture, utilization, and storage (CCUS) technologies. LNG
sellers can offset their GHG emissions by purchasing offsets to compensate for all or part of their GHG
emissions or engaging directly in activities that offset GHG emissions (e.g., afforestation or reforestation,
or investment in renewable energy).

Figure 1. The LNG Value Chain

(Credit: Baker Botts LLP)

A number of factors will drive an LNG seller’s decision whether to reduce or offset GHGs from some or all
of the LNG value chain, including the degree of control the LNG seller has over the various parts of the
value chain. Many U.S. LNG sellers do not own or control the gas supply upstream of the LNG
liquefaction facility. As a result, such a seller cannot itself reduce GHG emissions from upstream
operations. However, the seller may be able to contract with its upstream suppliers to measure, reduce,
and verify GHG emissions. Another key consideration could be price. Certified Emissions Reductions
(CERs) are credits generated through the Clean Development Mechanism of the Kyoto Protocol that
represent carbon dioxide (CO2) reductions associated with specific projects. CERs trade at
approximately €0.28 (about $0.33 as of Sept. 30, 2020) per tonne of carbon dioxide equivalent (CO2e) for
each month remaining in 2020 (per Futures Daily Market Report for ECX CER Futures, Sept. 30, 2020).
However, a major LNG industry trade group, the International Group of Liquefied Natural Gas Importers
(GIIGNL), cites the cost as $10 per tonne of CO2e, and some oil and gas companies are quoting
multiples of that price. Such a wide range of quoted prices is ultimately due to a lack of transparency
regarding what an offset represents and how it is achieved; however, this may be resolved with growth in
liquidity in emission reduction credit markets. To be entirely “carbon-neutral” through the entire LNG
value chain, an LNG seller will likely need to both reduce and offset GHGs, which highlights a need for
robust offset markets. The question of which party pays the additional costs to produce Green LNG

2/11
remains to be determined, with some developers expecting a price premium that reflects a differentiated,
ESG-compliant product. In principle, offsets can be purchased at any point in the value chain – by
developers, shippers, marketers or end-users – which adds flexibility to the nascent marketplace for
growth in offset credit market fungibility.

Because the Green LNG market is still in its infancy, there have been a limited number of Green LNG
transactions. But even within this small data set, sellers have taken widely different approaches in terms
of which parts of the LNG value chain they are responsible for, how emissions are quantified, and
whether the “Green LNG” product involves reducing emissions, offsetting them, or both. For example,
one major seller reportedly sold five cargoes of “Carbon-Neutral LNG” in 2019 and 2020. For each cargo,
the seller committed to engage in a transaction to ensure that the amount of CO2 equivalent to that
associated with the full value chain had been removed from the atmosphere through a nature-based
process or emissions saved through avoided deforestation. Another seller used UN-certified emissions
reductions from investments in Indian renewable electricity projects to offset downstream emissions from
use of LNG (but did not include the upstream or transport of the value chain). In contrast, another major
LNG buyer issued a tender requesting that bidders provide an accurate and verifiable GHG footprint of
production, transportation, and delivery of LNG (but not downstream use) and stated that bidders should
aim to reduce GHG emissions in the well-to-discharge terminal supply chain. However, committing to
such reductions was not one of the tender’s express assessment criteria, and there was no obligation that
bidders offer offsets, simply an accounting of the CO2 footprint. Finally, one major supplier of natural gas
and LNG to Europe is offering “carbon management services” to customers, including carbon trading and
carbon offsetting, allowing the customer to decide whether to purchase fully or partially carbon-neutral
natural gas. It is unclear what standards the seller is using and whether such reductions or offsets are
verified.

Another subset of sellers has focused instead on reducing emissions from the LNG liquefaction process
either through use of more efficient liquefaction technology or through capturing and storing carbon. For
example, two LNG sellers offered buyers “reduced-carbon” LNG by reinjecting CO2 into the subsurface
after it had been captured during processing of the feed gas prior to liquefaction. Some other LNG sellers
have teamed up with equipment manufacturers to install more efficient liquefaction technology to reduce
emissions at the LNG liquefaction facility.

These different approaches highlight some key questions relating to quantification of GHG emissions for
LNG facilities that must be resolved if Green LNG is to grow into a recognized and tradeable
commodity. These include, importantly, how far upstream and downstream should an LNG seller be held
responsible in terms of emissions? GIIGNL estimates that approximately 75% of GHG emissions from
LNG are generated by its consumption. Thus, the decision whether to offset downstream emissions,
which are outside the control of many LNG sellers, can materially affect the costs associated with a
Green LNG cargo. Another fundamental question is how parties should measure emissions along the full
value chain as well as how offsets are quantified to the extent that emissions reduction credits are
used. For instance, should they attempt to engage in actual measurement, or instead use widely-
accepted standards? While establishing actual Measurement, Reporting and Verification (MRV)
mechanisms throughout the LNG value chain and/or for offset mechanisms may be a resource-intensive
exercise, using widely-accepted standards may grossly misrepresent the emissions throughout the value
chain or the credits obtained through offsets.

3/11
As LNG sellers are considering how to answer these questions, it is important to remember that for ESG
investors credibility is vital. Measurement and verification of emissions reductions along the LNG value
chain or through various offset mechanisms will likely be heavily scrutinized. This will, in turn, drive a
need for broadly accepted certification programs that can adapt to an evolving marketplace. Such need
could weigh in favor of using offset programs administered or monitored by a governmental authority or
well-established organization.

The LNG and natural gas industry will increasingly face pressure as investors, regulators, and customers
focus on measures to reduce emissions. Green LNG offers an opportunity for the LNG industry to
address these demands and remain competitive. In order for Green LNG to succeed as a tool for
achieving ESG objectives, however, the LNG industry must quickly come together to resolve certain
issues impeding the acceptance of Green LNG as a uniform and tradable commodity, including:

1. Developing and adopting accepted MRV standards to quantify GHG emissions (and reductions)
from each part of the LNG value chain.
2. Determining which part(s) of the value chain each participant should take responsibility for (e.g.,
whether LNG sellers are responsible for upstream and downstream emissions, or just emissions
associated with liquefaction), at least until a fully liquid and transparent market exists enabling
parties to purchase offset certificates for any or all parts of the value chain.
3. Establishing a transparent system for verifying claimed carbon reductions, including potentially the
use of accredited third-party auditors.
4. Agreeing on the form and substance of uniform offset certificates that will convey with the cargo,
and engaging policy-makers so LNG buyers may trade such offsets and use them for compliance as
well as ESG purposes.

The discussions regarding these issues should involve all LNG industry players—sellers, buyers, and
traders—as well as policymakers and representatives from the ESG investing and financing
communities. Failure to address these issues may result in “green” principles being applied in an
ambiguous and inconsistent manner, slowing both the growth of LNG and progress towards achieving
global climate goals. Done properly, however, Green LNG can help ensure that natural gas maintains its
role as a vital part of the energy mix, helping to achieve climate goals while potentially earning a place in
ESG investment and financing portfolios.

Kenneth B. Medlock III, Ph.D., is the James A. Baker, III, and Susan G. Baker Fellow in Energy and
Resource Economics at the Baker Institute and the senior director of the Center for Energy Studies.

Steven R. Miles is a nonresident fellow for the Center for Energy Studies. He also serves as senior
counsel at Baker Botts LLP, where he headed the LNG team for much of his 35 years as a lawyer. In
addition to LNG, his practice focused on natural gas, electric power and renewable energy.

Marcia Hook is a Senior Associate at Baker Botts LLP. She advises clients in transactional and
regulatory matters relating to the energy industry.

Baker Institute

4/11
We explore a variety of global energy issues through its programs in global oil, global natural gas, energy
and cybersecurity, energy and the environment, and electricity

…
Print
Reprints & Permissions

Jul 23, 2021,07:02pm EDT

Almost A Year Later, The Samsung Galaxy Z Fold 2 Is A Proven Foldable

Artifact From Our Imperfect Mobile Future

Dave Johnson
Forbes Staff

Forbes Vetted
Contributor Group
Forbes Vetted
I'm a senior editor at Forbes and I write about all things tech.

All products and services featured are independently selected by Forbes Vetted contributors and editors.
When you make a purchase through links on this page, we may earn a commission. Learn more

The Samsung
Galaxy Z Fold
2 is a dramatic
improvement
over the
original Fold,
but costs
$1,800.
Samsung

In ten years’ time, I’m guessing that flexible displays will be so commonplace that you’ll read a review of
some future Galaxy Fold and not give the underlying conceit a second thought. It’s still 2021, though, and
you can currently count on just one hand the number of phones with fold-up screens. And while we don’t
have a lot to compare the Samsung Galaxy Z Fold 2 to, this latest incarnation is remarkable.

In a nutshell, this is finally a device that’s more than a self-conscious technology demonstrator like the
original Fold; the Galaxy Z Fold 2 redefines what you can do with a phone by leveraging that
revolutionary folding display in novel and unexpected ways. That said, this phone costs a cool $1,800,

5/11
which puts it in the same price range as a high-end laptop. I spent some time with the phone to see if it
was worth the investment.

MORE FROMFORBES VETTED

The 26 Best Places To Shop For Gifts Online

By
Olivia Bowman

Contributor

These 9 Memory Foam Pillows Offer Exceptional Support For All Types Of Sleepers
By
Korin Miller

Contributor

Samsung Galaxy Z Fold 2 In a Nutshell

Pros

Fully usable open or closed

Hinge and screen design seems perfectly rugged for day-to-day use
More than all-day battery life
Flex Mode has a lot of potential

Cons

Thick and heavy

Crazy expensive
Camera isn’t especially impressive
Limited app compatibility with Flex Mode

Samsung Galaxy Z Fold 2 Technical Specifications

Price as tested: $1,799 | OS: Android 10 | CPU: Snapdragon 865 Plus | Main Display: 7.6 inches, 2208
x 1768 pixels @ 120Hz refresh rate | Front Display: 6.2 inches, 2260 x 816 pixels @ 60Hz | Storage:
256GB | Rear Cameras: 12 megapixel wide-angle, 12 megapixel ultra-wide-angle, 12 megapixel 2X
telephoto | Front Camera: 10 megapixel | Battery: 4,500-mAh, approximately 10 hours | Dimensions:
6.2x2.6x0.66 inches (closed), 6.2x 5x0.27 inches (open), 10 ounces

6/11
 Samsung

Samsung Galaxy Z Fold 2

$1200$1800Save $600 (33%)

Samsung Galaxy Z Fold 2 Design

At first glance, the Samsung Galaxy Z Fold 2 is a traditional-looking, albeit very narrow phone with a 6.2-
inch display. The 2260 x 816-pixel display is fully usable on its own; there’s no need to open it up to get to
the main display.

Because the left side is all hinge, you’ll find the power and volume controls on the right. The power button
doubles as a fingerprint reader, and there’s face ID built in as well.

The front
display on the
Galaxy Z Fold
2 is almost
uncomfortably
narrow, but just
wait till you ...
[+]
Forbes/Dave
Johnson

There’s a lot more going on beneath that shiny surface—it unfolds to reveal a much larger display via a
large screen tucked inside. And while Samsung has envisioned the future with this folding display, the
brand’s engineers are still limited by 2021 technology. Eventually, I have little doubt that folding phones
won’t rely on anything so prosaic as mechanical hinges, but for the time being, that’s what we get.

The Fold 2’s hinge design is orders of magnitude better than the one in the original Fold, though—it’s
sturdy and rugged, and after weeks of use, seemingly built to last. That’s not a trivial concern, because
the first Fold was pulled from the market because it broke under the load of a harsh stare. This one stood
up to routine daily abuse and looks robust enough to withstand years of daily use.

It’s worth pointing out that the hinge is a little thicker than the phone itself, so if you look down the edge of
the folded phone, you’ll see an air gap between the two halves where they meet the hinge. It’s inelegant;
an engineering compromise that reminds me of the lens bump on most modern phones. And the Fold 2
has both—a lens bump plus a thick hinge that gives it two different reasons not to lie flat.

7/11
 Seen from the
end, you can
see the hinge
causes a gap
between the
screens.
Forbes/Dave
Johnson

It’s also ludicrously thick; you can’t help but notice this phone when it’s in your pocket. Want a good
simulation of the Fold 2? Take a pair of Samsung Galaxy S21s and band them together, like Sigourney
Weaver duct-taping together M41A pulse rifles during the climax of Aliens. You get used to it, but it’s a
noticeable load in your pocket.

But the real appeal here is what the phone transforms into when you unfold it. There’s a lot of tension in
the hinges, so this won’t happen by accident, nor will it flip open with a flick of the wrist like Captain Kirk’s
communicator. But once unfolded, you’re treated to a generous 7.6-inch screen. Essentially, the phone
transforms into a very small tablet, with a 5:4 aspect ratio—much more square than you’re used to seeing
in a handheld. The 2208 x 1768-pixel display measures about 6.25 inches high by 5 inches wide, and it
seems downright decadent for typical mobile tasks like web browsing, Facebook and email.

The phone is powered by a Snapdragon 865 Plus and comes in just a single configuration with 128GB
RAM and 256GB of internal non-expandable storage (there’s no microSD slot). And of course, the phone
has a standard bulge of lenses in front. You get a normal lens, ultrawide and 2X telephoto, all 12
megapixels. There are two other cameras as well—a 10-megapixel in front plus an identical 10-megapixel
inside, visible when the screen is unfolded. It's all fine, as far as it goes, but there are other Samsung
phones with much more useful camera systems—like the 3x optical zoom in the Galaxy S21 or the 10x
zoom in the S21 Ultra. Even so, the camera takes superb photos, like this one of my puppy.

The Samsung
Galaxy Z Fold
2's telephoto
lens captured
this photo.
Forbes/Dave
Johnson

There are a number of color options available. You can pick bronze or black and can also get the hinge
accented in blue, red, silver and gold.

Unfolding the Samsung Galaxy Z Fold 2

8/11
You can use the phone’s front display in a pinch. Want to check email without opening up the phone?
Need to browse Twitter with just one hand? The front display can get the job done. But in the same way
you wouldn’t want to use a Ferrari to run to the grocery store, you’ll itch to open up the main display for
most things.

The first thing you’ll probably notice—especially if the screen is off or dark—is the pretty obvious crease
that runs through the middle of the display. The good news is, like the ubiquitous camera notch in most
every modern phone, you quickly stop noticing it. That’s especially true when the screen is displaying a
white background, where it’s much less obvious to the point of almost being invisible.

Whatever app you’re running on the front display automatically transfers to the main screen, sort of like
Apple’s continuity feature—just within the same device. The display is a joy to use for everything, from
working in Microsoft Word to watching videos to using Google Maps. The screen is big enough to feel like
you can get real work done, unlike with even oversized phones like the iPhone 12 Pro Max or Samsung
S21 Ultra, both of which sometimes make me feel like I’m working through a straw.

Google Maps
really takes
advantage of
the unfolded
Galaxy Z Fold
2.
Forbes/Dave
Johnson

It’s also big enough to make multitasking practical, and the Fold 2 lets you arrange up to three apps on-
screen at once—side-by-side for two apps, or the screen splits vertically on one side to add a third. Have
two apps you use together a lot? Save them an a pair and open them together with a tap.

And Samsung leverages the folding display for an unexpected new feature. You don’t have to fold the
phone flat; you can partially unfold the phone like a clamshell—this is called Flex Mode.

When in Flex Mode, the phone looks sort of like a miniature laptop, and you can actually use it that way.
I’ve set the phone on my desk and typed in Word, for example. But the real appeal here is that a number
of apps have been optimized for Flex Mode. In apps redesigned for Flex Mode, various features get
automatically reorganized between the top and bottom.

In the Camera app, for example, the top screen is the preview while the bottom shows your recent
snapshot and camera controls. Meanwhile, you can video chat in Duo with the video on top of the screen
and control below, and the phone automatically sits naturally like a laptop, so you’re not constantly trying
to lean the phone against something on your desk to have a conversations hands-free.

9/11
 The Galaxy Z
Fold 2 in Flex
Mode with the
Camera app.
Forbes/Dave
Johnson

The Calendar is another great example of Flex Mode’s potential. In the usual orientation, you can see the
full month view in enough detail that it’s genuinely useful. Turn the phone landscape, and you get an
abstracted version of the calendar and today’s meetings side-by-side. Then Flex Mode the display and
you get the calendar on top and meetings below. Similarly in YouTube, the video plays on top while you
can scroll through comments down below.

But Flex Mode is ultimately a little disappointing. It’s only compatible with a handful of apps. More apps
are sure to come, but for now Flex Mode is like a party that only a few people showed up for. Other
disappointments? The Fold 2 doesn’t work with a stylus, though some rumors suggest that the next Fold
might solve whatever technical problem is keeping Samsung from adding a stylus to folding displays.

Thankfully, Samsung didn’t neglect the basics. Sound quality—both when playing audio through the
phone’s speakers and when making calls—is exactly what you’d expect from a Samsung flagship phone.
And despite the large display, the Fold 2 delivered superb battery life. In routine day-to-day use, it offered
more than all-day performance, and when I clocked the battery, it ran for more than 12 hours with a mix of
productivity, browsing and video watching.

Final Thoughts on the Samsung Galaxy Z Fold 2

Even if you absolutely love the Samsung Galaxy Z Fold 2, it’s impossible to ignore the astronomical price
tag. The phone debuted at $2000 but currently lists for $1800—as much as you might spend on a high-
end laptop. That’s a substantial investment for a phone that’s likely to be replaced later this year by a Fold
3. And foldable phones are evolving rapidly, so I suspect there will be a ton of improvements in how
foldable devices work in the span of just a few years. If you get the Fold 2—or even the Fold 3—I worry
you’re signing on for buyer’s remorse as soon as the next model appears.

10/11
 The Galaxy Z
Fold 2 is
among the
priciest
smartphones
you can buy.
But the screen
folds.
Forbes/Dave
Johnson

And the device itself is a study in compromises. I don’t care for how thick this phone is or the way the
hinge struggles to fit in the phone’s existing form factor. And right now, far too few apps take advantage of
the phone’s unique characteristics like Flex Mode.

All that said, this is an impressive phone that makes a bold statement. It’s a joy to use; it has snappy
performance, a bright, high-performance screen, and when used with the right apps, Flex Mode certainly
has its moments. You can’t really accuse the design of feeling like a prototype, either. It switches
seamlessly from the front screen to the main, and from flat to Flex, and every mode feels like it has been
thought through to work elegantly as a whole. If you have the money and go in fully aware that the next
model may make this one look like a prototype, then I can’t think of a better premium phone to slip into
your pocket.

Follow me on Twitter. Check out my website. Send me a secure tip.

Dave Johnson
I’m a senior editor at Forbes and though I started out in New Jersey, I am currently living in Los Angeles.
After college, I served in the Air Force where I operated

…
Print
Reprints & Permissions

We’d like to send you notifications.

To get the latest from Forbes select “Sign up” and then “Allow”

11/11