The World Economic Forum (WEF) Annual Meeting in 2025 in Davos, Switzerland, brought together leading experts to discuss the economic, energy security, and climate implications of liquefied natural gas (LNG). This topic is timely and crucial, as LNG is often portrayed as a transitional fuel in the global shift toward cleaner energy sources.
Economic Risks of LNG
LNG vs. Renewable Energy Costs
Sam Reynolds, the LNG/Gas Research Lead for Asia at the Institute for Energy Economics and Financial Analysis (IEEFA), highlighted the economic risks associated with continued reliance on LNG. He contended that LNG is not a cost-effective alternative to renewable energy, opposing the prevailing industry claims. Despite assertions that LNG is both clean and reliable, the financial burden it imposes on consumers and economies tells a different story. Reynolds pointed out that major LNG markets such as Europe, Japan, and South Korea are actively decreasing their reliance on LNG. The industry, in response, has targeted emerging market buyers under the false pretext of LNG’s supposed economic and environmental benefits.
Reynolds countered this notion with cost estimates, showing that in regions such as Cambodia, the revenue equations tilt overwhelmingly in favor of renewables. Specifically, electricity generation through LNG can be up to five times costlier than its renewable counterparts. Furthermore, LNG’s claimed reliability diminishes under the scrutiny of geopolitical uncertainty and climate-related disruptions. The reliability concern is particularly pronounced in floating LNG import terminals, which often struggle in adverse weather conditions. This vulnerability poses serious questions about LNG’s long-term feasibility as a transitional fuel.
Environmental Impact of LNG
Methane Emissions and Climate Footprint
Dr. Robert Howarth, a biogeochemist and environmental scientist at Cornell University, stressed the severe environmental impact of LNG. He drew attention to the fact that LNG has the largest climate footprint among fossil fuels, surpassing even coal in its environmental detriments. Methane, the fundamental component of natural gas, is a potent greenhouse gas. Howarth explained that methane emissions from LNG contribute significantly to global warming, as methane is approximately 80 times more powerful than carbon dioxide over a 20-year period. This stark statistic underscores the immediate and devastating impact of LNG on the climate.
The environmental critique doesn’t only concern the actual use of LNG but extends to its entire lifecycle, including production and transportation phases. Dr. Howarth emphasized that even minor leaks during these stages release substantial amounts of methane into the atmosphere. These leaks, though seemingly minor, collectively have an outsized impact on the climate, essentially negating any potential benefits LNG might offer as a transitional fuel. The environmental argument against LNG is, therefore, robust and rooted in verifiable scientific data.
Production and Transportation Leaks
Leakages during the production and transportation of LNG present a significant environmental risk. Howarth emphasized that the seemingly minor leaks during LNG’s lifecycle can severely exacerbate global warming. Due to methane’s high potency as a greenhouse gas, even small leaks can offset any perceived environmental benefits. Methane leaks during the extraction, liquefaction, and transportation stages hail from various mechanisms, including equipment malfunctions and insufficient mitigation measures, leading to unintentional but impactful emissions.
Addressing these leaks is not straightforward, often requiring comprehensive infrastructure overhauls, significantly increasing costs. Even with state-of-the-art technology, eliminating all leakages remains an elusive goal. As a result, the environmental argument against LNG stands strong, rooted in the realities of its ample lifecycle emissions. Given that these emissions are largely unavoidable with current technology, the climate argument against LNG leads to a clear, data-driven conclusion: transitioning to truly clean and renewable energy sources must be the priority.
Health Implications of Fossil Fuels
Air Pollution and Mortality Rates
Prof. Tan Sri Dr. Jemilah Mahmood from Sunway Centre for Planetary Health spotlighted the grave health implications resulting from LNG and broader fossil fuel usage. She highlighted that air pollution from these fuels annually leads to approximately eight million deaths worldwide, with staggering economic losses amounting to $8.1 trillion per year. Prof. Mahmood’s revelations underscore the extensive health risks fossil fuels pose, resulting in millions of premature deaths and imposing a significant burden on healthcare systems globally. Fossil fuel combustion releases harmful pollutants, which are directly linked to respiratory and cardiovascular diseases, among other severe health impacts.
The steep human cost is mirrored by the economic toll, as healthcare expenditures escalate alongside productivity losses from illness and premature death. Air pollution remains a primary driver of these costs, with fossil fuels being a prominent source of pollutants like particulate matter (PM2.5) and nitrogen oxides (NOx). These insights provided by Dr. Mahmood put a human face on the fossil fuel debate, emphasizing the urgent need to factor in public health when considering energy policies.
Benefits of Renewable Energy
Transitioning to renewable energy presents clear health and economic benefits, as advocated by Prof. Mahmood. By moving to cleaner energy sources, air pollution levels can be dramatically reduced, leading to fewer health issues related to poor air quality. This shift would not only save lives but also significantly reduce the economic strain caused by healthcare costs associated with fossil fuel-induced diseases. Renewable energy technologies, such as wind, solar, and hydroelectric power, do not emit harmful pollutants, offering a far healthier alternative.
Renewables’ positive impact extends to economic stability as well. Lower healthcare costs and fewer productivity losses translate to more robust economies. Additionally, renewable energy industries create new job opportunities, fostering economic growth and stability. Prof. Mahmood’s advocacy for renewables is backed by a compelling combination of health and economic benefits, positioning them as a strategic choice for both public health and economic sustainability. The switch to renewables emerges as a win-win solution, addressing the core issues posed by fossil fuel reliance effectively.
Misleading Narratives by the Fossil Fuel Sector
Industry Claims and Reality
Vivek Parekh of InfluenceMap delved into how the fossil fuel sector shapes climate policy and spreads misleading narratives about LNG. The industry frequently claims that LNG is a climate solution, ensures energy security, and drives job creation and economic growth. However, these assertions do not hold up under scrutiny. According to Parekh, findings from the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) challenge the authenticity of these claims. The fossil fuel sector’s portrayal of LNG as an energy panacea masks its underlying environmental and economic drawbacks.
In reality, the reports highlight that methane emissions from LNG are often underreported and contribute significantly to climate change. Furthermore, reliance on LNG does not enhance energy security but exacerbates climate impacts, which in the long term undermine stability. Additionally, the promised economic benefits in terms of job creation and economic growth are inconsistent, particularly as the global energy transition progresses. The declining revenues from fossil fuels in developing countries further highlight the urgent need to reevaluate LNG’s purported advantages.
Debunking LNG Myths
Parekh outlined how industry myths about LNG fall apart under empirical investigation. He explained that methane emissions from LNG, often glossed over, are a critical flaw, damaging the environment more than acknowledged. This environmental harm undermines any claims of LNG being a climate solution. Furthermore, LNG’s role in ensuring energy security is overplayed. The inherent volatility in global politics and weather conditions makes LNG a less reliable energy source. As the global shift to renewable energy continues, fossil fuel revenue projections plummet, especially in developing nations.
This evolving energy landscape invalidates the argument that LNG promotes economic growth and job creation. Instead, investments in renewable energy promise a more sustainable economic future, fostering job creation and long-term economic benefits without compromising environmental integrity. Debunking these myths is vital for steering the global energy discourse toward sustainable alternatives, as Parekh’s analysis shows.
The Urgency of Transitioning to Renewable Energy
The Transition Moment
Climate activist and author Luisa Neubauer illustrated the critical transition moment the world faces, nearing a comprehensive adoption of renewable energy. Neubauer warned against the fossil fuel industry’s attempts to rebrand LNG as a clean fuel, coining this deceptive practice as “greenwashing.” She emphasized the misleading nature of marketing LNG under the pretense that it is a viable transitional or bridge technology. Neubauer’s insights call for a sober reassessment of the financial, economic, and climate data to demystify LNG’s purported advantages.
The need for an immediate shift to renewable energy sources is underscored by the manifold risks associated with continued LNG reliance. As Neubauer articulated, the world stands at a pivotal moment. Deciding to invest in renewables over fossil fuels is no longer a mere option but a necessity for sustainable development. The global community must embrace renewable energy fully to ensure a secure and stable future.
The Path Forward
The World Economic Forum (WEF) Annual Meeting in Davos, Switzerland, in 2025 convened top experts to delve into the economic, energy security, and climate ramifications associated with liquefied natural gas (LNG). This discussion is both timely and essential, considering LNG’s role as a bridge fuel, facilitating the transition from traditional fossil fuels to cleaner, more renewable energy sources.
LNG has been heralded as a crucial component in the global strategy to reduce carbon emissions while ensuring energy reliability. However, its use presents a complex web of advantages and challenges. While LNG burns cleaner than coal and oil, contributing to lower immediate emissions, it still remains a fossil fuel, capable of contributing to long-term environmental impacts if not managed properly.
These experts examined the dual nature of LNG: its potential to aid in immediate emissions reductions and energy security, and the broader implications for climate goals. The discussions aimed to balance these factors, highlighting the need for continued innovation and policy support to ensure that the transition does not become an end in itself but a step forward toward a sustainable energy future.