The colonial exploitation of Africa’s fossil fuels must end
African and European governments are jointly targeting substantial new gas extraction, and the climate injustice being lined up for the continent’s communities can best be described as ecocide and intergenerational crime, writes Nnimmo Bassey in Context.
Some calm before another price storm
Still roughly six times higher than pre-pandemic levels, gas prices in Europe have recently fallen to their lowest level since July, yet a range of headwinds are gathering, writes Charles Ellinas in the Financial Mirror.
Persian Gulf autocracies are becoming indispensable for Europe’s energy supply
The vast oil, gas, and projected hydrogen riches of the Gulf states mean that so-called values-based foreign policies are set to fray further, with German equipment and engineering firms already well established in the region, writes a team of Spiegel reporters.
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Indigenous delegation challenges bankers over proposed U.S. fracked gas infrastructure
“I had to give a fracking 101 lesson to this bank official. It’s appalling their level of ignorance. They really do not know how potentially permanently destructive fracking is to groundwater.” This was the report back from Christopher Basaldú, a member of the Carrizo Comecrudo Tribe of Texas, following an Indigenous delegation’s meeting with executives from HSBC, Barclays, and Credit Suisse aimed at persuading them to stop backing oil and gas pipelines and fracked gas export terminals in the U.S. The three Europe-headquartered banks are thought to be prime movers among the institutions that are on the verge of providing billions of dollars in financial support to the highly controversial US$15 billion Rio Grande LNG terminal in Brownsville, Texas that Indigenous and Latinx communities have resisted for the last five years. (Desmog)
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Pakistan to cut gas supply to domestic consumers for 16 hours per day this winter: In a deepening energy crisis for the world’s fifth most populous nation, hit by sky-high prices for LNG imports that it can no longer afford, extreme gas rationing measures are to be rolled out across Pakistan. According to an official from the petroleum ministry, every effort will be made this winter to ensure households have gas available for three hours in the morning, two hours in the afternoon, and three hours in the evening. Related LNG supply difficulties for the developing world, linked to Europe’s energy crunch, are also affecting India. Since May, GAIL India has had 17 contracted LNG import cargoes canceled by the German state-backed company Securing Energy for Europe, which claims it has been unable to source LNG from Russia as a result of sanctions imposed on it by Moscow. (Dawn, Bloomberg)
Crackdown on methane emissions progresses amid gassy COP27: In spite of the unprecedented stampede of oil and gas officials and lobbyists to this year’s climate negotiations in Sharm El-Sheikh, some progress has been made on efforts to cut the industry’s methane emissions. U.S. president Joe Biden announced new U.S. Environmental Protection Agency regulations – to be finalized next year – for the country’s oil and gas sector designed to reduce the industry’s emissions by an estimated 87 percent from 2005 levels by 2030. The U.S. also joined with the EU, Japan, Canada, Norway, and the UK in making a new commitment (non-binding) to minimize flaring and methane emissions across the fossil fuel sector. (Gas Outlook, The Guardian, U.S. Department of State)
TotalEnergies and French finance are driving oil and gas expansion in Africa: New research released at COP27 by the German environmental group urgewald and partner organizations spotlights the banks and investors supporting 200 companies that are exploring/developing new fossil fuel reserves or developing new LNG terminals, pipelines or gas- and coal-fired power plants in Africa. With TotalEnergies identified as the top – by some distance – upstream oil and gas developer, and also heavily involved in some of the continent’s most controversial projects under development, the research reveals that French finance players are leading the way with their support for African oil and gas expansion. Asset manager Amundi is a prominent investor, while four banks – BNP Paribas, Societe Generale, Credit Agricole and Groupe BPCE – have allocated US$12.8 billion to oil and gas expansion in Africa since 2019. (urgewald [Pdf])
Ongoing CCS failure no deterrent to Chevron’s hopes to make Australia the carbon sink of Asia: Despite the embarrassing failure of its six-year – and US$2 billion – carbon capture and storage project at the Gorgon LNG Terminal off the west coast of Australia, Chevron together with Japan’s Mitsui O.S.K. Lines is reported to be embarking on a project to bring liquid CO2 from Singapore to permanent storage locations in offshore Australia before 2030. Meanwhile, the Gorgon CCS project, the world’s biggest, is operating at only one-third capacity after six years of operations. Chevron’s latest environmental performance report for Gorgon records that for the 12 months to June 2022, 1.6 million tonnes of reservoir CO2 was injected underground, while 3.4 million tonnes was vented into the atmosphere. (The Australian Financial Review, The Sydney Morning Herald)
Mounting LNG shipping threat to fin whales off the west coast of Canada: Concerns are growing about the potential impacts to a unique population of fin whales in fjords off the coast off British Columbia from the heavy shipping traffic set to start up in three years’ time once the mammoth LNG Canada export terminal starts operations. While the company insists that special measures will be in place during peak whale seasons to reduce impacts, it’s expected that an additional 700 LNG shipping transits will start up through channels favored by fin whales. Fueling these concerns is the prospect of the status of fin whales being downgraded by Canadian authorities from “threatened species” to “species of special concern”. Maintaining the whale’s protection status, say conservationists, could allow for a reduction of shipping from July to September when their activity in the adjacent waters is at its highest. (Canada’s National Observer)
Loyalty to gas funders rather than the data at top U.S. universities: A new study published in the scientific journal Nature, based on machine learning analysis of 1,706 research reports from 26 energy research centers at universities based in the U.S., UK, and Canada, has found that reports from Columbia, MIT, and Stanford – three prominently fossil fuel-funded U.S. centers – were “more favorable” toward natural gas than renewable energy. According to the study, the positive sentiment towards gas evidenced in content from these three centers between 2009 and 2020 was “indistinguishable” from content produced by industry groups the American Gas Foundation and the American Gas Association. (Gizmodo)
“Germany needs to tap about 3 per cent of the world’s annual LNG production to fill up its new terminals. One way is through savage capitalism. Most LNG contracts are long-term but suppliers may not comply with the terms, pay a penalty for breach of contract, and sell the LNG to the highest bidder. German industry is able to bid high. Trafigura and Glencore, which trade about 6 per cent of all LNG worldwide, are very opportunistic. And Germany only needs half of the LNG they trade,”
said Rui Soares, of investment firm FAM Frankfurt Asset Management, on where new gas supplies could come from.
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Canada: Three major energy services companies have formed a partnership with the Haisla First Nation to target opportunities linked to emerging LNG projects in British Columbia, including the under-construction LNG Canada export terminal.
Egypt: Part of a US$500 million finance package approved by the U.S., Germany and the EU will allow Egypt to close down inefficient gas power plants and free up over two billion cubic meters of gas for eventual export to Europe.
Germany: Amid concerns over potential chemical pollution in the North Sea once operations begin, construction of the pier, pipelines, and electricity lines has been completed for Germany’s first floating LNG terminal at Wilhelmshaven.
Greece: New exploratory oil and gas drilling at sites off the coast of northern Greece is to get underway within the next few months.
Israel: Following the signing of a widely hailed framework deal with the EU and Egypt in June to boost gas supplies to Europe, Ministry of Energy chief Lior Schillat has said it will take three to four years before the start of significant new export flows.
India: State-owned Petronet LNG has approved a new floating four million tonnes per year (mtpa) LNG import terminal to be located at Gopalpur Port in the eastern state of Odisha.
Japan: The country is the world’s leading public financier of gas infrastructure globally, according to new data from Oil Change International, and has spent an average US$6.7 billion on gas projects each year between 2019 and 2021.
Malaysia: Already under force majeure since September following a leak, an explosion (video) at Petronas’ 512-kilometer Sabah-Sarawak gas pipeline has caused one fatality and injuries to one other person.
Russia: Significant corporate tax hikes have been slapped on oil and gas companies, including Gazprom, in a move interpreted as a way of paying for the war in Ukraine.
Turkey: President Tayyip Erdogan has said that the Sakarya gas field in the Black Sea, with estimated volumes of 540 billion cubic meters, will come online next year as scheduled.
U.S.: The Deep South Center for Environmental Justice, Sierra Club and Healthy Gulf have sued the Louisiana Department of Natural Resources for exempting Venture Global LNG from needing an environmental permit to build an LNG terminal.
U.S.: Rystad Energy is forecasting that flaring in the Permian Basin is set to rise, potentially to 3% of total production, due to a lack of pipeline capacity to ship the gas.
U.S.: A group of 45 scientists, including some who formerly worked at the Environmental Protection Agency, have urged North Carolina regulators not to approve Duke Energy's plan to build more gas-fired power plants.
The gas graph
(Via Oil Change International’s Investing in Disaster briefing – the new oil and gas expansion approved in 2022 alone could lock in 11 billion tonnes of new carbon pollution, the equivalent of building 75 new coal power plants)
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Freeport terminal’s restart likely delayed to January: Details have emerged in an investigative report that the June explosion at the Texas-based terminal was partly caused by employee fatigue from understaffing. Despite Freeport LNG officials remaining tight-lipped about its restart timeline, industry observers believe that it is highly unlikely that the terminal, which accounts for 20% of the U.S.’s total LNG export capacity, will be able to recommence operations before January. As of November 16, the company appeared not to have submitted a restart plan to federal safety regulators. “Freeport was clearly putting profits ahead of safety by keeping a plant running at full steam when its staff was worn thin due to overwork,” said Clark Williams-Derry at the Institute for Energy Economics and Financial Analysis. “LNG is explosive, and safety can’t be an afterthought.” (E&E News, Energy Intelligence, Reuters)
India’s plans for a gas revolution: The country’s heavy reliance on coal power is, according to boosterish government policy announcements, about to be replaced by a turn towards gas, which could see US$40 billion invested in pipelines, LNG terminals, city gas distribution networks, and gas extraction projects by 2026. Gas is to be fully embraced as a transition fuel between now and 2070, by when India intends to be hitting net-zero emissions through the realization of its vast renewable energy potential. Russian gas supplies, now being heavily diverted from Europe, are thought to be essential if these ambitions are to be fulfilled. (Fortune India)
More EU cash for gas in the Western Balkans: European Commission president Ursula von der Leyen has pledged an energy support package of €1 billion (US$1 billion) in grants, some of which is aimed at developing new gas infrastructure, to the EU’s six Western Balkans partners Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia. An initial €500 million will be made available in January to assist households and small businesses dealing with high energy prices, with a further €500 million over the next three years earmarked for a range of energy measures, including support for gas interconnectors and LNG. (CEENERGYNEWS)
New database exposes the penetration of fossil fuel lobbyists across the U.S.’s non-fossil fuel economy: Global Energy Monitor’s Fossil Fuel Lobbyist List identifies more than 1,500 multi-client lobbyists for more than 600 fossil fuel companies engaged in upstream and midstream coal, oil, and gas operations, and the more than 14,000 non-fossil fuel clients based in the U.S. whom these lobbyists also represent. Tagging these lobbyists' other, non-fossil fuel clients by sector, the database drills down on thousands of companies and organizations for whom employing these lobbyists is radically at odds with their own climate and economic interests. Accompanying analysis spotlights the U.S. banks, insurance, and tech companies that rely on scores of these lobbyists across American states. (Fossil Fuel Lobbyist List, Global Energy Monitor [Pdf])
Keep your eye on large LNG portfolio players as limited supply, more volatile price conditions are set to continue: Weak global LNG supply-side production, with new supply in 2023 and 2024 also “very limited,” has been relatively overlooked, according to Timera Energy, due to Europe’s import-at-all-costs agenda that has landed roughly 137 bcm of LNG from January to October this year, a 40% year-on-year rise. “Limited new liquefaction capacity until 2025 combined with a leap in European demand support the continuation of the current regime of higher and more volatile prices across the next 2 to 3 years,” the gas consultancy predicts. Under these conditions, including LNG buyers’ adversity to exposing themselves to long-term supply contracts, how will global LNG demand evolve before 2025-2026 and the expected switching on of new Qatari and U.S. supply? For Timera, the contracting and investment activity –and flexibility – of portfolio players such as Shell, BP, and Total, and the large traders Gunvor, Vitol, and Trafigura, will be crucial. (Timera Energy)
Hydrogen hub plans may be Trojan Horse for US$39 billion Alaska LNG project: Following recent renewed efforts from the Biden administration, including the U.S. ambassador to Japan, Rahm Emanuel, to move the massive 20 mtpa Alaska LNG project forward towards sanctioning, the company behind the project is seeking up to US$850 million in federal funding to contribute to an Alaskan hydrogen hub that it claims would enable the export terminal to send low-carbon energy to Asia. The Alaska Gasline Development Corporation has said that hydrogen produced from Alaskan North Slope gas and carbon sequestration could be sent out from Alaska LNG to supply U.S. and Asian firms. (Natural Gas Intelligence, E&E News)
“In Europe, banks lobby against cutting fossil fuel exposures more quietly and behind closed doors. Financial institutions in the US are more emboldened to argue that going ‘too far’ on the environment would be a bad thing. There’s a consensus that you can’t say these things publicly as a CEO in Europe. That doesn’t mean their interests and business models are so different that they don’t have common interests,”
said James Vaccaro, executive director of the Climate Safe Lending Network, on how the energy crisis is tempting European banks to undermine their sustainability ambitions by supporting even more oil and gas expansion.
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Transition state of play – Germany in the grip of the energy crisis, Clean Energy Wire.
This online tracker provides rolling coverage and analysis of the crisis response from Europe’s biggest economy, including how Germany’s massive new embrace of LNG is impacting the planned shift to climate neutrality.
U.S. Oil and Gas Methane Emissions Science Tracker, Climate Nexus, November 11, 2022.
With methane pollution by the U.S. oil and gas industry at least twice as bad as official estimates from the Environmental Protection Agency, this interactive database tracks and summarizes the relevance of over 50 scientific studies documenting methane emissions from the U.S. oil and gas sector.
EIB backtracks on path to becoming climate bank, Fossil Free EIB campaign, November 14, 2022.
This five-page briefing lays out how, with the suspension of its PATH framework until 2027, the European Investment Bank is relaxing its climate criteria for companies it can choose to financially support, making it easier for major fossil fuel polluters to access EIB funds.
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