“The golden age of gas is approaching the end” – IEA executive director Fatih Birol: In this year’s World Energy Outlook (WEO), the International Energy Agency broadly maintained its outlook from last year that, to restrict the global temperature rise to 1.5ºC, there is no room for new oil and gas beyond existing fields. The WEO bluntly states, “No one should imagine that Russia’s invasion can justify a wave of new oil and gas infrastructure in a world that wants to reach net zero emissions by 2050.” The IEA estimates that under current government policies global demand for gas “soon peaks” and by 2030 will be 10 percent lower than 2021 levels. In its Net Zero Emissions by 2050 scenario, it expects demand to fall by 20 percent by 2030, and to be 75 percent lower than today by 2050. “For the first time, all scenarios within the WEO now show a peak or plateau for all fossil fuels,” commented Carbon Tracker founder Mark Campanale. “The writing is on the wall for investors, and there is no longer any doubt about the long-term prospects for fossil fuel production businesses, including new gas.” (International Energy Agency, The Guardian, Carbon Tracker)

U.S. LNG terminal explosion was avoidable: An in-house investigation report, obtained under the Texas Public Information Act, into the June 8 explosion at the Freeport LNG export terminal has confirmed that a defective pipe had been identified at least two days prior to it exploding, yet no shutdown action was taken. Local investigators in Brazoria County have concluded that the non-fatal blast, which has kept the 15 million tonnes per annum (mtpa) terminal closed for months, was accidental and likely caused by human error, though concerns have been raised over Freeport LNG’s reluctance to fully disclose information about the accident to the public. The company has said that it is aiming for an 85% restart of its processing capacity by mid-November but first requires regulatory approval. Following discussions with Freeport on October 27, the U.S. Federal Energy Regulatory Commission disclosed that the company had not provided sufficient information to allow for a restart. (E&E News, Reuters)

Huge climate and financial costs attached to Europe’s turn to U.S. LNG: Analysis from Food & Water Action Europe has put a carbon emissions and cash price tag on the EU’s drive to increase U.S. LNG imports by an extra 15 billion cubic meters (bcm) in 2022, already on course to be surpassed, and 50 bcm annually thereafter until at least 2030. Using methane’s 20-year global warming potential, the environmental NGO calculates that the lifecycle footprint of 50 bcm of LNG is nearly 400 million metric tons of CO2-equivalent, or roughly the same as the annual emissions from 100 coal plants. On the costs of these imports, and based on current prices, which are expected to remain elevated and volatile, the analysis estimates that 50 bcm per year through to 2025 would entail at least €64 billion (US$63 billion) overall, with an additional €23 billion required for projected new infrastructure costs. (Food & Water Action Europe)

Rystad – high prices and low cost renewables spell doom for Europe’s gas power fleet: New analysis from Rystad Energy using the levelized cost of energy (LCOE) for gas and coal-fired power generation at different price levels, and comparing it to the LCOE of solar and wind, shows that with recent gas prices it would be ten times more expensive to operate gas-fired power plants in the long term than to build new solar capacity in Europe. While the research company foresees a long-term backup role for gas plants in Europe’s power mix, it points out that cost disadvantages on top of highly uncertain future gas supply scenarios make an unignorable economic case for power companies “to rethink their strategies and fast-track the development of renewable energy and storage capacity.” (Rystad Energy)

Local opposition continues as floating terminal in Tuscany gets green light: The fast-track approach to floating storage and regasification unit (FSRU) project approval witnessed in several German port towns this year has been mirrored by the authorities in the Italian region of Tuscany, with gas grid operator Snam now aiming to have its 5 bcm capacity FSRU in Piombino operational by spring next year. Despite various conditions and financial compensation attached to the project, Piombino’s mayor Francesco Ferrari has said he intends to challenge the approval in court. Other organized local opposition persists in Piombino with efforts underway to coordinate with groups resisting new gas developments in Ravenna, Brindisi, Sardinia, and Sicily. (Reuters, Bloomberg, Ravennanotizie.it [Italian])

U.S. oil and gas industry doing the most to undermine climate policy action: New rankings from InfluenceMap show U.S.-based fossil fuel companies and their associated trade groups to be the world’s most obstructive organizations when it comes to engagement on climate policy, which the think tank attributes in part to their efforts to capitalize on the Ukraine invasion by pushing for oil and gas expansion. Leading the way are Chevron and ExxonMobil, ranked first and second respectively. In third place, up from sixth last year, is German chemicals giant BASF, reflecting its active lobbying to expand oil and fossil gas production and infrastructure. The annual rankings are based on an assessment of each company’s lobbying activity (including via trade groups) and the intensity of that engagement, which is then adjusted to take into account each organization’s economic and political clout. According to InfluenceMap, the research demonstrates the importance of policy engagement when considering corporate climate performance and highlights the gaps with mainstream corporate climate targets (such as net-zero commitments), indicators, and metrics. (InfluenceMap)

The Gas Graph


(Via the International Energy Agency’s WEO 2022 – the global trade in gas may reach US$800 billion this year principally due to Europe’s enduring energy crisis and gas dependency)

Austria: Chancellor Karl Nehammer has secured a deal with the United Arab Emirates to receive 0.1 bcm of LNG to cover approximately 1% of Austria’s total gas consumption.

Ecuador: The state-owned oil company Petroecuador has said that it expects to imminently award a contract to expand production in the Amistad offshore gas field to 100 million cubic feet per day (mmcfd) from the current 24 mmcfd.

Israel: London-listed Energean has delivered first gas from the offshore Karish field following years of preparation, planning, and controversy.

Libya: Eni and BP have finalized a deal with Libya’s National Oil Company to start extracting gas from a Mediterranean gas field believed to be bigger than Egypt’s huge Zohr field; Eni is also set to invest US$8 billion to develop natural gas fields in western Libya.

Kenya/Tanzania: Without setting out timelines, the respective governments have agreed to fast-track plans to construct a cross-border US$1.1 billion gas pipeline which they intend to be a public-private partnership.

Mauritania: BP and Kosmos Energy have signed a new production sharing contract with Mauritania, with a final investment decision targeted for early 2025, for the BirAllah gas field that could feed the Greater Tortue Ahmeyim floating LNG project.

Mozambique: The 3.4 mtpa floating Coral South LNG terminal led by Eni and ExxonMobil has started production, with the first cargoes expected to be shipped soon.

Poland: The state-owned oil and gas company PGNiG has discovered two new onshore gas sources with a total volume of approximately 600 million cubic meters.

Romania: Coal and power group Complexul Energetic Oltenia is moving forward with plans to build and start operating an 850 megawatt gas power plant in Işalniţa by 2026.

Romania: Romgaz and Azerbaijan’s Socar have agreed to explore the technical, financial, and commercial feasibility of developing an LNG project in the Black Sea to enable the transport of Caspian gas to Romania.  

Russia: The first train of the major Arctic 2 LNG project is on track to start production in 2023, according to a senior official of the Japanese trading house Mitsui, which owns a 5% stake in the project.

Somalia: US-based Coastline Exploration has secured a green light from the Federal Government of Somalia for exploration work covering seven offshore deepwater blocks.

Tanzania: South Africa’s Standard Bank has claimed in a study that the proposed US$30 billion Tanzania LNG Terminal could, if realized, contribute US$7-15 billion per year to the nation’s coffers.

U.S.: The Mountain Valley Pipeline is facing another setback after a federal judge questioned whether West Virginia regulators had adequately addressed water concerns in issuing a permit for the US$6.6 billion project. 

U.S.: The Biden administration has been signaling its support for the massive 20 mtpa Alaska LNG export terminal, a highly controversial project which has struggled to secure financing in recent years. 

Singaporean lender becomes first major bank in Asia to scrap loans for new upstream oil and gas projects: United Overseas Bank (UOB), southeast Asia’s third largest bank, has announced that it will no longer provide loans to upstream oil and gas projects approved for development after 2022 as part of its long-term ambitions for net-zero emissions. While UOB’s loans to the sector make up just four percent of its total loan book, the bank’s chief sustainability officer, Eric Lim, said that in spite of research showing wide variance in net-zero aligned pathways for oil and gas, UOB was heeding calls from the UN’s Intergovernmental Panel on Climate Change and the IEA for the world to now end the development of new fossil fuel resources. (Eco-Business)

Russia-backed Turkish gas hub plan provokes backlash: A plan to make Turkey a hub for delivering Russian gas supplies to the EU, hatched in mid-October between Russian President Vladimir Putin and his Turkish counterpart Tayyip Erdogan, has been received negatively by the U.S. and France. In a rebuke to the proposal, a State Department spokesperson said that Washington was “working with [Turkey] closely to assist in their own efforts to enhance energy security in the long term,” while French President Emmanuel Macron said the proposal “makes no sense” given Europe’s stated intention to give up Russian gas. The establishment of a gas distribution center in Thrace would see Turkey taking over from Germany as the key gas node in Europe, thereby enhancing Erdogan’s geo-political influence in the region. In what is likely to be protracted tit-for-tat over the plan, Putin outlined his wager at the end of October: “This is a quite realistic project and we can do it fairly quickly, and there will be enough people who want to conclude a contract ... I have no doubt that in Europe there are many who want to.” (Middle East Eye, EurActiv, Reuters)

Top French bank faces climate lawsuit over fossil fuel financing: A coalition of climate NGOs, comprising Oxfam France, Friends of the Earth France, and Notre Affaire à Tous, are threatening to take legal action against French lender BNP Paribas if it does not take immediate steps to stop harming the climate through its financing of oil and gas expansion. The groups have given the bank three months to comply with France’s duty of vigilance law, after which time a lawsuit will be filed in what would be the first climate litigation in the world to hold a commercial bank to account for its legal obligations. While BNP Paribas, the top European financier of fossil fuel expansion, mulls its options, Lloyds Banking Group (LBG) became the first UK bank to commit to not directly finance new oil and gas fields. While LBG has not ruled out corporate level support for oil and gas companies, it will no longer support “Direct financing (either via project finance, or reserve-based lending) of new greenfield oil and gas developments (fields which did not receive Oil & Gas Authority approval before the end of 2021).” (Friends of the Earth France, Friends of the Earth France [Media briefing], Lloyds Banking Group)

U.S. company deepens its involvement in Mexican projects: State-owned energy company Pemex has received the go-ahead from Mexico’s regulator to proceed with development of the deepwater Lakach gas field in the Gulf of Mexico. An investment decision on the field, which holds up to 937 billion cubic feet of reserves, had been delayed since 2016 but will now proceed at a cost of US$1.79 billion in a long-term partnership between U.S. LNG company New Fortress Energy (NFE) and Pemex. NFE has also announced the finalization of several previously announced gas deals as part of a “growing strategic alliance” with Mexico. Among these is the development of a new floating LNG hub off the coast of Altamir, with NFE set to deploy the first of potentially multiple FLNG units of 1.4 mtpa in the first half of 2023. (Reuters, New Fortress Energy)

EBRD sticks its head in the sand on oil and gas: Ahead of a review of its energy sector strategy next year, the European Bank for Reconstruction and Development’s director for Green Energy and Climate Action, Harry Boyd-Carpenter, has ruled out the multilateral lender divesting from its existing upstream oil and gas loans, although no new loans for the sector appears to still be the bank’s plan. The EBRD is also under pressure to commit to no new loans for midstream and downstream projects. Addressing an online briefing of journalists, Boyd-Carpenter appeared to be getting his excuses in early while also neglecting the viability of renewables investments, stating, “Some of the countries we operate in see gas as part of their energy security. Right now there is an energy crisis and would it be the right thing to do to walk away from them and prolong dependency on coal for longer?” (Reuters)  

Caribbean LNG hub targets start up by 2025: One of the only Latin American exporters of LNG along with Peru, Trinidad and Tobago is now aiming to add to its existing international customer base with a small-scale LNG hub geared to exporting to Caribbean neighbors for power generation and petrochemicals. The state-owned National Gas Company says it has started design work on the hub, which it expects to be operational by 2025 with capacity of up to 500,000 tonnes of LNG per year, to be sourced from the Atlantic terminal, which has been operational for more than 20 years. New-build regasification terminals are expected to be needed at some of the neighboring destinations. (Reuters, GEM.wiki) 

Vaca Muerta Basin: An oil and gas trap, Profundo, 350.org, October 13, 2022. (Pdf, press release here) 

This 32-page report reveals how the exploitation of Vaca Muerta’s oil and gas reserves risks worsening Argentina’s economic and fiscal crisis, and calculates that the hidden costs (including stranded assets and public health impacts) involved in developing the basin could exceed US$5.6 trillion.

Rio Grande Valley: At Risk From Fracked-Gas Exports (2022 Update), Sierra Club, Rainforest Action Network, Carrizo Comecrudo Tribe of Texas, Friends of the Earth France, and Save RGV, October 18, 2022. (Pdf)
 
This 24-page report details how proposed LNG development in the Rio Grande Valley (two major export terminals and associated pipelines) would result in ecological damage and the loss of endangered species like the ocelot and risks violating the rights of the Carrizo Comecrudo Tribe.

Gas Bubble 2022: U.S. Edition, Global Energy Monitor, October 31, 2022. (Pdf, press release here)

This 20-page annual review of global LNG terminals finds that U.S. LNG players are benefitting from a sharp increase in contracts and approvals for new export terminals since Russia’s invasion of Ukraine, part of a global surge in export capacity – 779 mtpa in development – that is also being led by Russia, Canada, Mexico, and Qatar.