“For a fraction of Australia’s fighter jet budget, I’d leave East Timor’s fuel in the ground”
The vast Greater Sunrise gas fields in the Timor Sea don’t have to be tapped, and hundreds of millions of tonnes of carbon emissions can be saved, but only if high-income countries are prepared to pay fair compensation, writes José Ramos-Horta, the president of East Timor, in The Sydney Morning Herald.
Fossil fueled foolery
Companies such as TC Energy in the U.S. state of Virginia are looking to influential Black leaders to smooth the way for oil and gas projects that disproportionately affect people of color, Indigenous communities, and low-income neighborhoods, writes Nina Lakhani in The Guardian.
How green public funding is at risk of being plundered by Europe’s gas pipeline rush
The competing MidCat and Barcelona-Livorno proposals aim to swallow billions of euros in EU taxpayers’ money as part of an emergency response that would come too late, though the proposals would leave Europe locked into gas burning for decades, write Elena Gerebizza and Josep Nualart Corpas for Counter Balance.
Germany seeks global alliance to tackle high prices: Deeper EU coordination with major LNG buyers Japan and South Korea has emerged as Chancellor Olaf Scholz’s preferred option to deal with the exorbitant prices that have stalked global gas markets for the last 12 months and escalated since Russia’s invasion of Ukraine. Instead of the EU introducing a price cap on gas imports, a move favored by France, Belgium, Italy, and Poland, among others, Berlin sees the opportunity to use its current presidency of the G7 as a way to forge an understanding with Asian gas customers that would seek to limit outbidding for tight gas supplies and lead to joint approaches to major gas exporters such as the U.S. and Norway, aimed at persuading them to lower prices. Scholz’s signaling comes amid fears that, while Europe should be able to make it through this winter with adequate gas supplies, filling up storage next summer without Russian gas will be an unprecedented challenge. (Politico)
Untapped solar potential is the way out of Bangladesh’s gas imports crisis: Research by climate and energy think tank Ember has identified the substantial boost available to Bangladesh’s energy security if investments are ramped up in the country’s neglected renewable energy sector and electricity grid infrastructure. As it struggles with increasingly unaffordable gas import prices following an aggressive expansion of gas-based generation over the last decade, and with major new gas plant build-out underway and in planning, Bangladesh is now facing LNG import spot market costs of roughly US$11 billion between 2022 and 2024, according to Ember’s calculations. Overlooked solar development plans could have reduced these imports by 25% and saved US$2.7 billion, making the case for a rapid pivot to renewable energy on economic and energy security grounds. (Ember, The Business Standard)
Major chemical pollution threat identified at Uniper’s under development LNG terminal: German environmental and consumer protection group Deutsche Umwelthilfe (DUH) has raised the alarm about the huge quantities of chlorine that will be discharged into the North Sea by the “Höegh Esperanza” floating storage and regasification unit that Uniper intends to use at its under construction LNG project in Wilhelmshaven. DUH research has found that in 2021 the “Höegh Esperanza” was turned down by Australian authorities for an operating permit at a proposed LNG project in Victoria because of its significantly higher than standard levels of biocide discharge. Environmental assessment exemptions for Germany’s new LNG projects, carved out by the new federal “LNG Acceleration Act”, are giving Uniper the green light, says DUH, “to use its LNG terminal ship to discharge ten times as much biocide into the North Sea as the Australian authorities previously considered acceptable at a comparable location.” (Deutsche Umwelthilfe press release [German])
U.S. brokered Israel-Lebanon deal unlocks major gas finds: Despite being technically at war, Israel and Lebanon have struck an agreement on a longstanding maritime border dispute that will enable Israel to begin development of the Karish oil and gas field and Lebanon to get started on exploring the disputed Qana gas prospect. Israel is to receive a share of future revenues from Qana as part of the deal. London-based Energean will develop the Karish field for Israel, with expectations high that hydrocarbons from it can be quickly exported to Europe. TotalEnergies will start working on the Qana prospect “immediately,” according to Lebanese officials. (CNN, Reuters)
New plans to enhance and increase gas capacity across eastern and southeast Europe: A new report by the Energy Community, an EU and neighborhood country organization aimed at creating an integrated pan-European energy market, has set out measures to address eastern and southeastern Europe’s vulnerability to Russian gas supply curtailments. The survey of four gas corridors in the region, conducted between April and June this year, found less than 20% of the technically available gas infrastructure capacity being used. At the same time, the Energy Community is backing the development of seven new offshore LNG terminal proposals and the expansion of already operating terminals. Separately, Serbia’s president Aleksandar Vucic has announced plans to host talks with Azerbaijan’s president Ilham Aliyev by the end of the year aimed at connecting the country to the Trans Adriatic or the Trans-Anatolian gas pipelines. (CEENERGY NEWS, Energy Community [Pdf], Anadolu Agency)
Gas dependency means recession for Germany and Italy, says IMF: Presenting the International Monetary Fund’s latest World Economic Outlook, Fund officials blamed gas dependency on its forecast declines of 0.3% and 0.2% in gross domestic product, respectively, for Germany and Italy next year. An IMF official advised Italy’s new government to “focus on providing support to the most vulnerable.” Italian oil and gas company Eni and pipeline operator Snam, both of whom have adopted net zero targets, have been amongst the busiest European players scrambling to secure alternatives to Russian gas. Eni CEO Claudio Descalzi stepped up warnings that the country faces a gas shortfall of 5-6 billion cubic meters next winter unless a new floating terminal that the company is promoting receives approval by the end of this month. (Bloomberg, Reuters)
“Good for the environment” – UK opens up new oil and gas licensing round: Amid widespread condemnation and incredulity, the North Sea Transition Authority has offered 898 new locations for exploration with as many as 100 licenses in line for companies hoping to extract oil and gas. Facing criticism that the step would neither be compatible with the UK government's legal commitment to reach net zero greenhouse gas emissions by 2050, nor be able to relieve supply pressures in the short term, Climate Minister Graham Stuart claimed that further opening up the North Sea is positive for the environment as it would help replace imported gas and therefore have a lower carbon footprint in terms of production and transportation. Greenpeace UK said the decision was “possibly unlawful and we will be carefully examining opportunities to take action.” (BBC, The Guardian)
“We cannot accept that our American partner sells its LNG at four times the price at which it sells it to its own companies,”
said Finance Minister Bruno Le Maire during a parliamentary debate on France’s budget law.
Brazil: As part of India’s growing energy diversification efforts, ONGC Videsh Ltd. is planning to invest US$1 billion and increase its shareholding in the major BM Seal-4 gas field that is expected to start production after 2026.
Canada: Public health professionals and advocates have lodged a C$10 million (US$7.25 million) greenwashing complaint against the Canadian Gas Association for its recent “Fuelling Canada” advertising campaign, which depicts gas as a low-emission, “sustainable energy choice for the future.”
Egypt: A memorandum of understanding has been signed with Bulgaria to boost scientific, technological, and trade cooperation on oil and gas.
Finland: The Hamina LNG terminal, with 0.1 million tonnes per year import capacity, has started commercial operations.
India: Twenty-six oil and gas blocks and 16 coal bed methane blocks have been put up for auction by the Directorate General of Hydrocarbons in the country’s latest exploration licensing round.
Italy: In an attempt to overcome strong opposition to a new floating LNG terminal proposed for installation in the Tuscan port town of Piombino, local residents and businesses are being offered a 50% discount on gas prices.
Myanmar: Power China’s gas plant in Kyaukpyu, Rakhine State has been connected with its gas supplies and will start power generation by the end of November.
Russia: President Vladimir Putin has said that gas supplies to Europe via one link of the Nord Stream 2 pipeline that was undamaged by explosions last month could resume, an offer which Germany was quick to reject.
Trinidad and Tobago: Canadian firm Touchstone has started producing gas at its Coho facility, making it the first new onshore gas project in Trinidad and Tobago in two decades.
U.S.: Communities in Tennessee are organizing against Enbridge’s 125 mile Ridgeline Expansion gas pipeline project, the proposed routing of which crosses 150 to 200 waterways.
TC Energy and contractors concealed conflicts of interest from U.S. regulator: Freedom of Information Act requests made by watchdog group Energy and Policy Institute have uncovered how TC Energy and two of its contractors, taken on to assist the Federal Energy Regulatory Commission (FERC) with environmental reviews of two of the Canadian pipeline company’s gas pipeline expansion projects, originally failed to disclose conflicts of interest. Although the two contractors, Burns & McDonnell and SWCA Environmental Consultants, were fired by FERC last year when their ongoing work for TC Energy came to light, documentation obtained by the Energy and Policy Institute shows that the conflicted contractors failed to disclose their working relationship with the pipeline company on other projects in bid applications for environmental services work with FERC. (Energy and Policy Institute)
Tokyo Gas sells Australian LNG stakes: The major Japanese LNG buyer has sold its minority stakes in four Australian projects – Chevron’s Gorgon LNG, Woodside Energy’s Pluto LNG, Inpex’s Ichthys LNG and Shell’s Queensland Curtis LNG – to MidOcean Energy, a unit of the U.S. private equity fund EIG. Tokyo Gas explained the decision as part of a portfolio reshuffle to allocate funds to growth areas and said “It does not mean that we will stop investing in upstream LNG assets.” The move may reflect concerns that export restrictions for Australian terminals, which would hit their profitability, could be introduced if domestic gas prices continue to rise. (Reuters)
Decline in European gas prices amid economic carnage: A milder-than-expected autumn so far, coupled with ample supplies of LNG, have brought some relative calm to European gas prices. This week, prices at the Dutch Title Transfer Facility (TTF), Europe's leading trading hub, have dropped to their lowest in three months at around €150 per megawatt-hour. A year ago, the TTF showed gas at €38 per megawatt-hour. According to Eurostat, however, the impacts of sustained high price levels have been stark. Industrial production in the eurozone declined by 2.3% in July compared to the previous month, while consumer confidence is rated as -28.8%, the lowest level on record. (Euronews)
Increased demand for LNG, biofuels, and green ammonia expected from shipping industry: Carbon emission reduction targets set by the UN’s International Maritime Organization are driving shipping and commodities firms to shift from reliance on oil towards fuels including LNG, biofuels, and – longer term – green ammonia. Rio Tinto has said it plans to add nine new ships partly powered by LNG to its portfolio starting next year. Another mining company, BHP, is holding out for ammonia-powered vessels, which are expected to be viable by 2026 or 2027. (Reuters)
Oil and gas financing increasingly becoming a private equity play: New data from global law firm Mayer Brown shows that private equity capital is playing a bigger role in the acquisition of Europe’s oil and gas assets, as energy majors begin to diversify their portfolios in order to meet net-zero commitments. For the 12 months to July this year, private equity funds participated in 16 deals worth a total of £12 billion (US$13.5 billion), a five-fold increase on the corresponding 2020-21 period when they were responsible for 12 deals in total but deployed only £2 billion. Mayer Brown predicts that private equity will drive investment in the increasingly dynamic European LNG sector. Explaining what looks set to be a permanent funding shift, one analyst told Upstream, “Funding oil and gas is seen as too high-risk. Governments and others don’t want to be seen financing fossil fuels … Private equity faces less scrutiny and can step in more readily.” (Upstream)
Another long-term US-European LNG supply deal signed: Venture Global LNG and German utility EnBW have increased the contracted volume of a 20-year deal signed in June. Starting in 2026, 2 million tonnes per annum of LNG will be delivered to Germany from the U.S. exporter’s Plaquemines and Calcasieu Pass terminals. Australian firm Fortescue Future Industries has also invested €30 million (US$29.5 million) in TES, the Belgian developer of a proposed LNG and hydrogen hub in Wilhelmshaven. Fortescue will also invest €100 million in the construction of the TES import terminal, with a final investment decision for the project planned for 2023. (LNG Prime, LNG Prime)
“They’re putting a swarm of locusts to shame,”
said Australia’s Industry Minister Ed Husic of the country’s gas companies as the price of domestically produced gas continues to surge.
Flexible Generation: A Role for India’s Stressed and Stranded Gas-based Power Plants? Institute for Environmental Economics and Financial Analysis, October 6, 2022 [Pdf, press release here].
This 18-page report finds that using half of India’s 25,000 megawatt gas-fired capacity to serve as peaking plants to firm up renewables would be more economical than other options in the short-term market, until battery storage becomes cost competitive.