The promised benefits of Asia’s gas expansion are all gas
Across the continent, communities are demanding a rapid, equitable, and just transition to renewable energy. Instead they’re having to fight back against a multi-billion dollar slate of new gas infrastructure projects that is being imposed under the guise of supporting the clean energy transition, writes Lidy Nacpil in the Philippine Daily Inquirer.
Gas in the Western Balkans: Why the EU and the U.S. are backing a loser
Rather than fostering and funding the creation of new gas demand in a region where overall consumption stands at four percent of the level in Germany, there are a host of climate, economic, and security reasons for Brussels and Washington to focus on supporting the Western Balkans’ delayed shift to clean and efficient energy systems, write Gligor Radečić and Pippa Gallop in EUobserver.
Alaska LNG approval sets up a carbon bomb ten times the size of Willow oil field
For years, the oil industry and even Donald Trump were put off by the huge cost and technological challenges involved in the Alaska LNG project. The recent Department of Energy green light for the US$40 billion project adds to the list of catastrophic climate failures by the Biden administration, writes Andy Rowell in a blog post for Oil Change International.
Australia’s budget is good for climate and renewables — and great for the gas cartel
The Australian Labor Party’s first full-year budget included changes to the petroleum resource rent tax that have been touted as a means to make the offshore LNG industry “pay more tax, sooner.” But the tax reforms are highly modest relative to the industry’s windfall war-profiteering and oversized contribution to domestic energy price hyperinflation, writes Tim Buckley in a deep budget dive for Renew Economy.
Banks and governments targeted as continent-wide pushback against gas gets underway in Asia
Linked to the Don’t Gas Africa and Don’t Gas Latin America campaigns, the launch of a solidarity movement against gas expansion in Asia saw coordinated mobilizations and demonstrations from climate campaigners and people from affected communities in 13 major cities all across the continent. The Don’t Gas Asia campaign’s initial prime focus fell on the 56th annual meeting of the Asian Development Bank (ADB) in Incheon, South Korea, with civil society groups calling out the continuing gas funding role of the ADB and two of its key shareholders, the governments of Japan and Korea. Simultaneously, in the City of London, Filipino campaigners attended the annual meetings of the UK’s biggest commercial banks to urge them not to bankroll major LNG buildout plans in the Verde Island Passage in order to avoid another “ecological nightmare” following a huge oil spill in February that devastated hundreds of fishing communities in the renowned marine biodiversity hotspot. (Don’t Gas Asia, The Business Times of Singapore [Paywall], The Guardian)
World Bank’s private sector arm pulls support for Vietnamese LNG plant after advocacy drive
Following a push from 26 NGOs last September and follow-up engagement warning of the environmental and human rights consequences of funding the proposed 4,000 megawatt (MW) Chan May LNG-to-power plant in central Vietnam, the International Finance Corporation (IFC) has disclosed to the Netherlands-based group Recourse that it has abandoned its plans to support the power plant. At a meeting during last month’s Spring Meetings of the World Bank, the IFC said it had issued a cancellation of its mandate to engage with Chan May LNG, according to a news update from Recourse. The move follows initial IFC funding for the project in 2021. (Recourse, Global Trade Review)
The Gas Graph
Via The Australia Institute, the future impact of the changes to the Petroleum Resources Rent Tax announced in this week’s Federal Budget for 2023-24. Revenue from Australian LNG exports hit A$92.8 billion (US$62 billion) in 2022.
Thailand ramps up renewables in move away from LNG import dependency: A striking new focus on renewable energy production is underway after the Southeast Asian state’s coffers were battered with over US$4 billion in additional costs last year to prevent spiraling utility bills brought on by record LNG import prices. Also facing declining domestic gas production, the Thai authorities are pinning their energy security hopes on a drive for new wind and solar capacity. This is set to double by 2030 following the successful conclusion in April of an approximately 5,000 MW renewables power purchase plan. A further round involving 3,670 MW of clean energy capacity is being planned for later this year, according to Wattanapong Kurovat, director general of the Energy Policy and Planning Office, alongside a new power development plan that is expected to target 50% renewables in the national power generation mix by 2037, up from 20% in the current plan. (Bloomberg)
European Parliament shows ambition on methane emissions, adds stricter rules for imports: A comfortable majority vote in the European Parliament has backed rules requiring oil and gas companies in the EU to check their above-ground infrastructure every two to four months and then fix the methane leaks they discover. The draft regulation, still to be hammered out during negotiations with EU governments, continues to contain rules proposed by the European Commission aimed at largely banning companies from venting and flaring methane. A further amendment saw the Parliament support the extension of the methane regulation to imported fossil energy whereby, starting in 2026, coal, oil, and gas importers will be required to provide evidence that the imported energy adheres to the regulations’ standards. “These important wins need to be safeguarded at all costs,” said Esther Bollendorff from Climate Action Network, “especially for the upcoming trialogue negotiations, as 90% of the gas that we consume in the EU comes from imports.” (Reuters, Politico)
US$77 billion per year — study puts a price tag on the health impacts of U.S. oil and gas production: A new study from Boston University School of Public Health, the University of North Carolina Institute for the Environment, PSE Healthy Energy, and the Environmental Defense Fund has found that, in 2016, air pollution from U.S. oil and gas production contributed to thousands of early deaths and health issues, including 2,200 cases of childhood asthma nationwide. The study researchers calculate the cumulative fallout from the associated nitrogen oxide, ozone, and fine particulate matter pollution to be responsible for US$77 billion in annual health costs and note that “this total is three times the estimated climate impact costs of methane emissions from oil and gas operations.” Forty-four Democratic lawmakers have also called on the Council on Environmental Quality (CEQ), a White House office, to improve consideration of climate and environmental justice when making decisions to permit LNG. In the wake of a recent string of approvals from the Biden administration for new export terminals, and as U.S. LNG exports surged to record levels in April, the letter to CEQ calls for enhanced emissions scrutiny of the industry “from wellhead, through export outside the United States, to combustion.” (Boston University School of Public Health, Reuters)
Turkmenistan’s vast methane emissions problem out in the open: New satellite data from Kayrros, an energy and environmental geo-analytics company, show that methane leaks from Turkmenistan’s two main onshore fossil fuel fields caused more global warming in 2022 than the UK's entire carbon emissions. The “super-emitter” Caspian state’s methane problem is thought to be considerably worse than has been recorded in recent years as satellite technology to measure methane leaks over water is still being developed; thus, Turkmenistan’s methane emissions from offshore oil and gas sites in the Caspian Sea have yet to be accurately recorded. The publishing of the data in The Guardian follows recent overtures from the U.S. government aimed at encouraging the authorities in Ashgabat to slash their oil and gas sector emissions. Kayross data also show Turkmenistan as the world’s leading nation for super-emitter events with 840 detected since the start of 2019. Just over 600 of these events were also recorded in the U.S., placing it second ahead of Russia where more than 350 such events have been detected over the last four years. (The Guardian, Business New Europe)
Shell worker hurt in Houston petrochem plant fire files US$1 million lawsuit: A fire that burned for three days last week at Shell’s Deer Park 1500-acre petrochemical complex in Houston, Texas, reportedly following an explosion in an olefins unit used to make plastics and rubber, landed 15 people in hospital for injury evaluation. One injured worker, Cristobal Jasso, has since filed a US$1 million lawsuit against the company that claims that Shell was “objectively aware of the extreme risk posed by the conditions which caused plaintiff's injuries but did nothing to rectify them.” The cause of the blaze remains unclear and Shell has sought to assuage public health concerns, saying that its air monitoring “has not detected any harmful levels of chemicals affecting neighboring communities.” However, a review of Texas Commission on Environmental Quality records by Oil & Gas Watch shows 1,946 violations since 2012 alone at the Deer Park plant, including serious air and water pollution violations. (ABC13 Houston, Reuters, Oil & Gas Watch)
A “bandaid on a volcano” — Queensland’s farmers told to accept coexistence with gas wells: While the Australian gas industry has welcomed the Queensland government’s broad support for a recent Gasfield Commission review into coal seam gas- (CSG-) induced subsidence, farmers in the state remain highly concerned about the review’s recommendations and are skeptical about industry claims that the resources sector and agriculture can “maintain coexistence.” CSG-induced subsidence occurs when groundwater is extracted by gas companies to allow for gas production. As approvals for CSG wells have rocketed in recent years, its alarming impacts are already being felt in the highly fertile Darling Downs farming region in southern Queensland. The review’s recommendations are felt by many to have come far too late to safeguard landholders’ livelihoods, like a “bandaid on a volcano” according to lawyer Peter Shannon, and there are growing calls for the Queensland government to stop further expansion of the onshore industry. (ABC, Mining Weekly)
Finland: Energy provider Gasum has not taken LNG cargoes from Russia’s Vysotsk terminal in the last month; the Finnish company had previously been taking several cargoes every month from the plant but says it has a long-term LNG supply contract with Gazprom Export that is “still valid.”
Germany: Amid claims and counter-claims, RWE is said to be strongly considering an exit from a controversial LNG development on the Baltic Sea island of Rügen, according to sources familiar with the matter.
Germany: RWE has confirmed that an eight billion cubic meters per year floating storage and regasification (FSRU) LNG terminal in Brunsbüttel has started commercial operations, making it Germany’s third FSRU-based facility to come fully online after the launch of terminals in Wilhelmshaven and Lubmin.
Israel: Prime Minister Benjamin Netanyahu and Defense Minister Yoav Gallant have approved “secret talks” with the Palestinian Authority to extract gas from the Gaza Marine field that lies 36 kilometers off the coast of the Gaza Strip.
Netherlands: Prime Minister Mark Rutte has apologized and pledged a €22 billion (US$24.25 billion), generation-long program to residents of the northern province of Groningen, who suffered for years from earthquakes caused by gas extraction that damaged thousands of homes and ruined lives.
South Africa: Another twist in the Karpowership floating gas-to-power project’s saga has occurred after it emerged that all three of the Turkish-controlled consortium’s plans are potentially back on the table for final approval following last-minute legal appeals or requests for extra time.
UK: The oil, gas, and petrochemicals company Ineos has finalized a US$1.4 billion acquisition of some of U.S. shale producer Chesapeake Energy’s assets in the Eagle Ford shale play in south Texas.
U.S.: LNG developer Tellurian has appointed a new chief financial officer, Simon Oxley, former co-head of Oil & Gas Investment Banking for Europe, the Middle East, and Africa at Barclays.
Eni’s greenwashing forces lawsuit as new offshore carbon bomb project looms in Australia: Italy’s first climate lawsuit has been set in motion against oil and gas major Eni by Greenpeace Italy, ReCommon, and 12 Italian citizens from areas affected by extreme weather. Based on a recently-unearthed Eni research study produced in 1970, the plaintiffs allege that the company had early knowledge of the climate crisis but, through lobbying and greenwashing, is intent on causing future “catastrophic” climate damage to add to what its business model has produced over more than five decades. Between 2015 and 2022, climate lawsuits have been gathering pace globally with around 2,000 cases brought to court. Attention has also fallen on Eni’s hopes of taking a final investment decision later this year on a carbon dioxide-rich gas field off the coast of Australia’s Northern Territory that would be used for LNG exports. A new report from the Institute for Energy Economics and Financial Analysis into the 11 trillion cubic feet Evans Shoal field, which Eni has recently renamed Verus (the Latin word for “truth”), documents how the potential carbon bomb project would undermine both the company’s net-zero commitments and its new appetite for raising corporate finance through sustainability-linked bond issues. (DeSmog, Institute for Energy Economics and Financial Analysis, The Sydney Morning Herald)
Church of England pension fund wants Shell Chair and CEO removed: At Shell’s annual shareholder meeting on May 23, the Church of England’s £3 billion (US$3.75 billion) retirement fund has said it will vote to oust the energy giant’s chair, Sir Andrew Mackenzie, as well as CEO Wael Sawan, after accusing the company of backtracking on climate commitments. In a press article, Adam Matthews, the chief responsible investment officer for the Church of England Pension Board, noted: “We have lost confidence in the direction of the company.” Investment adviser Pirc, which advises shareholders on how to vote at annual meetings, has also called for Shell’s board to be held to account “where targets fall short of the climate expectations of responsible investors.” Sawan was taken to task recently by financial analysts over concerns that Shell’s recent exits from an LNG project in Australia and a carbon capture and storage project in the UK were suggestive of a broad change in corporate strategy. The recently appointed CEO denied the claims while talking up Shell’s lead stake in the under-construction, US$31 billion LNG Canada export project. (The Guardian, Upstream)
Azerbaijan looks to tighten its gas grip in the Balkans: Negotiations with Albania are reportedly well underway, according to Azerbaijan’s authoritarian president Ilham Aliyev, for the Caspian state to make significant investments aimed at establishing a gas distribution network in Europe’s poorest country. The Trans Adriatic Pipeline traverses Albania already, bringing Azerbaijani gas to western Europe. Tapping into this to start up gas consumption for the first time and, therefore, introducing greenhouse gas emissions into Albania’s currently emissions-free energy sector “seems like madness,” according to Gligor Radečić, gas campaigner at CEE Bankwatch Network. “The Albanian government will need to heavily subsidize domestic gas consumption for consumers to use it, which could deplete already limited state coffers, or consumers won’t be able to absorb high costs and volatile gas prices, which could leave the infrastructure stranded,” said Radečić. (EURACTIV)
Russia’s LNG ambitions rest on largely unproven homegrown technologies: The departure of top western LNG equipment makers after the invasion of Ukraine in February 2022 has made rapid development of domestic liquefaction technologies an imperative for the Kremlin, which is looking to triple LNG exports by 2030. Last month, LNG exporter Novatek received a patent for its Arctic Cascade Modified technology that is based on a design already being used in the fourth train of the company’s Yamal facility, currently Russia’s biggest operating LNG plant. That liquefaction train faced problems post-commissioning in 2021, though Novatek remains bullish, telling Bloomberg, “We know how to solve technical issues.” One of the acid tests in the short term will be the performance of Novatek’s massive Arctic LNG 2 terminal. The project’s first train, largely completed by French, German, and U.S. subcontractors before they pulled out last year, should come online by the end of 2023, but trains two and three are now in the hands of a Russian engineering firm and a company registered in the United Arab Emirates. (Bloomberg [Paywall])
Australia’s top pension funds boosted fossil fuel investments by 50% last year: New analysis from Melbourne-based environmental group Market Forces has found that Australia's 30 biggest pension funds increased their investments in top domestic and international coal, oil, and gas producers by 50% in 2022 despite most of these funds having set net-zero targets. One company found to be contradicting its climate commitments is AustralianSuper, the country’s largest fund. It increased its investment in top oil and gas producer Woodside Energy by about 19 times last year. Overall, the 30 funds were found to have increased their investments in the most climate-wrecking fossil fuel companies to more than A$34 billion (US$23 billion). (Market Forces, The Sydney Morning Herald)
More sediment and erosion problems pause Coastal GasLink construction: As climate change-induced wildfires raged across Canada’s gas heartland in Alberta, pipeline company TC Energy announced that it had temporarily halted construction in British Columbia on a 20-kilometer section of its 670-kilometer Coastal GasLink project due to further erosion and sediment control problems. The company’s decision followed the province’s Environmental Assessment Office ordering a shut down in late April of a three-kilometer stretch of the pipeline due to sediment-laden water reaching a tributary of the Anzac River. TC Energy was also forced to shut down two compressor stations on its Nova Gas system in Alberta last weekend due to their proximity to wildfires. A state of emergency was called in the province due to 110 active wildfires, 36 of which were classified as out of control. Drought conditions that gripped Alberta in March have precipitated the wildfire conditions, resulting in an estimated 3.7% cut in Canada’s oil and gas production. (The Globe and Mail, Vancouver Sun, OilPrice)