Costa Rica and Denmark look to establish Beyond Oil and Gas Alliance: A new diplomatic initiative is being spearheaded by Costa Rica and Denmark with the aim of garnering support from other governments willing to both ban new oil and gas licenses and set a date for phasing out production. The Beyond Oil and Gas Alliance (BOGA) is expected to formally launch at COP26 in November, and the two founding states have reportedly been sounding out New Zealand, Portugal, Spain and the UK about potential participation. BOGA’s aims of forging collective government action for the first time to end oil and gas production are in line with the International Energy Agency’s conclusion earlier this year that a 1.5C pathway requires no new oil and gas fields to be approved for development. (Reuters)

Doubts over European funding for Russian Arctic LNG terminal: Novatek’s US$21 billion Arctic LNG 2 terminal, currently under construction on the Gydan Peninsula with the involvement of TotalEnergies and other investors, may be denied financing by the export credit agencies (ECAs) of France, Germany and Italy. Novatek's CEO Leonid Mikhelson disclosed to Reuters in early September that France's Bpifrance would not be backing Arctic LNG 2 and hinted that the German and Italian ECAs may also have grown cold about the project. Le Monde subsequently reported recent public suggestions from French president Emmanuel Macron that France is considering dropping its support for the megaproject, though no official decision has emerged from the French government. Anna-Lena Rebaud, finance campaigner at Friends of the Earth France, told Inside Gas: “The French government must not only officially confirm that it won't support Total's LNG project in the Arctic, but it also has to put an end to overseas fossil fuel subsidies by COP26.” German campaigners remain unclear about their government’s position on the project, which remains listed as a “project before decision” on the German ECA’s website. (Reuters, Le Monde [French], Reuters, German ECA Project Information)

Landmark study finds that majority of fossil fuel reserves must stay in the ground: A team of researchers has published recommendations in the journal Nature that almost 60% of oil and gas reserves, and 90% of coal must remain unextracted if there’s to be a reasonable chance of the world remaining in line with a 1.5C carbon budget. The percentage figure for unextractable gas rises by 10% from analysis conducted in 2015 based on a 2C carbon budget, and the study stresses that the unextractable numbers published are likely too low for achieving 1.5C. (Nature, The Guardian)

Nord Stream 2 construction completed but legal and political obstacles remain: Gazprom may have fully completed construction of the Nord Stream 2 dual pipeline on September 10, but regulatory battles and claims and counter-claims look set to rumble on into 2022, potentially delaying the flow of additional Russian gas into a European gas market contending with continued supply concerns. Before Nord Stream 2 can start pumping gas, Nord Stream 2 AG, the Switzerland-based operator of the pipeline, has to go through three key stages of regulatory approval. Germany’s energy regulator Bundesnetzagentur must first make a draft judgment by January 8 next year on whether the company can be certified as an independent transmission system operator under German energy law. From there, the European Commission will have two months to decide if the project complies with European unbundling rules that require pipeline owners to be different from suppliers of gas flowing in them to ensure fair competition. The final hurdle, which could extend into May, is an ultimate rubber-stamping – or otherwise – for NS2 from Bundesnetzagentur. (Reuters, S&P Global, S&P Global)  

Hydrogen lobby boss quits as UK government releases strategy paper: The publication of a Hydrogen strategy by the British government, which foresees an equal role for both blue and green hydrogen in the country’s efforts to meet its goal of five gigawatts of low-carbon hydrogen production by 2030 to replace natural gas in homes as well as in industry and transport, has provoked the departure of Chris Jackson from his post as Chair of the UK Hydrogen and Fuel Cell Association. In stinging criticism of the role being planned for blue hydrogen, Jackson justified his resignation by saying that “blue hydrogen is at best an expensive distraction, and at worst a lock-in for continued fossil fuel use that guarantees we will fail to meet our decarbonisation goals.” £900 million (US$1.25 billion) is being lined up to support hydrogen projects in the UK and the government intends to work with industry on potentially mixing 20% hydrogen into the existing gas supply. (Reuters, The Guardian)

EU-US: A Global Methane Pledge has been agreed between Brussels and Washington with the aim of inviting other major economies to sign up to cutting methane emissions by at least 30% by 2030 in high-emitting sectors such as oil and gas, and agriculture. 

Hungary: Foreign minister Peter Szijjarto announced a new 15-year gas supply deal with Gazprom, with the Russian gas to be transported to Hungary via Austria and Serbia instead of through Ukraine.

Ireland: New Fortress Energy has lodged its latest planning application for a floating LNG terminal and gas-fired power plant on the Shannon estuary in County Kerry, which Ireland’s Department of the Environment has said it will oppose.

Norway: State-controlled Equinor has started production from the US$918 million third phase of its giant Troll gas field in the North Sea, which will extend the deposit's lifetime beyond 2050.

Romania: Clean Air Task Force has found methane leaking from oil and gas wells, pipelines, and storage tanks at nearly 50 sites in Romania, one of the European Union’s biggest oil and gas producers.

UK: A proposed gas-fired peaker plant in Sudbury, Suffolk has been rejected as a council planning committee cites contradiction with climate change goals.

UK: Beyond the controversial Cambo oil project, North Sea oil and gas producers are promoting a further 17 new fields for UK government approval. 

Ukraine: Following a meeting in Washington D.C. between presidents Biden and Zelensky, a Joint Statement on the US-Ukraine Strategic Partnership noted that both governments “support efforts to increase capacity for gas supplies to Ukraine from diversified sources.”

‘Net zero’ European banks failing to match rhetoric with action: While the majority of Europe’s top commercial banks have pledged to reach net zero carbon emissions by 2050 at the latest, new research by investment campaign group Share Action has found that none have a comprehensive plan to reach this goal. Of the 25 banks assessed, only Lloyds Banking Group, NatWest, and Nordea have committed to halving their financed emissions by 2030. The report details that Danske Bank and NatWest have introduced project finance restrictions linked to the expansion of the oil and gas industry, though on the whole policy commitments from Europe’s banks restricting the financing of oil and gas are vanishingly thin and toothless. (Share Action [Pdf], The Guardian)

Trans Adriatic Pipeline fails to receive bids for capacity expansion: The 10 Bcm/year TAP pipeline received no binding bids this summer under three expansion scenarios which the TAP Company offered. An additional market test phase for additional capacity has now been launched for the controversial pipeline which began flowing gas from Azerbaijan into Europe at the end of last year. On September 17, the trial of TAP and 18 of its managers is expected to recommence, with Italian campaign group ReCommon planning to stream the court proceedings on Twitter. TAP and its executives are accused of breaches of Italian and European environmental laws during the pipeline’s construction in southeast Italy. (S&P Global, Global Energy Monitor)

Report finds that reducing exposure to oil and gas “should be the next environmental objective for insurers”: The insurance research team at French bank Société Générale has issued a report which argues that the time is ripe for the global insurance industry to follow the example of Australia’s  Suncorp, to date the only insurer which has committed to end its coverage for all new oil and gas production projects. Société Générale points out that the financial hit for insurers were they to restrict coverage for new oil and gas developments would be minimal: premiums from insuring new projects in the sector totalled roughly US$1.7 billion in 2018, or just 0.1% of all property and casualty premiums. (Bloomberg) 

Major Dutch pension fund fully divests from fossil fuels: PME, the fifth largest pension fund in the Netherlands with around €61 billion in assets, has announced that it has sold its entire portfolio of fossil fuel investments. The sell-off is thought to have raised €1.2 billion (US$1.4 billion) which PME plans to invest in solar parks, wind turbine parks, hydropower and energy-saving initiatives. Among the reasons given by PME for its divestment decision are the high profile court cases being brought against oil companies. In a landmark ruling in May, a court in The Hague ordered Shell to reduce its net emissions by 45 percent compared to 2019 levels following legal action taken by Friends of the Earth Netherlands and other groups. Campaign group FossilFree Netherlands is considering a lawsuit against ABP, the largest Dutch pension fund, to compel it to drop its €17.4 billion (US$20.5 billion) fossil fuel portfolio. (Reuters, NL Times) 

Another public development bank loan signed for Greek gas plant: Following the agreement of a €125 million (US$148 million) loan from the European Investment Bank in July 2020, the European Bank for Reconstruction and Development (EBRD) has also agreed a €75 million (US$89 million) loan to finance the construction and operation of what will be one of the largest power stations in Europe, the 826 megawatt Agios Nikolaos CCGT. Plans for a buildout of new gas plants in Greece follow the government’s pivot away from lignite coal power announced in 2019. Commodities markets’ analysts ICIS have indicated that a proposed move to a capacity market in Greece by 2024 should enable four other CCGT projects totalling 3.3 gigawatts, and which have yet to reach a final investment decision, to come online. (IJGlobal [Paywall], ICIS, Global Energy Monitor)

Czech gas giant issues first green bond: Czech Gas Networks Investments, the parent company of Czech Grid Holding, the country's largest gas distribution network, has issued a €500 million (US$591 million) green bond, with Citi, ING, Société Générale and UniCredit acting as bookrunners on the deal. Green bond issuance in central and eastern Europe to date has mostly been led by governments, though Polish oil refiner PKN Orlen also sold a €500 million green bond in May this year. With the EU’s €800 billion (US$946 billion) coronavirus recovery fund ‘Next Generation EU’ set to involve 30% source funding from the issuing of green bonds starting in October, the European Commission has said that nuclear energy and gas projects put forward in member state recovery plans will not be permitted to be financed via green bonds. (Global Capital [Paywall], EurActiv)

Fueling the Climate Crisis: South Korea's Public Financing for Oil and Gas, Solutions for Our Climate, August 2021. (Pdf)
 
This 66-page report reveals the US$127 billion in support provided by South Korea’s public financial institutions for global oil and gas projects between 2011 and 2020. This support is 13 times greater than South Korea’s financing for coal power over the same period, and the study warns that Korea's massive oil and gas funding is vulnerable to stranded asset, transition, and climate credibility risks.  

The Three Seas Initiative’s Failing Case for Gas, Global Energy Monitor, September 2021. (Pdf)

This eight-page briefing details how 12 central and eastern European states risk undermining the EU’s climate goals due to their participation in the Three Seas Initiative, a regional cooperation forum which is currently prioritising the development of new gas infrastructure over renewable energy projects.