UN probe launched into Aramco’s role in driving climate-fuelled human rights violations: The world’s biggest polluter, oil and gas giant Saudi Aramco, has received a warning from the United Nations’ human rights and transnational corporates working group over the human rights impact of the state-owned company’s outsized contribution to the climate crisis. In the first case of the UN acting on an oil and gas major’s human rights responsibilities for climate change under the UN Guiding Principles on Business and Human Rights, the communication to Aramco states that an investigation will be launched into allegations put forward by environmental law group ClientEarth in 2021 that its operations are both undermining the Paris Agreement and impacting the promotion and protection of human rights in the context of climate change. The UN letter, sent on June 26 and giving Aramco 60 days to respond, expressed “serious concern” over the detrimental human rights impacts of fossil fuels exploitation. Significantly, similar letters were sent to Aramco’s financial backers, including the likes of Citi, HSBC, JPMorgan Chase, and Société Générale. ClientEarth noted that Aramco had failed to respond to the UN experts within the stipulated 60 days, while responses were received from HSBC and Société Générale. (ClientEarth, Bloomberg) 

Fossil fuel subsidies surged dramatically in 2022: Two separate pieces of research have revealed that public money subsidies for oil, gas, and coal hit record high levels in 2022, in spite of pledges to phase them out and the ever-worsening climate emergency. Assessing the picture across 170 countries, the International Monetary Fund estimates that subsidies rose sharply by US$2 trillion in 2022 to US$7 trillion, which the Fund’s economists attributed to governments — particularly China, the U.S., Russia, the EU, and India — stepping in to overcome last year’s global spike in energy prices and to boost post-pandemic economic recovery. While acknowledging that removing subsidies “can be tricky,” the IMF researchers noted that carefully designed policies that support poorer households could work, especially if coordinated internationally. Research from the International Institute for Sustainable Development also identified that last year G20 governments provided a record US$1.4 trillion of public money for fossil fuels, with three quarters of all subsidies to the energy sector still going to fossil fuels. Eliminating these subsidies while implementing carbon taxes, calculates the think tank, could generate up to US$2.4 trillion in revenue to support key public needs. (International Monetary Fund, The Guardian, International Institute for Sustainable Development, The Guardian)  

Challenges mount for Germany’s Rügen island LNG plans: Controversy and legal actions are intensifying over the planned LNG import terminal on Germany’s tourist island of Rügen. With local opposition to the project continuing, Germany’s economy minister and vice chancellor Robert Habeck has appealed to state authorities in the country’s north-east to allow its construction, claiming that increasingly likely delays will lead to a “risk of incalculable price increases, supply bottlenecks and severe economic damage, which would hit eastern Germany in particular.” Both the local municipality of Binz, the largest city on Rügen, and the NGO Deutsche Umwelthilfe have filed lawsuits aimed at halting the construction of an undersea pipeline that would connect the terminal with the mainland. While the state of Mecklenburg-Western Pomerania is calling for an environmental impact assessment of the project, it has been slammed by environment groups — including WWF Deutschland — for allowing dredging work for the pipeline to commence ahead of assessment procedures, which they say will damage the marine environment in the Baltic Sea. The civil disobedience movement Ende Gelände will hold a camp on Rügen island in late September. (Bloomberg, Spiegel [German], WWF Deutschland [German], Ende Gelände)

Activists arrested at Croatian LNG protest: Twenty-six activists were arrested and subsequently released after a peaceful protest against the expansion of the floating LNG import terminal on the Croatian island of Krk. Under banners including “Record LNG profits — record droughts, forest fires, floods, heatwaves and deaths,” the protestors were made up of participants from the Adriatic Climate Camp, taking place on the island, as well as local residents. The 2.9 bcm/y floating storage and regasification unit vessel LNG Croatia has been operating since the beginning of 2021. Planning is underway to increase the FSRU’s capacity to 6.1 billion cubic meters per year (bcm/y) by 2025, with a nearby 7 bcm/y onshore terminal also slated for development by 2030. (N1, GEM.wiki)

Report finds no economic boom in Appalachia’s fracking counties: A report from nonprofit research group the Ohio River Valley Institute (ORVI) into the economic impacts of gas production in the Appalachian region of the United States has found that promised increases in jobs and income have failed to materialize since the fracking boom began in 2008. Assessing 22 gas-producing counties across the “Frackalachia” region in the states of Ohio, Pennsylvania, and West Virginia, the ORVI report states that they have lost more than 10,000 jobs and 47,000 residents between 2008 and 2021. Income growth in the counties also failed to keep pace with that of the three states and the U.S. as a whole. The report’s findings have been rejected by various industry bodies. The Marcellus Shale Coalition, a trade group for the Pennsylvania gas industry, said that “activist organizations” are “marginalizing and undercutting” the jobs and community benefits created by the gas industry. (Ohio River Valley Institute, Inside Climate News)

New analysis finds EU imports of Russian LNG have jumped 40% since Ukraine invasion: In the first seven months of 2023, analysis from Global Witness shows that EU countries purchased 22 million cubic meters of Russian LNG, a 40% rise over the 15 million cubic meters bought during the same period in 2021. Based on data from industry analytics firm Kpler, the campaign group calculated that EU countries have so far this year bought 52% of Russia’s LNG exports, compared to 49% in 2022 and 39% in 2021. Spain and Belgium were Russia’s second and third largest customers between January and July with 18% and 17% respectively of total volumes, just behind China, which took 20% of Russia’s total sales in the time period. “It’s shocking that countries in the EU have worked so hard to wean themselves off piped Russian fossil gas only to replace it with the shipped equivalent,” said Jonathan Noronha-Gant, senior fossil fuel campaigner at Global Witness. “It doesn’t matter if it comes from a pipeline or a boat — it still means European companies are sending billions to Putin’s war chest.” (Global Witness, The Financial Times [Paywall], Reuters) 

Australia: Santos has announced that costs for its 70% complete Moomba carbon capture and storage (CCS) project in the Australian outback have ballooned over the last three months from US$165 million to US$220 million. 

Côte d'Ivoire: Eni has started production of oil and gas from the offshore Baleine Field, a project described by the company as the first emissions free project in Africa in terms of scope 1 and 2 emissions. The Italian company offsets emissions from Baleine via local offsets, including the provision of stoves and protecting trees.

Ecuador: State-owned EP Petroecuador has begun an international bidding process for an oil and gas company to continue development of Block 6, also known as Campo Amistad, the country’s largest gas field. 

EU: Analysis from Ember shows that fossil fuels produced 33% of the EU's power in the first half of 2023, the lowest level since records began, with the contribution from gas falling by 13% compared with the same period last year. 

Malaysia: Sarawak Shell Berhad (SSB), a subsidiary of Shell, has commenced first gas production at its Timi sweet gas field development off the coast of Sarawak.

Norway: The Ministry of Petroleum & Energy said it had received “a large number of applications” for offshore oil and gas exploration blocks in this year’s licensing round. 

Romania: Two people were killed and 57 injured as a result of two huge explosions [Video] at an unlicensed liquefied petroleum gas station in Crevidia near the capital Bucharest.

U.S.: The U.S. Energy Information Administration expects Antigua, Australia, Cyprus, and Nicaragua to start importing LNG for the first time by the end of 2024. 

Strike action called at Chevron’s Australian LNG facilities: Workers at two LNG facilities operated by Chevron in Australia are set to start strike action from September 7 in an ongoing dispute over pay and conditions. The Offshore Alliance union representing the workers at the Wheatstone offshore platform and the Gorgon LNG facility said that if no agreement is reached with the company then rolling stoppages and some work bans will begin. Looming industrial action at the North West Shelf LNG export terminal was averted when operator Woodside Energy reached a breakthrough with unions. An Offshore Alliance spokesperson said the company had made “a strong offer” of “an enterprise agreement with industry standard terms and conditions.” The Woodside breakthrough calmed gas markets following a substantial spike in prices earlier this month at the mere prospect of industrial action disrupting Australian LNG supply. Amid some expectations that a deal is likely to be hammered out soon between unions and Chevron, Bloomberg reported that major buyers of Australian LNG in China and Japan were not panic-buying so far following the strike action announcement. (Argus Media, Bloomberg, Bloomberg)

Key Asian markets deflate U.S. political hype for massive Alaska LNG project: The political backers of the Alaska LNG terminal project have been left reeling but still determined after a Wall Street Journal exposé in late July revealed that key buyers in Japan and South Korea have strong reservations about the mega project slated for development in Nikiski, on the Kenai Peninsula. This month, the Sierra Club and Center for Biological Diversity sued the U.S. federal government for approving the US$38.7 billion project without giving full consideration to the climate and environmental harms of the 800-mile pipeline that would deliver gas from Alaska’s North Slope to the export terminal, which has an estimated start-up date of 2030. According to a journalist involved in the story, the climate angle was the principal entry point for the WSJ’s reporting. Companies in Japan particularly, however, expressed reluctance about the project due to its long-term timeline and the fact that it has been delayed already for at least five years. This summer, the project has also run up against skepticism from local stakeholders concerned about the squandering of Alaska state resources for environmentally destructive gas development. (KDLL – Public Radio for the Central Kenai Peninsula, KDLL)

European companies’ gas advocacy threatens energy transition in Africa and Europe: New research into the LNG advocacy of 15 European oil and gas companies by the think tank InfluenceMap has found that since 2021 the vast majority of the assessed companies have lobbied for gas exploration and LNG infrastructure in Africa, advocated for LNG imports and transportation in Europe, and sought to weaken EU climate policies that would reduce gas demand across the bloc. Based on analysis of the companies’ climate policy engagement activities and corporate strategy documents, only Germany’s E.ON and Italy’s Enel — both of whom have ownership stakes in new LNG terminals in Europe — were identified as having focused advocacy efforts on a scale-up of renewable energies and a phase-out of fossil fuels, with both also adopting positive positions on European climate legislation. BP, Shell, and TotalEnergies were found to have adopted the most aggressive and comprehensive influence campaigns that could lock in gas across both continents, while Eni and Equinor were found to have sought to undermine EU climate policy at the same time as pushing hard for LNG developments in Africa. (InfluenceMap) 

BP Looney’s energy transition talk, and gas expansion action: BP CEO Bernard Looney has kept up his mantra on the need to increase oil and gas production while at the same time investing to reduce greenhouse gas emissions, telling a conference audience in New Delhi that “We need to do both. We need to invest in today’s energy system responsibly and, at the same time, we must invest in accelerating the energy transition.” BP’s spending on energy transition projects is intended to hit 40% of its overall capital expenditure by 2025, according to Looney, rising to 50% by 2030. Looney’s India visit preceded a trip to Egypt where he announced BP’s plans to invest US$3.5 billion in gas exploration and development over the next three years. The plans include the drilling of four new gas wells before the end of the year. (Reuters, Ahram Online)

Cyprus rejects Chevron’s modified Aphrodite field development plan: Cypriot Energy Minister Giorgos Papanastasiou has rejected a second development plan submitted by Chevron for further development of the Aphrodite gas field in the eastern Mediterranean. In May, the U.S. major submitted revisions to the field’s existing development plan, including new plans for a subsea pipeline to connect the field to an existing processing and production facility in Egypt, but it is thought that Nicosia is concerned that the proposed changes would result in lower state revenues from Aphrodite, which holds an estimated 125 billion cubic meters of untapped gas. Chevron and its partners, Shell and Israel’s NewMed, have been given 30 days to resolve the differences with Cyprus. (Bloomberg, Energy Voice)

Kinetiko Energy in talks with South Africa’s Sasol for gas supply deal: Kinetiko Energy, an Australian gas company, has commenced talks with South Africa’s Sasol for a potential gas supply deal. The development comes after Kinetiko discovered shallow sandstone gas earlier this month in the eastern province of Mpumalanga’s Block 272, not far from Sasol’s Secunda petrochemical complex that produces fuel from coal and gas. The Secunda complex is the world’s biggest single-site source of greenhouse gases as well as a host of other pollutants such as sulfur dioxide. Sasol is in dire need of new sources of gas as its principal supplies from fields in neighboring Mozambique are due to run out in the next few years. The company is still facing prosecution from South Africa’s Competition Tribunal over allegations that it has forced excessive gas prices on private customers for several years. (Reuters)

Private Equity in PJM: Growing Financial Risks, Institute for Energy Economics and Financial Analysis, August 2023. [Pdf, press release here]

This 17-page report finds that while the Pennsylvania-New Jersey-Maryland Interconnection (PJM), the largest power market in the U.S., was reshaped by private equity investors over the last decade, PJM financiers are facing accumulating risks, including lower capacity prices, competition from renewable energy, and capacity market reforms.