Landmark Massachusetts strategy to get customers and utilities off gas: A ruling from the U.S. state of Massachusetts’ Department of Public Utilities (DPU) requires the state’s utilities to pursue alternatives to gas in a newly-unveiled regulatory order that states: “It is fair to say that a different lens will be applied to gas infrastructure investments going forward.” After three years of deliberations, the state’s new direction for achieving its target of net zero emissions by 2050 focuses on electrification and demand reduction measures as well as a transition away from pipeline-delivered gas. Hailed by Kyle Murray of the climate advocacy and research group Acadia Center as “potentially the most transformative climate decision in Massachusetts history,” significantly the DPU resisted — on the grounds of high costs and insufficient supply — a bid from gas companies to replace gas with renewable gas and to introduce blending with green hydrogen. The new order also requires all of the state’s gas utilities to file climate compliance plans every five years, starting in 2025, to ensure that they are working to eliminate emissions and electrify. (The Boston Globe, WBUR)

Canada proposes emissions cap of up to 38% for oil and gas sector: A draft framework, released by the federal government during COP28, that aims to cut oil and gas sector greenhouse gas emissions by 35–38% below 2019 levels by 2030 has drawn criticism from provincial governments, campaigners, and industry alike. The cap-and-trade system, to be phased in between 2026 and 2030 and applied to upstream oil and gas as well as LNG facilities, will set a legal limit on sectoral emissions and allow companies to buy and sell a limited amount of emissions allowances. A two-month public comment and engagement period was triggered by the announcement. Other than concerns over the offsetting component, which Federal Environment Minister Steven Guilbeault noted would help the industry cut pollution without cutting production, climate advocates also criticized the cap’s lack of ambition compared to Canada’s national emissions reduction target of 54% below 2019 levels by 2030. Ottowa also proposed new regulations intended to ensure a 75% reduction in the oil and gas sector’s upstream emissions of methane from 2012 levels by 2030. In 2021, the sector was officially responsible for around 40% of national methane emissions, making it the largest industrial emitter of methane in Canada. However, the sheer scale of the problem — made worse by growing scientific evidence showing that regulators are drastically underestimating the true scale — has been reconfirmed by McGill University researchers who measured methane emission rates at abandoned and unplugged oil and gas wells in the provinces of Alberta and Saskatchewan. Their study shows that one in 20 unplugged wells were “super high emitters” of methane, with one well identified to be leaking at the highest rate ever recorded in North America. (Reuters, Global News, Canada’s National Observer, Government of Canada, The Tyee)

EU acts to get a bit tougher on Russian imports with new optional measures: EU legislators have reached a provisional agreement on granting the bloc’s member states the option of ending gas imports from Russia and Belarus. The draft law is expected to enter force in May 2024 when a string of countries — principally Austria, Belgium, France, Hungary, and Spain — will be able to “partially or, where justified, completely limit” access to pipeline and LNG terminal infrastructure to gas operators from Belarus and Russia, which continued to supply roughly 12% of total EU gas imports in the third quarter of 2023, according to Eurostat data. Acknowledging that the Zeebrugge terminal still receives Russian LNG for re-exporting purposes, Belgium’s energy minister Tinne Van der Straeten commented: “Surely we don’t need it for ourselves but neighboring countries still do.” The European Commission opted for a discretionary approach due to opposition from some countries and concerns that an outright ban could destabilize markets, though the EU objective of ending all Russia fossil fuel imports by 2027 remains. Moscow has hit out at the decision. A foreign ministry spokeswoman said it would not damage the Russian economy and was “another measure that will result in the destruction of the EU’s own economy.” (Financial Times [Paywall], Montel, S&P Global, Reuters)

COP28 — Constructive steps on subsidies, intentionally destructive ambiguity on “transitional fuels”: Although the problematic word “inefficient” crept back into and attached itself to “fossil fuel subsidies” in the final agreed version of the global stocktake at the COP28 climate summit (the text calls for the phasing out of “inefficient fossil fuel subsidies that do not address energy poverty or just transitions, as soon as possible”), some positive momentum was achieved on subsidies in the conference sidelines. A coalition of twelve countries led by the Netherlands announced initial commitments, including the development of national phase out strategies, to reduce public money support for dirty fuels that the IMF estimates will remain stuck above US$1 trillion this year. The final COP28 deal calls for “transitioning away from fossil fuels in energy systems” and contains no mention of gas the fuel. For at least another year, however, the agreement leaves the door open to exporting and importing countries by stating that “transitional fuels can play a role in facilitating the energy transition while ensuring energy security.” International Energy Agency (IEA) head Faith Birol commented diplomatically that “most” of the IEA’s five criteria for success at COP28 had been “reflected” in the final outcome. Three days out from the concluding session in Dubai, his agency’s assessment of pledges made — including on methane — was that they represented “only around 30% of the emissions gap that needs to be bridged to get the world on a pathway compatible with limiting global warming to 1.5C.” (Carbon Brief, International Institute for Sustainable Development, United Nations Framework Convention on Climate Change [Pdf], Fatih Birol on X, IEA) 

Vital months ahead for Papua LNG: Efforts to realize the long-delayed 5.6 million tonnes per year (mtpa) Papua LNG export project, which would be the second export facility in Papua New Guinea (PNG), are intensifying, though the country’s petroleum minister has acknowledged that further delays are likely due to difficulties over financing and the availability of contractors. Kerenga Kua told an investment conference in Sydney that a final investment decision (FID) for the US$13 billion TotalEnergies-led project was being targeted for 2024 and suggested that the second half of the year was more likely. PNG’s state-owned Kumul Petroleum, a partner alongside Australia’s Santos in both Papua LNG and the operating ExxonMobil-led PNG LNG terminal, has said it is in advanced talks with Chinese banks, including Bank of China and ICBC, for funding it requires for both projects. Kumul’s managing director, Wapu Sonk, also noted that while Australian funders had kept out of the Exxon project, plans to build a carbon capture facility at the Total project could make the likes of ANZ and Export Finance Australia more receptive. In a letter to potential international commercial and public funders, 50 environmental and social justice groups warned that backing for Papua LNG was incompatible with keeping global warming below 1.5C. Kumul also confirmed that in tandem with Total it had started sales negotiations in Singapore for the plant’s output. Slated to start producing in 2028, marketing the project’s LNG may prove challenging as a glut of global supply is widely expected after 2026–27. (The Australian Financial Review, Reuters, Reuters, Argus, Santos [Pdf])

Legal action seeks to block test drilling in Austrian UNESCO site: Residents in the Upper Austrian town of Molln and Greenpeace are challenging the approval of an eight-week drilling campaign that is poised to get underway this winter led by the Australian stock exchange-listed ADX Energy. The Welchau gas prospect, estimated by the Perth-based company to contain 807 billion cubic feet of gas equivalent, has been approved for test drilling by the national Mining Authority and recently received environmental clearance from state authorities in Upper Austria. Concerns are being raised about the prospect’s location within a UNESCO World Heritage Site and its close proximity to the Kalkalpen National Park. For the project promoters, at less than 20 kilometers from existing gas pipelines, the Welchau site is strategically placed. Greenpeace’s legal complaint lodged with the state authorities against the test drilling also calls for an end to oil and gas production in Austria by 2035. (Der Standard (German), Vindobona, The West Australian)

China: A new nationwide air quality action plan, released by the State Council and largely focused on the coal and steel industries, contains a call for increased gas production. 

Cyprus: In an ongoing standoff, the government has given project operator Chevron an extension until the end of March 2024 to submit an “optimal development plan” for the offshore Aphrodite field.  

Germany: A construction worker was seriously injured in late November on the Baltic island of Rügen at the site of a planned LNG terminal, which critics allege is being built unsafely with excessive haste.

Italy: The export credit agency SACE has guaranteed a €400 million (US$438 million) loan from a string of European commercial banks for the Swiss commodities trader Gunvor to supply gas and LNG to Italian industry. 

Mozambique: Indonesia’s Pertamina has canceled a 20-year, 1 mtpa supply contract it signed in 2019 with the currently stalled Mozambique LNG export project.  

Netherlands: Hoegh LNG is joining with VTTI — co-owned by Vitol, IFM, and Adnoc — to develop the country’s latest LNG import terminal, now estimated to be coming online in the second half of 2027 with capacity of 7.5 billion cubic meters, roughly 25% percent of current total average gas consumption in the Netherlands.  

Norway: A record high US$21.85 billion in oil and gas investments is being targeted in 2024, according to an industry group, which would amount to an almost 5% increase over 2023 levels. 

Serbia: An interconnector with Bulgaria was opened that will reduce Serbia’s dependence on Russian gas by giving it access to gas from Azerbaijan and LNG from Greece. 

Zimbabwe: Described as “one of the most significant developments in the onshore oil and gas sector in the southern African region,” Australian company Invictus Energy has announced the discovery of gas deposits in the Cabora Bassa Basin, though no estimates about the quantity and quality of the reserves have been released.  

Pollution failures at Calcasieu Pass add to pressure on Venture Global: While BP has written to U.S. energy regulators requesting that they compel gas exporter Venture Global to reveal the details behind delays in contracted cargo deliveries from the Calcasieu Pass (CP) terminal in Louisiana, a new report from a U.S. group documents the operational problems alongside more than 2,000 reported permit violations that have taken place since the export facility began operations in January 2022. The Louisiana Bucket Brigade’s report draws on evidence accumulated by residents living close to CP showing the occurrence of lengthy flaring incidents — both night and day — in far greater frequency than has been reported by Venture Global to the Louisiana Department of Environmental Quality. Although the company reported that CP has been in violation of its permit for 82 days in 2023, when neighbors’ documentation is combined with filed reports, the 16-page report finds, operational problems were documented on 115 out of 181 days in the first half of the year — or 63% of the time. The findings come as Venture Global has an application pending before the U.S. Federal Federal Energy Regulatory Commission and the Department of Energy for a second, bigger LNG export facility at Calcasieu Pass. Greenpeace USA has warned about the dangers of the CP2 project by projecting methane flares and frontline testimonials in Washington, D.C. (Louisiana Bucket Brigade [Pdf], Reuters, Greenpeace USA [YouTube])

New projects threaten to exacerbate underutilization at India’s terminals: In the first half of the current fiscal year, data from India’s oil ministry indicate that six out of the country’s seven LNG import terminals operated at a utilization rate of less than 40%. The 17.5 mtpa Dahej terminal in Gujarat saw capacity utilization of over 90% while three facilities failed to climb above the 20% level. The trend is principally attributed to domestic gas demand failing to keep up with an expansion in import capacity that has more than doubled since 2015 to approximately 46 mtpa today. Even with Delhi planning to increase the share of gas in the nation’s primary energy mix to 15% by 2030 from around 6% in 2022, a new raft of projects threatens to compound overcapacity. According to Global Energy Monitor’s Global Gas Infrastructure Tracker, India has six import terminals — new developments and expansion projects — under construction with an estimated capacity of 25 mtpa, with a further nine facilities proposed that would add an estimated 50 mtpa. Preliminary oil ministry figures also show a 4% drop in import volumes over January–October this year compared to a year earlier, though the month of October saw an 18% year-on-year rise attributed to higher power demand during India’s festive season. (The Economic Times, Global Energy Monitor, Argus)

South Africa picks controversial Gazprombank as partner for gas-to-liquids refinery: Amid ongoing concerns about Western sanctions, the South African government has approved a recommendation from Petroleum Oil and Gas Corporation of South Africa (PetroSA) to choose Gazprombank Africa as its preferred investment partner for the US$200 million restart of the state-owned company’s refinery at Mossel Bay. PetroSA officials said that, following legal advice, they believed sanctions would not apply if the deal proceeds. The decision comes after a tendering process that heavily favored the local subsidiary of Gazprombank, Russia's third-largest lender by assets. The government’s backing is dependent on a final investment decision (FID) being taken by April 2024. The refinery has been shuttered since 2020 due to a lack of domestic offshore gas resources, and its longer-term future is linked to negotiations between TotalEnergies and PetroSA over a gas supply agreement that could supply feedstock to the plant. Total’s large offshore Luiperd discovery, close to Mossel Bay, is not expected to produce gas before 2030. (Reuters, AmaBhungane)

New evidence reveals how legislators caved to Santos and INPEX on CCS offshoring: Newly-published federal government documents show that a law passed last month by the Australian parliament allowing fossil fuel companies that operate in the country to ship their CO2 waste overseas for disposal resulted from a lobbying onslaught led by Santos and Japan’s INPEX. The Australian energy company chose to strike back at the Canberra government in March this year after being disadvantaged by amended legislation imposing carbon credit purchases on large emitters. Santos’ CEO Kevin Gallagher subsequently targeted Climate Change and Energy Minister Chris Bowen, documents show, and extracted a concession that climate advocates and some parliamentarians have referred to as the “Santos amendment.” The Environment Protection (Sea Dumping) Amendment (Using New Technologies to Fight Climate Change) Bill — which passed last month — tabled by the Albanese government effectively facilitates Santos’ Barossa offshore project by legalizing the company’s plans for the huge Bayu-Undan CCS project in the Timor Sea. Despite concerns that Australian efforts to inject CO2 offshore are failing, as evidenced by the Gorgon project over the last six years, Santos will be able to attempt to sequester CO2 from Barossa’s highly carbon-intensive gas in Timor-Leste waters. Advocates suspect that access to the Bayu-Undan site will allow for the greenwashing of other proposed gas projects in the Northern Territory. (Michael West Media, ABC)

No bounce for Driftwood LNG's prospects after Tellurian ousts Souki: U.S. LNG developer Tellurian has removed its co-founder Charif Souki as chairman of the company’s board in what has been widely viewed as an effort to revive the fortunes of the Driftwood LNG project. The first, US$14.5 billion phase of Tellurian’s export terminal in Louisiana continues to struggle to attract clients and financing. The company’s already highly depressed share price climbed a few percentage points on the news before sliding. This was in spite of the announcement — several days after Souki’s exit — of a management shake-up aimed at ensuring “alignment and continuity” during what CEO Octavio Simoes said was “an important moment for Tellurian as we navigate several key initiatives.” Market analysts were skeptical about the new leadership’s chances of bringing Driftwood to FID. (Tellurian, Reuters, LNG Prime, LNG Investor on X)

Petronas hopeful of bright LNG future, expects medium-term volatility: Ezran Mahadzir, the head of LNG operations at Malaysia’s Petronas, sees market conditions remaining volatile in the medium term until new Qatari and U.S. export projects come online in 2026–27, but longer term, and “[a]t the right price signals,” he foresees market and investment growth due to the fuel being the “cleanest hydrocarbon source.” LNG bunkering is also seen as a growth area, with two Petronas regasification terminals set up for reloading and bunkering operations. The state-owned company has used carbon credits to trade around six carbon neutral LNG cargoes, and the major LNG Canada terminal — in which Petronas has a 25% stake and from which a first cargo will be received in the second half of next year as part of a commissioning program — features a range of measures to reduce emissions alongside feed gas that is, says Mahadzir, “low carbon because it is shale gas.” Petronas has also taken FID on a nearshore 2 mtpa floating export terminal, expected to be operational by the second half of 2027, and is continuing discussions with YPF for the proposed US$10–50 billion Argentina GNL export terminal. (S&P Global)

Fossil fuels on our plates — The dark side of fertilisers, Friends of the Earth France, December 6, 2023. (Pdf)

This 19-page report analyzes the worsening impacts, including spiraling food inflation, that result from chemical fertilizers and their reliance on gas.   

LNG, shipping, and the Amazon of the oceans: Scoping key issues and potential impacts of the massive expansion of LNG in the Verde Island Passage, Center for Energy, Ecology, and Development, December 10, 2023. (Pdf)

This 44-page report outlines the threats posed for a biodiversity hotspot and its inhabitants by a huge proposed buildout of gas infrastructure that would involve a surge in shipping traffic.

Lessons from 2021 to 2023: Inflation management calls for a sustainable energy transition in Europe, Reclaim Finance, December 12, 2023. (Pdf — a summary article is here)

This 14-page report describes how EU gas dependency has driven inflation during the energy crisis and argues that the European Central Bank and others can act to reduce the bloc’s vulnerability through interest rate cuts in support of renewable energy and energy efficiency measures.