Exploring the Boom in New Gas Projects

by bernt & torsten

A significant surge in new gas projects valued at $200 billion is anticipated to potentially trigger a substantial environmental impact comparable to the annual carbon emissions of all existing coal-fired power plants. Major financial institutions have funnelled $213 billion into proposed initiatives to construct facilities that facilitate the global trade of liquefied natural gas (LNG). A report highlights that these developments might pose an even greater threat than coal energy. A sharp increase in projects to enhance the global gas trade has been identified, spurred by a transition from coal to gas in emerging markets and the impact of geopolitical tensions causing disruptions in gas supply to Europe.

In recent years, the completion of eight LNG export terminal projects and 99 import terminals has raised the world’s export capacity by 7% and import capacity by 19%. Furthermore, LNG developers are planning 156 new terminal projects worldwide by 2030, including 63 export and 93 import terminals. The report cautions that methane emissions from these facilities could generate around 10 gigatonnes of greenhouse gases by the decade’s end, rivalling the emissions from all active coal plants globally.

A climate advocacy group argued that investments in LNG projects might jeopardize the objectives of the Paris Agreement as banks and investors continue to inject billions into ventures that threaten climate stability. The findings have intensified concerns over investments in the gas sector leading to oversupply, hindering international climate goals. The International Energy Agency (IEA) recently projected that the global LNG capacity is set to increase by nearly 50% by 2030, surpassing projected demand in all scenarios, potentially resulting in reduced fossil fuel prices and increased reliance on cheaper gas instead of renewable alternatives.

The IEA forecasts a significant drop in the price of gas imported into the EU from a record high in 2022 to much lower levels by 2030, following recent growth in gas projects. The climate advocacy group insists that LNG, as a fossil fuel, has no place in a sustainable future and calls for banks and investors to halt support for new LNG developments immediately. Despite most leading banks adopting "net zero" targets, the report notes a lack of specific policies regarding LNG financing, allowing continued investment despite looming climate challenges.