The U.N. climate summit in Glasgow last year ended with a resounding repudiation of fossil fuels, with countries including the United States signaling that it would be a costly mistake to move forward with big new oil, gas and coal projects.
The mounting calls to limit investment in such ventures seemed to resonate: Many major projects had stalled, struggling to line up financing as the world looked toward a future of cleaner energy.
But a year later, the fossil fuel industry is experiencing a remarkable rebound, with sudden momentum behind more than 80 projects that range from coal-fired power plants to hulking gas export terminals, many of which could lock the world into decades of new greenhouse gas emissions.
The backsliding is occurring as nations grope for alternatives to Russian natural gas, cut off by sanctions after the invasion of Ukraine. It will be a major point of tension at this year’s global climate summit, which begins in Egypt on Sunday. It throws into further jeopardy a global carbon budget crafted to avert climate chaos by threatening to deluge countries with far more fossil energy than they need to replace supplies from Russia.
“If all of that new infrastructure is built and used until the end of its lifetime, there is no chance of meeting the goals in the Paris agreement,” said Niklas Hohne, founder of the NewClimate Institute think tank and an emissions scholar at Wageningen University in the Netherlands, referring to the effort by global leaders to limit warming to 1.5 degrees Celsius to avert the most catastrophic consequences of climate change.
“The plan was not to build any new infrastructure, because everything new you build has to run for 20 or 30 years to pencil out, long past the point we want to be off fossil fuels,” Honhe said. “But now all these projects are on the table again.”
This is true not just in Europe, where there are seven new natural gas projects under construction and another 33 in various stages of planning, according to the nonprofit Global Energy Monitor. Another two dozen projects also are being pursued in the United States. Global investment in new natural gas infrastructure is projected to surge to $42 billion in 2024, according to the market research firm Rystad Energy, a jump of 50% above what it is this year. The result is that the worldwide supply of liquefied natural gas will nearly double by 2030, a volume that climate activists warn pushes the supply past what is needed to replace Russian gas deliveries.
Worries about filling the energy void created by sanctions on Russia have led European leaders to sign several deals for new gas contracts in sub-Saharan Africa – which Europe and the U.S. for years tried to dissuade from pursuing large-scale, climate-unfriendly fossil infrastructure over cleaner alternatives such as solar and wind power. Europe’s energy deals in Africa include accelerating plans to transform the nation of Mozambique, which until this year had never shipped natural gas to Europe, into a global hub for fossil fuels following the discovery of vast deposits before the pandemic.
The global warming impact of the projects, many of which won’t come online for years, would be immense and would directly conflict with the ambitious short-term emissions goals Europe and the U.S. only recently set for themselves. The U.S., which already exports more natural gas abroad than any other country, will be positioned to ship nearly 50% more with the pending completion of just three projects that are far along in construction, according to the U.S. Energy Information Agency.
While it is unclear how many projects in the U.S. and elsewhere will ultimately get all the regulatory approvals and investment needed to move forward, an analysis by the advocacy group Food and Water Watch tallies the potential climate impact if every natural gas project on the table gets built. By 2030, the “lifecycle footprint” – which includes the impact of extracting, processing and shipping it all, plus the greenhouse gas effects when it is burned for energy – would equal the emissions of 621 million cars on the road for a year. It would be like building 100 new coal plants, according to the group.
All the building plans threaten to undermine Europe’s recently approved REPowerEU initiative, which aims to cut use of natural gas 41% by 2030, a crucial target for limiting global warming. An analysis by the European economic think tank Bruegel revealed a severe mismatch between that goal and the amount of fossil fuel infrastructure European countries are endeavoring to build and support.
Meanwhile, energy transition analysts are keeping a close watch on the surge in Europe’s use of coal, which is meant to be a stopgap until cleaner replacements for Russian gas are available but could become a significant climate problem if the plants stay open for years. In Germany alone, 21 coal-fired power plants are being reopened or have had their closings postponed to help the country through the next couple of winters. That includes such plants as the one in Bexbach, which hadn’t burned coal in a decade.
Though natural gas burns cleaner, it is potentially a much bigger climate problem because the cost of new infrastructure can quickly stretch into the billions of dollars, creating economic pressure to keep the facilities operating for decades. European countries are not confident that the floating gas import terminals they are installing that can be moved elsewhere after a few years will be adequate. They are also moving ahead with major new land-based infrastructure.
Consumer groups are as unnerved by the current trend as environmentalists, warning of the risk that ratepayers and taxpayers get stuck paying for massive projects that, long before the end of their useful life, are mothballed to meet climate goals.
Bruegel’s projections show the amount of natural gas flowing in the E.U. could nearly double the amount countries there should be using under the REPowerEU plan by the end of the decade.
Such data points have some world leaders sounding an alarm. “For every $1 invested in low-carbon energy supply, $1.10 is invested in fossil fuels. Go figure,” John F. Kerry, the U.S. climate envoy, said at a recent event at the Council on Foreign Relations. “The math and the science unequivocally make clear we just cannot hit our targets unless we dramatically change that ratio.”
The recently published U.N. emissions gap report, which warned the world is fast blowing past its carbon budget, highlighted the “lock-in” of fossil fuel infrastructure as one of the threats facing the planet. “Decisions made today can define emissions trajectories for decades to come,” the report warned.
Among the projects that could drive such emissions is the proposed Rio Grande LNG terminal in Texas, which the Sierra Club notes would be bigger than New York’s Central Park at a size of 984 acres. It would sit right next to another proposed facility in the Brownsville Ship Channel, called Texas LNG, that is four times the size of Disneyland.
The Rio Grande project is one of many that had stalled before the Ukraine invasion upended the energy landscape, with a French power company lined up to purchase the gas pulling out of a tentative deal under pressure from European government leaders concerned about the climate impact. The project has since come roaring back, with that same French energy company entering into a purchase agreement that extends until 2041.
World leaders pushing robust action on climate change are banking on investors getting cold feet and pulling the plug on some of these projects as they weigh the risk that rapid deployment of renewable energy could turn them into costly “stranded assets.”
The International Energy Agency, for example, projects the fervor for fossil fuels will quickly fade. Few of the planned developments, IEA Executive Director Fatih Birol said, make economic sense in an era when the cost of solar and wind installations have plunged.
“Many of these projects, I believe, will stay in the box,” Birol said. His agency’s new World Energy Outlook report shows clean technologies advancing so rapidly that overall fossil fuel use will peak within a few years and then be in permanent decline.
Yet big fossil energy companies are moving ahead, assuring investors that there will be a market for the fuel. The reception they are getting from regulators is far more solicitous than before the invasion of Ukraine, and in many cases large public subsidies for projects are on the table, despite a pledge by every Group of 20 nation to stop subsidizing electricity powered with fossil energy. Every one of those countries continues to subsidize it, according to the U.N. emissions gap report.
In the U.S. and Europe, industry and political leaders are justifying the expansions by projecting that much of the infrastructure will be converted to greener uses within a few years. Today’s new gas terminals and pipelines, the reasoning goes, will be tomorrow’s delivery system for processing and delivering green hydrogen, fuel that can be made with zero emissions if companies can figure out how to produce it affordably at scale.
Many of these plans, however, are aspirational and overlook significant logistical challenges, as well as market and political pressures, that could enable gas to flow indefinitely.
“There is this desire to make sure new hydrocarbon infrastructure is transition-ready to handle other fuels,” said Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia University. “I don’t think we’ve kicked the tires enough to make sure that is proven reality and not hype.”
“The important question is: How can we use this energy crisis to accelerate and not decelerate the transition?” he said.
It is a particularly challenging conundrum for Europe, where lawmakers and regulators are trying to find a path to replacing Russian gas without adding new long-term sources of emissions. The impact of the path they take can be hard to chart, amid conflicting projections of climate fallout.
Officials do not even have a clear picture of how much of the Russian gas Europe no longer wants will make its way elsewhere. Much of it flows into pipelines from Siberia, and diverting it to places such as India and China that might be open to buying from Russia would be an extremely costly undertaking.
“One of the big questions is whether Russia can export as much as it did before,” said Georg Zachmann, an energy and climate fellow at Bruegel. “If Russia’s export decline is equal to what Europe imports from other places in the world, then the climate impact should be limited.”
At the moment, the number of projects with momentum far outpaces what is needed to replace that Russian gas. Since Russia invaded Ukraine, U.S. energy companies have entered into 32 new binding contracts for the sale of natural gas, according to the nonprofit Global Energy Monitor. Additionally, five large proposed Gulf Coast LNG export terminals that are still in the planning stage and had no deals locked down before the war have since secured contracts to sell gas abroad.
Among the resurgent gas projects in Europe is one planned for along the Elbe River near Hamburg that appeared doomed only late last year.
A key partner in the project had to bail after its plans to supply Germany with gas extracted and shipped from Canada were nixed by the Canadian government, which judged the $14 billion endeavor a climate hazard. Canada’s environment minister called the blueprints to export natural gas “in no way justifiable.”
Now Stade is among the many revived fossil fuel developments around the globe back on a fast track, with Germany scrambling to build new terminals and fracked natural gas from the U.S. replacing the Canadian fuel supplies that were blocked.
At the same time, even dormant Russian gas fields still pose a climate threat.
Shutting down gas fields is itself an extensive and costly process, with large amounts of emissions potentially seeping from the facilities for years. Those emissions would compound the climate effects of all the new gas infrastructure outside Russia.
Oil companies say they could mitigate those effects with the installation of carbon capture machinery. Developers of the Rio Grande project, for example, are promising to wipe out more than 90% of emissions at their proposed Texas facility by using an industrial process to trap the greenhouse gases and store them underground. The oil company Occidental declared in March that it has a deal to start selling what it calls “net-zero oil,” claiming its use of carbon sequestration techniques will wipe out the emissions normally associated with oil production.
Climate activists say such promises ignore the emissions created when the fossil fuels are shipped and ultimately burned by customers, as well as the reality that carbon capture technology remains a work in progress. Some of the biggest demonstration projects so far have not met their emission reduction targets.
“The idea that we can do a little more gas and then move onto renewables does not work anymore,” said Hohne, the NewClimate Institute founder, who was a contributor to the U.N. emissions gap report. “There is no more space in the carbon budget for that like there was 10 or 20 years ago.”
Send questions/comments to the editors.
