Gas boom risks ‘perfect storm’ for climate, economy

PARIS: Global natural gas capacity under construction has doubled in a year according to new analysis that warned yesterday the investment boom in the world’s fastest-growing fuel risks a “perfect storm” of climate chaos and stranded assets. Capital expenditure on liquefied natural gas (LNG) facilities has surged from $82.8 billion to $196.1 billion over the last 12 months, according to a report by Global Energy Monitor.

Following a string of divestments from highprofile LNG funders, the report warned that at least two dozen projects were recently cancelled or are in serious financial difficulty. “LNG was once considered a safe bet for investors,” said Greg Aitken, research analyst at Global Energy Monitor. “Not only was it considered a climate-friendly fuel, but there was substantial governmental support to make sure that these mega-projects were shepherded to completion with all the billions they needed.

“Suddenly the industry is beset with problems,” Aitken said. As the coronavirus pandemic squeezes investors and a growing social movement against new gas projects gathers pace, the report said troubled projects were facing a range of difficulties in sustaining finance.

In the past year Berkshire Hathaway and the governments of Sweden and Ireland were among financiers to drop several billion dollars’ worth of gas project funding, it noted.

While its proponents push LNG as a “bridge fuel” because it is less polluting than coal, a new gas-fired power plant has roughly the same environmental impact as a new coal plant, given the leakage of methane throughout the supply line. Methane is dozens of times more potent a greenhouse gas than carbon dioxide over a 100-year time scale.