LNG boom to destroy Earth

Via Global energy Monitor:

Through a massive increase in portside infrastructure, floating offshore terminals, and oceangoing LNG vessels, the natural gas industry is seeking to restructure itself from a collection of regional markets into a wider and more integrated global system. If successful, this transformation would lock in much higher levels of natural gas production through mid-century—a seeming win for the industry—except that the falling cost of renewable alternatives will make many of these projects unprofitable in the long term and put much of the $1.3 trillion being invested in this global gas expansion at risk. Such an expansion is also incompatible with the IPCC’s warning that, in order to limit warming to 1.5°C above pre-industrial levels, gas use must decline 15% by 2030 and 43% by 2050, relative to 2020. This report provides the results of a worldwide survey of LNG terminals completed by the Global Fossil Infrastructure Tracker. The report includes the following highlights:

■ Methane, the chief component in natural gas, is responsible for 25% of global warming to date.

■ Measured by global warming impacts, the scale of the LNG expansion under development is as large or greater than the expansion of coal-fired power plants, posing a direct challenge to Paris climate goals.

■ Due to falling costs of renewable alternatives, the expansion of LNG infrastructure faces questions of long-term financial viability and stranded asset risk. However, since only 8% of terminal capacity under development has entered construction, there is still time to avoid overbuilding.

■ At least 202 LNG terminal projects are in development worldwide, including 116 export terminals and 86 import terminals.

■ LNG export terminals are under development in 20 countries, of which Canada and the U.S. account for 74% of proposed new capacity. If built, LNG terminals in pre-construction and construction would increase current global export capacity threefold.

■ LNG import terminals are in development in 42 countries, of which 22 have no current import capacity. Capacity expansion is focused on the Asia Pacific Region.

■ Overall, LNG terminals in development represent capital outlays of $1.3 trillion, of which 70% is for North American export terminals and 6% is for Asia Pacific import terminals. In terms of capital outlays for import and export terminals combined, the top ten countries are United States ($507 billion), Canada ($410 billion), Russia ($86 billion), Australia ($38 billion), Tanzania ($25 billion), China ($24 billion), Indonesia ($24 billion), Mozambique ($23 billion), Iran ($21 billion), and Papua New Guinea ($17 billion).

Full report.

David Llewellyn-Smith

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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