In addition to the United States, which has done its best to supply as much LNG as possible to its European allies, several African countries have emerged as potential sources of additional natural gas supplies. But they’re not exactly happy about it. “The natural gas here goes to Bonny and Europe to power homes and industries, but we don’t get any benefit from it,” a local community development activist from the Niger Delta told Bloomberg recently. “Nothing’s coming our way.” The comment was part of an in-depth Bloomberg analysis of Europe’s mad dash for natural gas that has seen Nigeria, for example, ship millions of tonnes of LNG abroad while local communities use illegal fuel and wood to heat themselves. Nigeria is far from unique. Mozambique is one of the world’s biggest LNG hopes, and the current energy security concerns of European leaders have made it even more important. But Mozambique is a troubled country. It faces extremist attacks on civilians which, in addition to the tragedy of human deaths, have delayed the development of the country’s natural gas reserves. However, there is a much bigger problem with Europe and its thirst for African hydrocarbons. Hypocrisy. For years, new oil and gas field development and pipeline construction projects across Africa have suffered setbacks due to the reluctance of Western banks and governments to finance new hydrocarbon projects as the crusade against carbon emissions has accelerated. Now, suddenly, the tables have turned with a deafening crash. The G7 is suddenly for new overseas oil and gas investments after pledging to suspend them just last November at COP26. And Europe, the same Europe that advised African countries to focus on renewable energy and keep oil and gas in the ground, is now asking for gas. The International Energy Agency has also joined the debate, adding urgency to the continent’s hydrocarbon development prospects. In a report released last month, the IEA said African gas producers had limited time to commercialize their resources, saying those producers needed to act quickly because the world would only need gas for a short time before moving to low carbon emissions. Apparently, the large-scale development of African natural gas resources was not contrary to the goals of the Paris Agreement, according to ILO Secretary-General Fatih Birol. He told Reuters in June that “if we make a list of the top 500 things we need to do to meet our climate goals, what Africa is doing with its natural gas is not on that list.” He also said that if African countries with natural gas reserves convert all these reserves into production, that production could reach 90 billion cubic meters per year by 2030, of which two-thirds could be used domestically and the rest to be exported. That would be 30 billion cubic meters for export, equivalent to what the United States and Qatar, combined, can supply annually to Europe. For context, Russian gas exports to Europe totaled 158 billion cubic meters last year. Of course, to do this, energy companies and other finance providers will have to step up their commitments to reduce emissions. They will probably do just that, on the basis that “it’s only for a while,” as Germany’s government said when it decided to restart coal plants. However, there are environmental concerns about the long-term sustainability of natural gas production in Africa itself. “It is difficult to predict how long this opportunity will exist, especially in the context of the energy transition, the world is moving away from fossil fuels,” said Silas Olan’g, Africa co-director of the Natural Resource Governance Institute. York-based environmental NGO, recently told NPR. “I think they’re kind of misleading most governments,” he said. The situation is quite complicated. On the one hand, some, especially the leaders of African countries with oil and gas reserves, believe that these countries deserve the opportunity to exploit these reserves in the way that Western countries have done, which has been instrumental in their development in developed economies. Whereas a year ago, the West would have frowned on this argument, now it is in the West’s interest to support it wholeheartedly, so it gets a piece of the gas pie—and oil, why not. But on the other hand, there are environmentalists in Africa as well, who worry that the continent’s gas-rich countries may be falling into a trap of stranded natural gas assets. It is hard to dispute this concern when so many think tanks operating in the same field as NRGI warn of such stranded assets. Of course, the current pivot by Europe and the US seems to contradict the stranded assets argument and suggests that gas-rich African countries such as Nigeria, Senegal, Angola and Equatorial Guinea have plenty of time to utilize their resources. If the U-turners are willing to provide the money for it. By Irina Slav for Oilprice.com More top reads from Oilprice.com
