New Delhi: A massive expansion of the global gas pipeline network threatens climate goals and creates a $485.8 billion stranded asset risk, according to a new survey by Global Energy Monitor (GEM).
After a Covid-19-related drop in pipeline commissionings in 2021, the gas industry and gas-positive countries led by China, India, Russia, Australia, and the US are pushing ahead with plans to commission tens of thousands of kilometres of gas pipelines in 2022.
This expansion is occurring despite the International Energy Agency (IEA) warning that gas usage must peak within the next few years and that the world must quickly transition from fossil fuels to renewables.
For 2021, GEM’s survey found that cancellations and delays in some parts of the world were offset by rapid expansions elsewhere, particularly in Asian countries, perpetuating a dangerous status quo incompatible with the IEA’s 1.5 degrees Celsius net-zero scenario.
Globally there are 70,900 km of pipelines in construction, with an additional 122,500 km in pre-construction development.
Together these would cost an estimated $485.8 billion in capital expenditure.
In 2021, global pipeline commissionings fell to 6,500 km, their lowest level since 1996, but much of this decline was due to the economic and logistical chaos caused by the Covid-19 pandemic.
With 36,800 km under construction and scheduled to be commissioned in 2022, and a further 59,500 km scheduled to be commissioned between 2023-2030, the global gas network is poised for a large, rapid expansion.
China leads the globe in gas pipeline development, with 26,300 km of gas transmission pipelines in construction and an additional 29,800 km in pre-construction development, amounting to a total stranded asset risk of $89.1 billion.
The Chinese pipeline boom is happening under the direction of the newly created conglomerate PipeChina, the world’s second-largest developer of gas pipelines behind Russia’s Gazprom.
India ranks second among global leaders in gas pipeline development, with 16,200 km under construction and a further 2,200 km that have been proposed, representing a stranded asset risk of $14.7 billion.
Sticking to its 2020 plan for a “gas-fired recovery” from the Covid-19 pandemic, Australia is developing 12,200 km of gas pipelines, though just 600 km are currently under construction. These pipelines represent an estimated stranded asset risk of $18.6 billion.
In the US, rising opposition from NGOs and activists and a shifting legal and regulatory landscape contributed to the defeat of several high-profile pipelines in 2020-21; however there are still pipelines costing an estimated $47.6 billion being developed, and the US is expected to become the world’s leading exporter of gas in 2022.
“A slowdown in gas pipeline development in 2021 was unfortunately more about Covid than a recognition that gas is contributing to the climate crisis,” said Baird Langenbrunner, a research analyst at GEM.
“Looking ahead, the fact that nearly half-a-trillion dollars of gas pipelines are in development make no sense economically as many of these projects will become stranded assets as the world transitions to renewables.”
–IANS
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