How Gas Corporations Capitalise from War in Ukraine
The 2022 Russian invasion of Ukraine shocked the world. It quickly resulted in an energy crisis as European States tried to secure non-Russian energy supplies for the winter.
What followed was one of the most blatant examples of ‘shock doctrine,’ where gas operators quickly shifted their public messaging and lobbying from “energy transition” to “energy security” and cynically used the opportunity to frighten governments into massive, unneeded investment into and expansion of fossil gas imports and infrastructure. These tactics have resulted in a short-term energy supply crisis being answered by long-term fossil fuel lock-in in the form of new infrastructure, decades long contracts, and environmental impact in the US, as well as in the EU. This overreaction jeopardises the EU’s and US’ energy transition and their agreed climate goals.
The shift was instant and effective. The REPowerEU plan, the EU answer to the gas crisis, included around €10 billion ($20.9 billion) in funding for gas infrastructure. Eight liquefied gas terminals are under construction, and 38 more have been proposed.
Replacing Russian pipeline gas led to a surge of shipments of liquefied gas (also known as LNG) from the US. As a result, gas infrastructure operators, portfolio traders, and gas companies have declared that imported liquefied gas is the answer to the crisis and will remain so for decades to come. This LNG expansion threatens the health of communities living near these export terminals, extraction sites, and pipelines, while potentially pushing planet warming emissions past levels to meet global climate goals.
Shareholders of the world’s top five oil and gas companies saw record profits of €192 billion ($209 billion) and distributed $102 billion (€93 billion)in the form of dividends and share-buy-backs in 2022.
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