Results of a new survey just released by the Global Energy Monitor (GEM) has revealed that massive expansion of global gas pipeline networks have been identified as a major threat to climate goals and creates a $485.8 billion stranded assets risk.
After a COVID-19-related drop in pipeline completions in 2021, the gas industry and gas-positive countries led by China, India, Russia, Australia, the United States, and Brazil are pushing ahead with plans to commission tens of thousands of kilometers 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 should quickly transit 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 ºC net-zero scenario.
Read Also: Industrial court orders Kaduna refinery to pay ex-staff pension arrears
Giving details of its key findings, the survey indicated that globally, there are 70,900kms of pipelines in construction, with additional 122,500 km in pre-construction development, with a combined cost an estimated $485.8 billion in capital expenditure.
“In 2021, global pipeline commissioning 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 and 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 survey added.
It said 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.
It also revealed that India ranks second among global leaders in gas pipeline development, with 16,200kms under construction and another proposed 2,200kms, representing a stranded asset risk of $14.7 billion.
A research analyst at GEM, Baird Langenbrunner, said 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 600kms are currently under construction, representing an estimated stranded asset risk of $18.6 billion.
“In the United States, rising opposition from NGOs and activists and shifting legal and regulatory landscape contributed to the defeat of several high-profile pipelines in 2020 and 2021.
“However, there are still pipelines costing an estimated $47.6 billion being developed, and the U.S. 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-19 than a recognition that gas contributes hugely to the climate crisis.
“Looking ahead, the fact that nearly half-a-trillion dollars of gas pipelines are in development makes no sense economically, as many of these projects will become stranded assets as the world transitions to renewables.”
