By Tsvetana Paraskova of OilPrice.com
The oil and gas industry is expected to spend more than $1 trillion on natural gas supply, driven by demand for gas in Europe, climate campaign group Global Witness said on Monday in a new analysis of Rystad Energy data.
The industry is set to invest $223 billion of the projected spending in the supply of natural gas for Europe by 2033, according to Global Witness’s analysis.
Europe’s gas demand is likely on a structural decline, but the continent needs supply to replace Russian pipeline gas, which was its top source until 2022. Following the Russian invasion of Ukraine and the slashed Russian deliveries of gas, Europe has turned to LNG and increased pipeline supply from Norway and Africa to meet its demand.
“Despite climate and energy experts’ warnings that any new fossil fuel production will push the world beyond 1.5°C heating, $223 billion of this trillion dollar sum is set to go on developing and operating new gas extraction sites to supply Europe,” Global Witness says.
The supermajors ExxonMobil, Shell, TotalEnergies, Equinor, and Eni will be the top spenders of that sum—together, these five companies are on track to spend a combined $144 billion into gas supply for Europe over the next decade, according to Global Witness.
“The numbers are stark – Europe is hurtling down a dangerous path by doubling down on fossil gas, and needs to pull out all the stops to end the age of fossil fuels,” Dominic Eagleton, senior fossil fuels campaigner at Global Witness, said in a statement.
“The European Commission must seize its chance to quicken Europe’s exit from gas and set 2035 as a target date to phase out this costly, crisis-ridden and climate-boiling fossil fuel.”
Just last week, the International Energy Agency (IEA) said that lower prices and higher demand this winter are set to drive a return to strong growth in global natural gas consumption in 2024.
This year, natural gas demand is set for 2.5% growth, following a meager 0.5% increase in 2023, the IEA said in its latest Gas Market Report for Q1 2024.