"Gas in Africa: Still a \u2018transition fuel\u2019?"

" \n Gas in Africa: Still a \u2018transition fuel\u2019? \n \n\n \n The science is clear: to limit global warming to 1.5\u00b0C \u2013 beyond which some climate impacts will become irreversible and self-reinforcing \u2013 new oil and gas fields should no longer be being licensed for development , and we should be transitioning away from burning coal, oil and gas as quickly as possible across all sectors. \n \n\n \n Gas may only produce half the emissions of coal when burned, but it is now the fastest growing source of fossil fuel emissions. At almost every step of its supply chain natural gas production also leaks methane, which is a greenhouse gas (GHG) 86 times more potent than carbon dioxide that has driven around a quarter of global warming to date. \n \n\n \n For the world to reach net zero by 2050, natural gas use must decline by an annual average of 3% from 2020 to 2050, shows the\u00a0 International Energy Agency\u2019s net-zero pathway . By contrast, the latest Statistical Review of World Energy from BP shows that gas consumption reached record highs in 2021.\u00a0 \n \n\n \n \n \n\n \n \n \n\n \n A partnership between Microsoft and Roche, leveraging AI and cloud solutions, is promising to redefine healthcare possibilities in the Middle East. \n \n\n \n In December 2021, Swiss pharmaceutical and diagnostics giant Roche agreed to a Memorandum of Understanding (MoU) with Microsoft. The aim is to use the power of AI and cloud technology to improve outcomes for patients across the Middle East, and help healthcare providers embrace early adoption of new diagnostic tools. \n \n\n \n Beginning in Egypt, the collaboration is due to be rolled out across the region, with countries including KSA, UAE, Kuwait, Oman, Bahrain, Qatar, Lebanon, Jordan, Iraq, and Syria ultimately feeling the benefit. \n \n\n \n For those of us in Europe, the recent heatwave brought home why we need to reduce our GHG emissions and bring climate change under control \u2013 but the impacts of climate change are not felt equally. In Africa, global warming is happening twice as fast as the global average, and particular vulnerabilities like a lack of piped water or shelter, poor public health and lack of education all further increase the risk. \n \n\n \n \n \n\n \n Despite all this, gas is very much not on its way out. In June 2022, spurred on by energy security fears following Russia\u2019s invasion of Ukraine , the G7 reaffirmed its commitment to end public finance for fossil fuel projects \u2013 but there was a loophole. \u201cWith a view to accelerating the phase out of our dependency on Russian energy\u2026 investment in [LNG] is necessary,\u201d the G7 said. Soon after, Japan claimed it would \u201cmaintain upstream developments that contribute to [energy security]\u201d, and Germany\u2019s Chancellor Olaf Scholz said Germany intends to \u201cintensively\u201d pursue gas projects in Senegal. \n \n\n \n \u201cInvesting in new gas infrastructure is not a viable strategy to reduce Russian fossil fuel imports,\u201d said Laurie van der Burg from the NGO Oil Change International (OCI) at the time. \u201cThese projects\u00a0 take years to build \u00a0and do not support energy security in the long run. Renewable energy and efficiency solutions can be deployed faster, better serve development and\u00a0 energy access needs , and do not come with the\u00a0 stranded assets \u00a0and financial stability risks of fossil gas.\u201d \n \n\n \n It is easy to point a finger when rich countries are reluctant to move away from fossil fuels, given their wealth and disproportionate use of the world\u2019s carbon budget, but for less wealthy regions \u2013 often former colonies that have been trying to develop economically for decades \u2013 the situation is more complicated. \n \n\n \n Take Africa. This is a continent where\u00a0 more than 600 million people still lack access to electricity \u00a0and 930 million people lack access to clean cooking fuels. Its development needs both now and in the future are profound: Africa accounts for 17% of the world\u2019s population but only 5.9% of the world\u2019s energy supply. By 2100, its population is expected to be more than three times larger than in 2020. \n \n\n \n Natural gas remains \u2018key\u2019 for Africa's development , both to generate power and as an export product, said the Mo Ibrahim Foundation, a leading African development think tank, in a report in May 2022. That same month, ministers from seven large African nations issued a communiqu\u00e9 calling for the \"deployment of gas as a transition fuel\" , followed in time by \u201cthe long-term displacement of gas by renewable energy and green hydrogen for industrial development\u201d. \n \n\n \n Given the development needs of Africa, is there scope for the buildout of fossil assets, and at the same time, can climate catastrophe still be avoided? \n \n\n \n Gas addiction is a demand problem \n \n\n \n Natural gas has three mainstream uses to the economy: it provides electricity when burnt, it is used as an industrial feedstock and it can provide export revenue when extracted and sold abroad. Many people in rich countries also use gas for cooking and heating, although this is less prevalent in the Global South where gas networks are less developed. \n \n\n \n Arguments for gas-fired electricity are weak across most of the world when placed against the massive\u00a0 climate risk of continued fossil fuel use . There are\u00a0 readily available alternatives in the form of renewables , which not only produce far less emissions but are also cheaper. \n \n\n \n While recent events have seen the cost of fossil power soar, the International Renewable Energy Agency finds that the global weighted average cost of new, utility-scale solar PV projects declined by 88% between 2010 and 2021 , and that of onshore wind by 68%. \n \n\n \n Establishing gas-fired power networks in many African countries would also be impractical in the short term, given how much of the continent remains disconnected from the grid. A total of 17 African countries have more off-grid diesel generator capacity than on-grid power generation capacity \u2013 and off-grid solar would be a better alternative in most cases than a large new gas-fired power plant. \n \n\n \n Finding alternatives for the other uses of gas is more complicated. Hydrogen and ammonia \u2013 which are used for fertiliser \u2013 can be produced using electrolysers powered by renewables, but this technology remains expensive and a large-scale green hydrogen industry is yet to be established in any part of the world . Ultimately, industrial processes that do not depend on fossil fuels will be enacted, but such plans remain a distant prospect for most African nations. They are often still seeking to establish an industrial base in the first place. \n \n\n \n Industrialisation and development require money, and that is where fossil fuel exports come in. Many developing countries suffer from chronic underfunding in areas like healthcare, infrastructure and education, often since independence from a European colonial power. Producing fossil fuels offers the possibility of new income to emerge from this low-income trap, as these countries are then able to sell them to the rich parts of the world that remain \u201caddicted\u201d to them, argues Sarah Colenbrander, director of climate and sustainability at think tank the Overseas Development Institute (ODI). \n \n\n \n \"The West cannot punish countries that are trying to use our gas addiction to pay for a certain standard of living we have long enjoyed,\u201d says Colenbrander. \u201cThere needs to be a bit more nuance about which countries are actually climate villains and which countries are climate victims.\u201d \n \n\n \n Africa produces only around 4% of the world\u2019s GHG emissions, with about 80% of those coming from just six countries: Algeria, Egypt, Libya, Morocco, Nigeria and South Africa. Moreover, for those countries producing gas, the vast majority is exported: in Mozambique, it is 75%, while in Angola it is 85%, according to the Mo Ibrahim Foundation. \n \n\n \n \u201cIt is true that to limit the global temperature rise to 1.5\u00b0C we need to stop producing fossil fuels, but the fact is we are currently heading for 3\u00b0C,\" adds Colenbrander.\u00a0 \n \n\n \n \u201cClimate change is already taking a catastrophic toll on many countries, from Mozambique to Timor-Leste, and its impacts will only become more severe as temperatures rise. The priority of these governments is to both develop and to help their citizens adapt to the shocks and stresses of climate change. If we also expect these lower-income countries to pursue clean development and leave fossil fuels in the ground, rich countries will need to step up much more to cover the incremental costs.\u201d \u00a0 \n \n\n \n \u201cWe are not responsible for global climate change and we should not take full responsibility for mitigating climate change, if those who are actually responsible continue to fail to act,\u201d says Oluwasola Omoju, a research associate at ODI based in Nigeria. \n \n\n \n The risk of pursuing gas in Africa \n \n\n \n When viewed through an equity lens, there are certainly grounds for Africa to extract its gas, but from a climate change perspective \u2013 as for any petrostrate still extracting oil and gas \u2013 it remains hard to justify. This climate risk also means that new gas investment comes with economic risk . Any fossil-linked assets risk becoming stranded in a world planning for a net-zero economy. \n \n\n \n \u201cIt is also important to consider if economic plans are compatible with future climate targets,\u201d says Antony Froggatt at the think tank Chatham House. \u201cIt is likely that the consequences of climate change will become more apparent, in which case it is definitely conceivable that in five to ten years countries will have accelerated decarbonisation targets.\u201d \n \n\n \n The risk of new oil and gas exploration is much bigger for poorer countries, adds Lucile Dufour from the International Institute for Sustainable Development (IISD), another think tank. \u201cThese countries are often already highly indebted [\u2026] and history shows us that time and again income raised does not benefit local populations.\u201d \n \n\n \n Countries that have discovered oil and gas have tended to be hit by the \u201cresource curse\u201d, which means they find themselves unable to use their new wealth to develop and ultimately diversify their economies. \n \n\n \n Take the example of Mozambique, a country that first discovered gas off its coast in 2010. The plan was for export revenues to spur industrialisation, with the country becoming middle-income by the 2040s; the IMF projected that Mozambique could become the world\u2019s third-largest producer of LNG by the end of the 2020s. Instead, conflict and corruption means the promised benefits have never materialised. French energy giant Total has now paused its flagship LNG project indefinitely due to the ongoing insurgency in the province of Cabo Delgado , which is where the gas deposits were found. \n \n\n \n Mozambique\u2019s external debt as a proportion of GDP has trebled since that initial gas discovery, and Mozambicans are now poorer than they were a decade ago , with 75% spending less than $1 per day. \n \n\n \n There is also the historic trend of money raised ending up in the hands of a country's ruling elite, or shareholders based overseas. Some 66% of projected new oil and gas production in the next 30 years is owned by multinational corporations outside of Africa , reported Oil Change International last year. \n \n\n \n \u201cExploiting Africa\u2019s gas\u2026 does not support the African ambition of ending energy poverty, achieving prosperity and building resilience to the climate chaos,\u201d argues Bhekumuzi Bhebhe from the Kenya-based think tank Power Shift Africa. \u201cInvestments in large gas production will lock African countries into the gas sector for decades and reduce available public and private finance for cleaner and more job-creating renewable energy projects.\u201d \n \n\n \n \u201cThe world is moving to a largely renewables-based system even faster than before ,\u201d says Lisa Fischer from the think tank E3G. \u201cWhy would any country plan their economic model on a non-competitive alternative?\u201d \n \n\n \n An alternative development path to gas \n \n\n \n There will be opportunities for producer economies in a net-zero future. Critical minerals such as lithium, graphite and copper will be in high demand and the Democratic Republic of Congo \u2013 which produces 70% of the world\u2019s cobalt, a mineral vital for electric applications \u2013 is one country that could benefit (disregarding for a moment the countless human rights abuses associated with the country's mining industry). But minerals required for the manufacture of technology that can used for decades will likely never provide countries with similar income to oil and gas, which is currently constantly required in vast quantities to keep the global economy running. \n \n\n \n For countries to feel able to end fossil fuel production, they will need to be able to access other revenue streams that can help them build up their energy systems and develop their economies cleanly. This would likely mean finding ways to redistribute capital from the Global North to the South in other ways. \n \n\n \n Back in 2009, wealthy countries promised $100bn a year in climate finance by 2020. Despite a broad definition of what \u2018climate finance\u2019 is \u2013 including\u00a0 public and private sources, provided t hrough \u00a0loans, guarantees, export credits, bilateral funding and funding from donor governments via multilateral bodies \u2013 this figure is\u00a0 widely acknowledged to never have been met . \n \n\n \n One piece of positive clean development news came at COP26 in Glasgow, when 39 countries and institutions pledged to end public financing of fossil fuels. G7 environment ministers agreed to pretty much the same in May 2022, adding Japan, the world\u2019s second-largest public funder of fossil fuels after China, to the pledge. This a major realignment of public energy budgets from the world's largest economies, says Dufour, which will open up billions in financing that until now had been directed to fossil fuels. \n \n\n \n Some $39bn of former oil and gas finance is now likely to be re-ddirected from fossil fuels to other projects,\u00a0 estimates a recent report from the NGOs OCI, IISD and Tearfund . This should help shift even larger flows of finance away from fossil fuels, as private financial flows tend to follow where public finance is directed. \n \n\n \n However, a lot of work still needs to be done. The same report finds that most public finance institutions and agencies that signed up to end fossil fuel funding at COP26 still do not have comprehensive policies in place to ensure this is taking place, let alone scale energy transition financing in line with what will be required. \n \n\n \n The EU\u2019s Global Gateway and the G7\u2019s Partnership for Global Infrastructure and Investment are new initiatives that could ultimately scale up financing for clean infrastructure in the same way that China\u2019s Belt and Road Initiative did with dirty infrastructure like coal plants \u2013 but these are \u201cnothing more than high-level investment frameworks\u201d for the time being, says OCI\u2019s van der Burg. They have yet to deliver on-the-ground impact. \n \n\n \n Meanwhile, the African Group of Negotiators and 24 other \u201clike-minded\u201d developing nations have called on high-income nations to mobilise at least $1.3trn in climate finance \u2013 which would cover mitigation, adaptation, as well as sustainable development more broadly \u2013 by 2030. Rich countries would be able to find this money if they wish to: some $16trn was spent on post-Covid stimulus, with just 20% spent in developing countries. \n \n\n \n Countries are nowhere close to delivering the $1.3trn figure, which means that for the time being, low-income countries have few alternative development pathways open to them. If gas is discovered, the hard truth is that a rich government is in no position to tell a poorer government what they can or cannot do with that resource. \n \n\n \n It remains in the hands of rich nations to turn the climate finance situation around, with all eyes now turning to COP27 in Egypt to see if they will finally do so. \n "

"Gas in Africa: Still a \u2018transition fuel\u2019?"

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