July 13, 2020 Read More →

Gas bubble worsens with “increasingly sophisticated and effective” protests


Earlier this year, Warren Buffett’s Berkshire Hathaway pulled out of a proposed liquefied natural gas (LNG) export terminal in Saguenay, Quebec. The project developer cited the “current Canadian political context” as the reason why Berkshire Hathaway bailed on them, including recent rail blockades led by hereditary chiefs of the Wet’suwet’en First Nation in British Columbia.

The rail blockades targeted an entirely separate fossil fuel project — TC Energy’s Coastal GasLink pipeline, which would cross unceded Wet’suwet’en territory. The protests rapidly spread around the country, with students, environmental groups, and other First Nations joining the rail blockades in solidarity.

While far from British Columbia, the actions spooked investors in Energie Saguenay LNG. Without Berkshire Hathaway’s promised $4 billion investment, the project has stalled.

As scrutiny over natural gas intensifies, “protests against LNG projects are becoming increasingly sophisticated and effective,” Global Energy Monitor, an NGO that tracks worldwide fossil fuel projects, said in a new report.

However, others warn that the downturn is not transitory. Global Energy Monitor warned that the “gas bubble” could pop. Massive LNG projects carry multi-billion-dollar price tags, with very aggressive assumptions about demand growth. China stands at the very core of every long-term demand forecast. If China pursues alternatives, or even finds gas supplies via pipeline from its neighbors, the rosy scenarios could badly disappoint.

“China is like the single point of failure for the LNG industry,” Clark Williams-Derry, an energy finance analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), told DeSmog. “In order to really inflate this market, it doesn’t work without China.” 

[Nick Cunningham]

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