Press Release

Report: USD 1.4 trillion fossil fuel buildout jeopardizes Africa’s economies, climate, and communities

October 13, 2021

New analysis details why a just energy transition in Africa requires an end to new oil, gas, and coal extraction projects

FOR IMMEDIATE RELEASE

October 14, 2021

Contact:
Aneesa Khan, aneesa@priceofoil.org
Bronwen Tucker, bronwen@priceofoil.org

Report: USD 1.4 trillion fossil fuel buildout jeopardizes Africa’s economies, climate, and communities

Analysis details why a just energy transition in Africa requires an end to new oil, gas, and coal extraction projects
Download the full report: priceofoil.org/the-skys-limit-africa

Read the Executive Summary of the report in Swahili, French, and Arabic.

A new report released today assesses fossil fuel industry plans to sink USD 230 billion into the development of new oil and gas production in Africa in the next decade. These reach $1.4 trillion by 2050. It finds these projects are not compatible with a safe climate future and are at risk of becoming stranded assets.

The report, The Sky’s Limit Africa: The case for a just energy transition from fossil fuel production in Africa, was researched by Oil Change International (OCI) and released in partnership with Oilwatch Africa, Africa Coal Network, Health of Mother Earth Foundation (HOMEF), 350Africa, WoMin African Alliance and the Center for International Environmental Law.

The analysis reveals 71% of the new oil and gas production planned in Africa in the next three decades would come from relatively costly modes of production or countries without an established industry. These factors increase the risk that new projects will become stranded, creating shortfalls of funding for cleaning up environmental damages, overnight job losses, and gaps in government revenues.

These conclusions follow bombshell reports this year from the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC) which found that new oil and gas fields and coal mines are incompatible with limiting global warming to 1.5 degrees Celsius and that governments must pursue a much more rapid phase-out of fossil fuels.

As Thuli Makama, Oil Change International’s Africa Director and Global South Advisor stated, “An equitable, managed phase-out of fossil fuel production provides a much brighter pathway for Africa than allowing new decades-long fossil fuel extraction projects to go forward. This does not mean stopping production overnight, but rather, planning ahead to ensure there is time and resources for clean-up and for a just transition for impacted workers and communities.”

The new report also looks at the local impacts of the fossil fuel industry to find that it has hurt jobs, health, and the environment while failing to deliver on economic promises. The authors argue industry is even less equipped to yield public benefits now that it faces global headwinds. They show 66% of projected new oil and gas production in Africa will be owned by overseas corporations and that renewable energy and other green economy sectors already provide 2 to 25 times as many jobs per dollar spent.

“It is a myth that fossil fuels equal development,” said Nnimmo Bassey, Environmentalist and Director of HOMEF, “Both the physical resources and the profits from these projects have overwhelmingly flowed out of Africa rather than addressing energy poverty on the continent. Meanwhile, pollution is the daily reality of our peoples and criminally harms nearby waterways, bodies, soils, and the air. As the fossil fuel industry gets more desperate to stay afloat in the face of unprecedented resistance to their business plans, these impacts on frontline communities risk becoming even worse. They must stop!”

The report authors call on governments in wealthy countries to move first and fastest in phasing out fossil fuel production and dramatically scale up their climate finance and debt cancellation to support just transitions in Africa and globally. However, given the escalating systemic risks to economy, climate, and development associated with new fossil fuel projects, they also recommend governments in Africa stop licensing and approvals for new oil, gas, and coal projects now, regardless of how other countries act. For countries with an established industry, authors recommend governments develop plans now for a gradual and managed phase-out of already-built fossil fuel extraction projects by 2050 at the latest, alongside just transition measures for workers and communities.

Quotes:

Charity Migwi, Africa Regional Campaigner at 350.org: “The time has come for no new fossil fuel extraction projects to be approved – in Africa or anywhere. If fossil fuel expansion in Africa continues it will not only bring devastating climate impacts but risk delaying or locking out the development of renewable energy and other green economy sectors.”

Anabela Lemos, Director of Justica Ambiental! (Friends of the Earth Mozambique): “Total came to Mozambique with promises of a better life for the people, but what they actually did was grab lands from the peasant communities, grab access to the sea from the fisherfolk and destroy these livelihoods and drive our country towards militarisation and conflict. What was once a beautiful and peaceful community, with land, water and sea, today they are refugees with nothing. Once they were a proud community, now they are surviving based on external aid. Human rights abuses are a norm, they do not trust anyone, they live in fear, with no hopes for their future. That was the reality of Total and fossil fuels corporations.”

Dickens Kamugisha, Chief Executive Officer of Africa Institute for Energy Governance (AFIEGO): “2020 and 2021 have so far provided a snapshot of what an unmanaged decline could look like in the oil and gas sector globally. Market shocks from COVID-19 and the oil price crash hit showed how unstable the oil and gas industry could get. Instead of doubling down on fossil fuel projects like the East African Crude Oil Pipeline that will lock poor countries into the fossil fuel economy, this is the time to build an energy system and green economy that is local, equitable, and democratic.”

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Other key findings and notes for editors:

For oil and gas, the report uses projections from industry consultancy Rystad Energy. For coal, it uses projections from the International Energy Agency’s World Energy Outlook. It provides country-level analysis for the top 16 projected oil, gas, and coal producers in Africa for 2020-2050: Nigeria, Mozambique, Algeria, Angola, Libya, Egypt, Tanzania, Mauritania, South Africa, Republic of Congo, Senegal, Ghana, Uganda, Ethiopia, Equatorial Guinea, and Gabon.

This report shows that if the fossil fuel industry extracts all of the oil, gas, and coal projected for production in Africa in the next three decades, this will emit 62 billion tons of CO2. This is equivalent to 13% of the remaining carbon budget associated with a 50% chance of staying within a 1.5°C level of warming. However, thirty-six percent of these future fossil fuel production emissions are from projects that are neither in production nor under development currently — meaning there are little or no costs to cancel them. From 2020 to 2050, 46% of gas production, 36% of oil production, and 23% of projected coal production are projected to come from new, not-yet-approved projects.

The market shocks of 2020 have provided a preview of the vulnerability of the fossil fuel industry’s plans to extract in Africa. Whereas pre-pandemic projections showed oil and gas production in Africa growing by one-third to 2050, OCI’s report shows it is now expected to decline by one quarter, a much more dramatic drop than the global average.

This report builds on recent research outlining the extent of Africa’s untapped renewable energy resources. Analysis from Carbon Tracker found that Africa holds nearly 40 percent of the world’s total renewable energy potential. Friends of the Earth Africa’s recent report modelled how the continent can dismantle existing fossil energy systems to leapfrog Africa to 100% renewable energy for all by 2050. Their plan would see 300 gigawatts (GW) of new renewable energy built by 2030 — as already agreed by the African Union — and over 2000 GW by 2050.

Yesterday, for the first time, the International Energy Agency (IEA)’s annual World Energy Outlook — used to influence trillions of dollars in global investment — detailed an achievable roadmap to keep global heating below 1.5 degrees Celsius (°C). In this report, the IEA reiterates that 1.5°C means “no fossil fuel exploration” and “no new oil and natural gas fields … beyond those that have already been approved for development.” It also shows: coal plant construction must stop now, new LNG export facilities are likely stranded assets, and global clean energy investment needs to more than triple by 2030. The IEA’s 1.5°C scenario also ensures 100% access to electricity and clean cooking – all without new oil and gas extraction projects. Whereas the IEA estimates that their fossil-heavy “business as usual” scenario would still leave 40% of Central, Eastern, Western, and Southern Africa without energy access in 2030.