Reactive

Response: International Energy Agency understates gas expansion risks for African communities, jobs, and climate

June 20, 2022

20 JUNE 2022

Contact: Bronwen Tucker, bronwen@priceofoil.org

Today, the International Energy Agency (IEA) released a new special report on Africa. The 2022 Africa Energy Outlook suggests a potential to increase gas production on the continent to 2030 even in a “sustainable” scenario — despite highlighting the clear and growing risks of these assets becoming stranded and disrupted by climate-related disasters, and despite the IEA’s 2021 finding that there is no space for new oil and gas expansion beyond existing fields and mines under a 1.5ºC-aligned pathway.

The IEA also highlights that African oil and gas producers have been more exposed to recent crises than others, with revenues falling most in the wake of COVID-19 and companies profiting least from the current surge in fuel prices. The new research also reveals that earlier progress towards universal energy access has reversed since the start of the pandemic with 25 million losing access, a setback that has been exacerbated by wealthy nations falling short on their commitments to provide climate finance.

In response to the report experts at Oil Change International, Earthlife Africa, and Justiça Ambiental issued the following statements:

Thuli Makama — Africa Program Director, Oil Change International said: “The IEA is wrong to suggest more fossil gas production is part of a ‘sustainable’ future in Africa when it has said no new gas beyond 2021 is what is aligned with 1.5°C in the rest of the world. This narrative is dangerous especially in light of the Russia and Ukraine conflict. Africa is being turned into a fossil fuel shopping mall by northern countries. From the East African Crude Oil Pipeline (EACOP) to Senegal offshore to Mozambique LNG there is already unwelcome pressure for Africa to plug the fossil fuel shortfall. Investment patterns show this rush for gas and oil has nothing to do with increasing energy access for Africa. It has everything to do with propping up fossil fuel dependent economies of the North. Africa and frontline communities will again be left to deal with stranded investments, pollution, and human rights transgressions that are the hallmark of extractivism. African leaders and financial institutions must steer clear of this resource curse trap. It is a myth that fossil fuels are good for development. An equitable, managed phase-out of gas production provides a much brighter pathway for Africa than allowing new decades-long extraction projects to go forward.”

Makoma Lekalakala — Director of Earthlife Africa said: “With this report, the IEA has singled out Africa as the one place gas expansion is still compatible with sustainable development. This will saddle frontline communities with deadly impacts and delay much needed just energy transitions. The resources and profits from gas production in Africa have overwhelmingly flowed out of the continent rather than providing energy access or public goods, and the IEA’s new report shows recent global crises have only exacerbated these trends. Today’s new research shows African fossil fuel producers have been the first to hurt and last to benefit from the volatile global fuel markets of the last two years. As the outlook for fossil fuels gets even riskier, the advice to invest in new gas infrastructure does not match the evidence the IEA itself is providing. The IEA should focus on pressuring Global North countries and public finance institutions to pay their fair share for the shift to renewables in regions like Africa in addition to climate finance, debt cancellation, and loss and damage that is owed.”

Anabela Lemos — Director JA! Justiça Ambiental, said: “Mozambique and its people are in the tragic situation of being devastated by both the causes and effects of the climate change crisis. One of the major causes of the climate crisis is the fossil fuel industry, and right now the gas rush in Mozambique is causing land grabs, destroyed livelihoods, human rights abuses, militarization and conflict. At the same time, Mozambique is one of the countries most affected by the impacts of climate change, with increasing floods, cyclones and droughts that have already killed, displaced and affected hundreds of thousands of the most vulnerable and poorest people. We must break this cycle of injustice and inhumanity, by stopping gas projects in Mozambique and around the world.”

David Tong – Global Industry Programme Manager, Oil Change International said: “The IEA needs to get its message straight. Now there is more evidence than ever before that new oil and gas expansion is inconsistent with 1.5ºC. The IEA acknowledged this reality in last year’s World Energy Outlook. The IEA should not have bowed to political and industry pressure and carved out an exception from its own conclusion that new fossil fuel expansion beyond existing fields and mines is inconsistent with 1.5ºC. It is critically important that the IEA does not seek to justify any other new oil, gas, and coal expansion with other dodgy exceptions.”

More background:

The 2022 Africa Energy Outlook analyzes recent energy trends and includes two major scenarios to 2050: a stated policies scenario (STEPS) and a Sustainable Africa Scenario (SAS), which the IEA says aims to show pathways for achieving African development goals, including reaching universal access to energy by 2030. Notably, SAS is not aligned with the 1.5°C climate goal.

In SAS, the IEA expects coal and oil production would decline, but that gas production would continue to expand, growing 15% by 2030 (Figure 2.27). The IEA notes that Europe’s efforts to reduce imports from Russia could increase production in their SAS further — growing exports by 33% or 30 bcm by 2030 (Box 3.6).

In contrast, the IEA’s 1.5°C aligned Net Zero Emissions (NZE) scenario that it made central to its World Energy Outlook in Fall 2021 would see no new gas expansion past 2021.

Oil Change International’s October 2021 report, Sky’s Limit Africa, found that most projected oil and gas expansion in Africa is not structured to bring local development or economic benefits, highlighting that:

71% of projected new gas and oil production in Africa over the next three decades is at an added risk of becoming stranded as it’s either for more the costly methods of production or located in a ‘new entrant’ region, where there are added infrastructure costs to starting extraction.

66% of projected new gas and oil production in Africa to 2050 is owned by multinational corporations outside of Africa.

Gas infrastructure is overwhelmingly designed for export rather than addressing energy poverty on the continent, with 83% of LNG terminal capacity from operating or planned projects for export.

A March 2022 report from the Tyndall Centre found that the window for a globally just fossil fuel phase out is rapidly closing. It showed that wealthy countries need to phase out their extraction by 2034 for the world to maintain a 50% chance of limiting warming to 1.5°C, and that for this outcome to be as equitable as possible these countries must also greatly increase their climate finance to the Global South.

The IEA highlights that wealthy countries are not reaching their climate finance or sustainable development targets, with poor outcomes for energy access especially. The highlights that: “achieving full access to modern energy in Africa by 2030 would require investment of USD 25 billion per year – equal to around a quarter of total energy investment in Africa prior to the pandemic – but just slightly above 1% of total energy investment globally and comparable to the cost of just one large LNG terminal investment.”

Alarmingly, it appears that the IEA did not consult with the organizations or communities on the frontlines of the impacts of fossil fuel extraction and expansion in Africa, even as some fossil fuel companies and industry associations are among the list of experts who peer reviewed the report.