TxTom retweetet
The Hormuz crisis is the precipitating factor in the current energy crisis, but the underlying cause is too little oil and gas production outside the Persian Gulf.
Had the world spent the past decade building the oil, gas, LNG, pipeline, and fertilizer infrastructure that engineers designed and companies proposed, the Hormuz crisis would still be a serious geopolitical event, but it would not threaten to cause a recession.
North America
— The Atlantic Coast Pipeline, a 600-mile natural gas line from West Virginia to North Carolina, saw its cost double from $4.5 billion to $8 billion during years of environmental litigation before Duke Energy and Dominion Energy cancelled it in July 2020.
— The Constitution Pipeline from Pennsylvania to New York died the same year.
— The PennEast Pipeline won its case at the United States Supreme Court in 2021 and still could not get built because New Jersey refused to issue state permits.
— In Canada, TransCanada abandoned the $15.7 billion Energy East pipeline in 2017 after the National Energy Board required an unprecedented review of upstream and downstream emissions.
— In January 2024, the Biden administration paused all pending approvals for LNG export terminals shipping to non-free-trade-agreement countries, freezing projects representing tens of billions of cubic feet per day of potential capacity.
— Venture Global’s CP2 terminal in Louisiana, designed for 20 million tonnes per annum, sat in regulatory limbo for over a year.
— NextDecade’s Rio Grande LNG in Texas, with 48 MTPA of planned capacity, stalled alongside it.
— PTT Global Chemical’s proposed $10 billion ethane cracker in Belmont County, Ohio, first announced in 2015, remains on indefinite hold after failing to attract financing partners amid climate-driven investor sentiment.
— Across the US Gulf Coast, nearly 60% of planned plastic and petrochemical production projects sit on hold.
— LNG Canada, the Shell-led terminal at Kitimat, British Columbia, took over six years from construction start to first cargo, with its pipeline running 263% over budget. Environmental review, Indigenous disputes, and contractor cost escalation all contributed.
— Pieridae Energy’s Goldboro LNG project in Nova Scotia, a 10 MTPA facility first proposed in 2012, was abandoned in November 2023 after more than a decade of permitting and financing obstacles.
Australia
— Australia’s Santos’s Barossa gas project was halted midway through construction after a Federal Court ruling overturned its environmental approval.
— Woodside’s Scarborough project faces ongoing litigation from the Australian Conservation Foundation seeking to block it on climate grounds.
Africa
— Perhaps nowhere has the damage been more consequential than in Africa. At COP26 in 2021, wealthy nations pledged to halt overseas development finance for gas projects, a commitment that fell hardest on the continent least responsible for climate change and most in need of energy infrastructure.
— The World Bank stopped financing oil and gas extraction in 2019 and imposed restrictive conditions on downstream gas projects.
— The European Investment Bank announced a complete ban on unabated fossil fuel financing by the end of 2021, with its president declaring that “gas is over.”
— At least 21 other development finance institutions followed suit.
As a result:
— TotalEnergies’ Mozambique LNG project sat under force majeure for four and a half years after the UK Export Credit Agency and other backers withdrew climate-motivated financing.
— The East African Crude Oil Pipeline lost financing commitments from more than 30 major international banks under pressure from climatists.
Europe
— France prevented the completion of a third gas interconnector with Spain, citing climate neutrality goals.
— The United Kingdom imposed a moratorium on fracking in 2019 despite sitting atop one of Europe’s most promising shale gas formations.
— Germany, which shuttered its last three nuclear plants in April 2023, compounded its gas dependency by refusing to develop domestic shale resources.
— CF Industries permanently shut the UK’s largest ammonia plant at Billingham, a facility that also produced 60% of Britain’s food-grade CO2.
— Yara International curtailed output across plants in France, Italy, and Belgium before permanently closing its 400,000 tonne per year ammonia facility at Tertre, Belgium, in October 2024.
These closures occurred because European climate policy made gas too expensive for the domestic industry to survive.
Michael Shellenberger@shellenberger
We should have spent more on green energy, say the media. No, we shouldn't have. The $2 trillion we spent did nothing to prevent the energy crisis and may even have caused it.
English
