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    An embarrassing Gas Leak – IGU Climate Strategy

    Stockholm (NordSIP) – According to the Intergovernmental Panel on Climate Change (IPCC), one of the key reasons for the global failure to keep on track with a 1.5 degree warming target is the political lobbying carried out by incumbent fossil fuel interests.  A striking example of this was uncovered by the independent think tank InfluenceMap, whose December 2022 report on the International Gas Union’s (IGU) Climate Strategy provides a rare look behind the scenes of what the IGU describes as an “existential” battle.

    The IGU comprises around 150 gas industry associations and corporations representing over 90% of the global gas market.  The InfluenceMap report is based on a range of IGU strategy documents that were publicly available on its website between September 2021 and April 2022.  It seems this may have been an oversight, as the documents have since been removed.  InfluenceMap’s analysis reveals a coordinated global strategy on the IGU’s part to position gas as a key component of the transition to a low-carbon economy.  This goes against the recommendations of the International Energy Association (IEA) and the IPCC, which advocate for the rapid reduction and elimination of fossil fuel use and investment.  Nevertheless, there are clear signs that this strategy may have had some success, as shown by the decision to categorise gas as a transitional fuel in the EU taxonomy that was covered by NordSIP last July.

    A fight for survival

    With a multinational membership that includes the likes of ExxonMobil and Shell, the IGU benefits from significant resources, geographical reach and political influence.  In a sign that it is more interested in the survival of its current business model rather than a genuine transition towards renewable energy, the IGU states in one of the documents that the debate on climate change could be “potentially existential for the global natural gas value chain” and that “potential regulatory changes combined with a restriction of liquidity to the sector could have highly damaging effects to the industry.”  The IGU documents also detail an international advocacy strategy that targets supranational and national institutions including the International Monetary Fund, the G20 and the United Nations.  This is underscored by an effort to reinforce the credibility of the IGU’s position by seeking to collaborate with academic institutions, think tanks and media organisations.

    An attempt to redefine gas

    A key pillar of the IGU strategy is to bundle fossil gas along with so-called “renewable gas” and various efforts to decarbonise gas production in the minds of policymakers.  While methane can indeed be produced from landfills, animal manure, food scraps and wastewater sludge, it remains one of the most potent greenhouse gases and produces CO2 when burned.  Biomethane can be beneficial within a low-carbon energy strategy providing it is made from genuine waste products and is used to displace worse fuels such as coal or diesel.  Renewable gas production is contentious as a long-term climate solution and needs to meet many key criteria to be considered effective.  The IGU documents appear to show evidence of it being employed alongside carbon capture and storage (CCS) technology as part of a “smoke and mirrors” strategy to maintain the acceptance of fossil gas.

    The IGU’s response

    The IGU issued a statement in reaction to the InfluenceMap report, in which they argue that “natural gas is the fuel that today meets a quarter of the world’s primary energy demand in more than 100 countries, and any serious effort decarbonise the energy system at a scale suitable for the Paris targets, will require clean electricity and gas, including natural gas, renewable or biogas, hydrogen, carbon capture technologies, and the necessary infrastructure to deliver this energy to people and businesses.”  While they call for “a constructive dialogue between all key actors and stakeholders,” the IGU have been exposed by InfluenceMap as making every effort to operate under the radar in order to protect their industry.  It is only through concerted shareholder pressure and the ongoing work of non-profit organisations like InfluenceMap that the fossil fuel industry may eventually be prevented from dragging its feet in the face of the climate crisis.

    Image courtesy of Gerd Altmann from Pixabay
    Richard Tyszkiewicz
    Richard Tyszkiewicz
    Richard has over 30 years’ experience in the international investment industry. He has worked closely with major Nordic investors on consultancy projects, focusing on the evaluation of external asset managers. While doing so, Richard built up a strong practical understanding of the challenges faced by institutional investors seeking to integrate ESG into their portfolios. Richard has an MA degree in Management and Spanish from St Andrews University, and sustainability qualifications from Cambridge University, PRI and the CFA Institute.

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