The UK is supposed to have its head straight on the subject of climate change, and as such should have avoided the situation it finds itself in, guaranteeing over $1 billion in export guarantees to Mozambique for a gas project – not one that will create much needed electricity for the country, but one that will create a gas industry in Mozambique for the benefit of the US.
This is all about a global conspiracy to build an export LNG terminal, a stopping off point for both Europe and Africa, which can take LNG ships, as a first port of call containing US and Canadian gas supplies for both continents. Originally it was a US idea, but it has been presented as a French deal, to ease it past European governments.
This reeks of there being two faces to the UK conservative party, the Green and Friendly face of Boris Johnson’s leadership, and the arch-tory backroom deals which smell of corruption, selling arms, fossil fuels and other nasty stuff around the world, in which invariably someone in power at both ends of the deal, gets rich. The UK involvement was announced at the end of June, and now it looks as if at last one agency is looking to put legal roadblocks on the investment.
News broke today that this deal will be recommended for a judicial review, but we can see the government closing ranks on this, instead of what a country who is holding the next COP26 meeting on global warming, should do. Which is cancel the deal and fire everyone who had anything to do with it.
UK Export Finance has for too long been used almost exclusively to sell fossil fuel know how to line the pockets of the already rich, by the government offering loans to foreign countries to buy equipment ostensibly exported from the UK. In this instance it is lending $300 million to UK companies working on the gas project and will also guarantee loans from commercial banks worth up to $850 million.
In 2017 some 97% of all deals at UK Export Finance involved fossil fuels. The department is run by Graham Stuart, a public school educated, Cambridge drop out, and while we are not suggesting that he has made money out of it himself, he represents an odious part of the conservative party, who loves fox hunting and has voted to bring it back, and just as clearly is not interested in democracy – where subjects close to the voters hearts, like renewable energy – fail to matter at all.
We are not hopeful of a legal battle ensuing, and can already hear the defense of the deal “if we don’t fund it another country will.” Given we want to portray the UK as expert in wind turbine technology, how come no-one wants to export our wind know how to Mozambique? Because efforts like that are shown the door by a fossil fuel loving culture that has grown up around the organization. It is an organization that still sells arms to Saudi Arabia, for oil favors and it is an extension of the Civil Service and the Old Boys network, for all UK public school boys.
The UK needs to hold the people inside UK Exports Credit accountable for trying to set up this deal, oust them and put in some civil servants who do not ignore popular sentiment, and who will push renewable energy at the African countries.
Friends of the Earth has said it may lead the call for a judicial review of the decision, and given that this is not just the UK, but a deal that involves seven other countries all putting cash into the scheme, an investigation into how this happened should be splashed over the pages of all the national newspapers, every day until it is dead in the water.
What UK newspapers have failed to notice is that this is yet another LNG project that is never going to pay its way. Liquid Natural Gas is a failing industry and this is part of a $20 billion effort to create an LNG terminal who’s sole aim is to sell US fracked natural gas.
We covered a piece from Global Energy Monitor two weeks back which showed how LNG terminals and their requirement for investment and how shaky it is.
It painted a picture of what looks like a global fracking conspiracy, to turn the US and Canada into the center of the natural gas global community, which needed to eat up some $196 billion in financing for LNG terminals, which has been put together by almost every global bank you can name, including those who have sworn off the idea of supporting fossil fuels.
In a report out on the same day focusing purely on Japan’s ambitions to be a global terminal for LNG, under a strategy that it claims will give it energy security (but be totally reliant on the US for energy), the Global Energy Monitor points out that the $20 billion plus investment is unlikely to be completed, not because of promises to honor the IPCC targets, but because of fears that the terminal would never repay the money. If Japan could not make this pay, Mozambique will have no chance.
If Biden gets into the White House next year, and implements a crackdown on fracking, every LNG terminal in the world that has been built will lay idle, and all those that are half built, as this one in Mozambique will be, will have workers down tools, to save what money they can.
This amounts to a global conspiracy to build a global distribution network for US and Canadian gas, so that it can compete with Russia. US promises that everyone associated with the project will get rich, makes it amount to little more than an attempt to con Mozambique out of a future of renewables and prosperity.
Effectively this is an attempt to addict Africa onto LNG when it does not need it. The fossil gas industry worldwide has more than doubled the amount of LNG terminal capacity under construction in the past year, a strategy driven by the US and Canada as they seek to create new markets for LNG supplied from North America by tanker ship.
Such a boom would not only lock in a huge amount of CO2 when those gases are burned, but also a similarly large amount of methane lost in the extraction and transportation processes – something that gas companies have denied for years, but which now satellites can spy on easily.
If you add to this the news last week from Energy Policy Tracker which shows that among the G20 nations, at least $150.8 billion has been promised by various government departments to fossil fuels as part of the Covid-19 recovery effort, it starts to look like a James Bond movie of global proportions, complete with evil banking villains rubbing their hands with glee and imagining piles and piles of cash, while Africa burns.
This LNG project is led by Total, and has lassoed in 8 export credit agencies and 19 commercial banks. As gas prices fall, it will end up being unable to meet its commitments, and the tab will be met by UK tax payers.
The credit agencies for France, the UK, US Japan, Italy, South Africa, the Netherlands and Thailand are all involved. The banks are from each respective country represented by those export agencies, except the US, and it includes a loan from the African Development Bank.
Total has suggested government revenues of $50 billion for Mozambique over 25 years, so around $2 billion a year. That compares with the Mozambique’s GDP of just $15 billion. The idea originally came out of oil from Anadarko, now part of Occidental in Texas, but it was thought that Total ownership would make it appear to be a European idea.