$200+ Billion In Pipelines Planned Or Underway In N. America, Implying Decades More Oil/Gas Use
An oil and gas building spree in the United States might have a serious boomerang effect that could hit the industry as hard as a changing fundamentals landscape hit the coal industry in the 2010s, a report from Global Energy Monitor has warned.
According to the report, there is US$232.5 billion worth of new oil and gas pipelines being planned and built right now in North America, with most of this in the United States. This expansion, however, does not rely on an increase in domestic demand for oil and gas. It relies almost exclusively on demand growth in Asia, much like the coal expansion in the 2010s. That, however, went awry, decimating the coal industry.
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While it remains doubtful how successful governments’ efforts in the emission-cutting respect will be, the fact remains that such efforts are being made, including in that most desirable of all Asian market where reducing oil and gas consumption is not just a question of emissions reduction, but of reducing the energy import bill. It seems the risk comes from the belief that the status quo will continue indefinitely. This, however, is not the case and investors should think twice before taking part in new pipeline construction, Ted Nace, executive director of Global Energy Monitor said.
“The oil and gas industry is shaped by the familiar patterns of the boom/bust cycles that characterise extraction,” he told Engineering and Technology. “It’s easy to shift drilling rigs in and out of deployment. But midstream infrastructure is fundamentally different. Investments are for 40 to 50 years. The industry does not seem to realise how quickly the landscape is shifting as costs for renewables and storage fall very rapidly.”
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https://climatecrocks.com/2019/04/30/pipeline-boom-may-be-a-bubble/#more-55622