The US is to become the world’s top LNG exporter – and other stories about the global energy crisis this week

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Roberto Bocca, Head of Shaping the Future of Energy and Materials; Member of the Executive Committee, World Economic Forum, Stefan Ellerbeck, Senior Writer, Formative Content

• This weekly round-up brings you the latest on developments in the global energy sector.
• Top energy news: US predicted to become world’s top LNG exporter; Japan’s nuclear restart faces major obstacles; India moves to boost green hydrogen.
• For more on the World Economic Forum’s work in the energy space, visit the Shaping the Future of Energy, Materials and Infrastructure Platform.

1. News in brief: Energy stories from around the world

The United States is on track to become the world’s biggest exporter of liquefied natural gas (LNG) in 2023 – moving back ahead of current market leader Australia and staying ahead of third-placed Qatar. Exports from these countries have been vital to helping Europe rebuild its gas stockpiles after Russia’s invasion of Ukraine disrupted supplies.

The head of one of Europe’s biggest oil and gas companies says the EU should look to Africa, not the US, to replace Russian energy imports, The Financial Times reports. Claudio Descalzi, Chief Executive of Italian firm Eni, says a new “south-north axis” could connect Europe with Africa’s abundant renewable and fossil fuel resources.

Two European power giants plan to develop a supply chain for low-carbon hydrogen, allowing Germany to cut its reliance on coal-fired power and reduce its CO2 emissions. Norway’s Equinor and Germany’s RWE say the project will involve building a hydrogen pipeline between the two countries, as well as new power plants in Germany.

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India has approved an incentive plan of INR174.9 billion ($2.1 billion) to promote green hydrogen in a bid to cut emissions and become a major exporter of the gas. The move aims to help the country, which is one of the world’s biggest greenhouse gas emitters, achieve net zero carbon emissions by 2070.

Europe’s gas prices are slumping as a combination of mild weather and reduced industrial consumption has produced an unusual seasonal increase in inventories. Storage supplies in the European Union and the UK are at their second-highest level for the time of year in the last decade, and are on course to end the winter at an exceptionally high volume.

China’s state planner has allowed three central government-backed utilities and its top steelmaker to resume coal imports from Australia. It’s the first such move since Beijing imposed an unofficial ban on coal trade with Canberra in 2020.

The Abu Dhabi National Oil Company is aiming to allocate $15 billion to decarbonization projects by 2030. This will include investments in clean power, carbon capture and storage, and electrification.

Demand for electric vehicles is soaring in the UK, accounting for a fifth of all new car sales in 2022. Electric car sales rose from 190,700 in 2021 to 267,000 last year, raising their market share to 16.6% from 11.6%.

China is looking to do a lot more of its oil trading and investment in its own currency, the renminbi, according to an opinion piece in The Financial Times. It says this is part of a wider effort to “de-dollarize” the so-called BRIC countries of Brazil, Russia, India and China, and other parts of the world.

2. Japan’s nuclear restart hampered by supply chain issues

Japan’s plans to revive its nuclear industry to help tackle the energy crisis are at risk because of a shortage of engineers and manufacturing capacity, The Financial Times reports. Japan generated around a third of its electricity using nuclear power before the Fukushima nuclear disaster of 2011, but now gets under 10% of its electricity this way, according to the International Energy Agency. It aims to raise this to 20% by 2030.

Japan has just 10 operational nuclear reactors.

The Fukushima disaster led to an exodus of more than 20 manufacturers from the sector. Now industry experts are warning that Japan’s nuclear supply chain is under strain.

“We’ve had nothing happening with respect to new nuclear plants and slowly you start losing equipment suppliers, expertise and people,” George Borovas, Head of the nuclear practice at Hunton Andrews Kurth in Tokyo, told the Financial Times. “If you lose a generation of that, then it’s really hard to recover and it’s a big concern for the industry”.

Japanese Prime Minister Fumio Kishida has called for the construction of new nuclear plants. The global disruption of gas supplies following Russia’s invasion of Ukraine has prompted many countries to reassess their nuclear power options.

In Japan, companies such as GE Hitatchi are lobbying for small modular reactors (SMRs), which they say are more cost effective and quicker to construct than traditional nuclear plants. However, critics say SMRs can’t compete against the economies of scale achieved by larger reactors.

3. Canada’s oil producers look to carbon storage to reduce emissions

Canada’s biggest oil sands producers have signed an agreement with the government of the state of Alberta allowing them to assess the geology of an underground carbon capture and storage (CCS) site.

The Pathways Alliance, consisting of six companies representing 95% of Canada’s oil sands production, is proposing a CCS hub that will gather and store emissions from 14 projects in northern Alberta by 2030.

The oil and gas sector is Canada’s highest-polluting industry and CCS is an important plank in Pathways’ plan to reach net zero emissions by 2050. But the costly technology takes years to build, and proposed Canadian projects are relying on government support to move forward.

The plan is expected to cost around CAD16.5 billion ($12.2 billion) by 2030. The Canadian government last year unveiled a CCS investment tax credit, but the oil industry is asking federal and provincial governments for further financial support.

Pathways has not yet made a final investment decision on the CCS project. It plans to file a regulatory application this year for a proposed carbon transportation pipeline and storage network.

4. More on energy from Agenda

The permitting process is a key cause for delays in renewable energy projects. The EU must address this challenge to help it tackle the current energy crisis and meet 2050 net zero targets.

Wind turbines are increasing in size, with the world’s largest standing at more than a quarter of a kilometre high. Professor Simon Hogg, Executive Director of the Durham Energy Institute at Durham University, considers why turbines are increasing in size at such a rapid rate, and asks if there is a limit to how big they can get.

Geothermal energy is produced by accessing reservoirs of hot water found several miles below the Earth’s surface. This explainer looks at the benefits as well as downsides of the sustainable energy source.

To learn more about the work of the Energy, Materials, Infrastructure Platform, contact Anne Therese Andersen: AnneTherese.Andersen@weforum.org