Pipeline Bubble 2021

Pipeline Bubble
2021
TRACKING GLOBAL OIL AND GAS PIPELINES
James Browning, Greig Aitken, Lydia Plante, and Ted Nace

PIPELINE BUBBLE 2021
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FURTHER RESOURCES
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■ CoalWire newsletter
The Global Infrastructure Tracker (GFIT) provides over 40
■ GEM.wiki energy wiki
summary data tables on oil and gas pipelines and terminals
broken down by region, country, and company; methodology
ABOUT THE GLOBAL FOSSIL notes; and an interactive global map. To obtain primary data
INFRASTRUCTURE TRACKER from the GFIT, contact Ted Nace (ted.nace@globalenergy-
monitor.org).
The Global Fossil Infrastructure Tracker is an online
database that identifies, maps, describes, and categorizes
oil and gas pipelines, and liquified natural gas (LNG) termi- ABOUT THE COVER
nals. Developed by Global Energy Monitor, the tracker uses Cover photo: Getty Images/iStockphoto
footnoted wiki pages to document each plant.
AUTHORS
James Browning is Communications Director, Greig Aitken
and Lydia Plante are Research Analysts, and Ted Nace is
Executive Director at Global Energy Monitor. Additional
research by Gregor Clark, Dulguun Gantulga, Aiqun Yu, and
Scott Zimmerman of Global Energy Monitor and Matt Kelso
of FracTracker.
PRODUCTION
Design by Charlene Will and Mimi Heft. Additional design
and page layout by David Van Ness.
GLOBAL ENERGY MONITOR REPORT | FEBRUARY 2021 | 2

Global
Energy
Monitor
Pipeline Bubble 2021

TRACKING GLOBAL OIL AND GAS PIPELINES
James Browning, Greig Aitken, Lydia Plante, and Ted Nace
EXECUTIVE SUMMARY
This report provides the results of a global survey of oil and gas trans-
mission pipelines carried out by Global Energy Monitor at the close of
2020. The report includes the following points:
■ Stranded asset risk of $1 trillion. A planned 212,000-km expansion

in the global system of oil and gas transmission pipelines, amount-
ing to US$1 trillion in capital expenditures, is on a collision course
with commitments by most large economies to transition to carbon
neutrality by mid-century, setting the stage for large amounts
of stranded assets.
■ Lock-in of future emissions. Pipeline projects under construction

and in pre-construction will support a lifetime increase in oil and
gas CO2 emissions of 170 gigatonnes, only 15% less than the pro-
jected lifetime CO2 emissions of the currently operating global coal
plant fleet.
■ Gas dominates the mix. 18 of the 20 longest pipelines in develop-

ment and 82.7% of all pipelines in development globally will carry
gas, reflecting the fossil fuel industry’s success in perpetuating the
myth that gas can be a “bridge fuel” to a clean energy future.
■ U.S. leads global capacity growth and climate risk. The U.S. is
the leading developer of pipelines as measured by capacity, with
19.6 million barrels of oil equivalent per day in development. This
expansion presents a major climate risk since U.S. exports of liqui-
fied natural gas have the highest greenhouse gas intensity of any
major exporter, according to Boston Consulting Group.
■ China. China continues a massive 32,800-km expansion of the

country’s oil and gas pipeline network. That network is being

consolidated under a new company, PipeChina, which will soon be

the largest builder of gas pipelines in the world.
■ Slowing growth. The global pipeline expansion has slowed in the

past decade and some projects were delayed in 2020 by the Covid-
19 pandemic. Overall, however, the expansion curve has been bent
rather than broken, with pipelines continuing to enjoy both policy
support and financial support by governments and major financial
institutions.
■ Stopping the Keystone clones. The Biden Administration has

canceled the Keystone XL pipeline and can determine the fate
of “Keystone clones” such as the Line 3 replacement oil pipeline
by taking action in seven major areas—pipeline approvals, green
stimulus measures, FERC appointments, executive actions, cabi-
net nominations, overseas subsidies, and approvals for oil and gas
export terminals.
■ Few restrictions on midstream financing. An analysis of the

Permian Basin, which has surpassed Saudi Arabia’s Ghawar Field
to become the biggest-producing oil field in the world, shows
f inancial support by more than 100 institutions. While 50 major
financial institutions have now implemented policies restricting
support for tar sands or Arctic extraction, only four so far have
restricted pipelines.
■ Pipelines losing their social license. Intense opposition from

landowners, indigenous groups, and climate activists is causing
the cancellation or delay of high-profile pipelines, and is changing
perceptions of pipelines as a “safe” investment.

INTRODUCTION
This report provides the results of a global survey of a managed decline of fossil fuel production, can the
oil, gas, and natural gas liquids (NGL) transmission industry convince governments and financial insti-
pipelines carried out by Global Energy Monitor at the tutions to invest in a further expansion of fossil fuel
close of 2020. The survey found that the Covid-19 pan- infrastructure? Many of the world’s largest economies,
demic has disrupted investment decisions and con- including China, the European Union, Japan, and
struction work on numerous pipelines, particularly Korea, have now committed to achieving net zero
in North America, shifting the general outlook for oil emissions within the projected lifespan of pipeline
and gas production and infrastructure expansion, and infrastructure currently being proposed, raising the
accelerating the transition to clean energy. Neverthe- possibility that such projects, if built, will be prema-
less, with most of the disruption coming in the form of turely retired.
delays rather than cancellations, the growth curve of
the global pipeline system is bent but not broken, with The economics of oil and gas infrastructure are under
468 new pipelines or pipeline expansions in active short-term pressure due to the effects of pandemic-re-
development. If completed, projects under construc- lated demand reduction and long-term pressure due
tion or in pre-construction development will expand to the global transition away from fossil fuels. For oil,
the global oil and gas pipeline systems by 37,000 km the main threat in the coming decade is the pros-
and 175,000 km respectively, amounting to US$1.07 pect of vehicle electrification, as more governments
trillion in capital expenditures. announce transitions away from internal combus-
tion sales and manufacturers respond by shifting
With many projects stalled due to the Covid-19 investments toward electric vehicles. For gas, change
pandemic, the resulting crash in oil and gas prices, is arriving most rapidly in the power sector, where
and poor returns on existing pipeline projects (see combinations of renewables, batteries, and demand
“Financing the Permian Boom” below), the oil and gas management now offer equivalent reliability at lower
industry finds itself at an inflection point. As more cost than gas-fired power plants.
and more civil society organizations (CSOs) call for

PIPELINE BUILDING TRENDS DOWNWARD, FOLLOWING INDUSTRY DECLINE

During 2020, developers completed 3,600 km of oil prior to the pandemic to US$25 billion per year going
pipelines and 9,619 km of gas pipelines, or an overall forward. Topping the Fortune 500 as recently as 2011,
average of 1,102 km per month for oil and gas pipe- ExxonMobil was dropped from the Dow Jones Indus-
lines combined. As shown in Figure 1, this continues trial Average in 2020 and its market capitalization was
the steady dropoff in construction levels since 2008. briefly surpassed by “clean supermajor” NextEra,
owner of 20,000 MW of renewable power capacity.
The decline in pipeline completions parallels a A report by Goldman Sachs projected that post-pan-
general financial decline in private-sector oil com- demic capital expenditures in renewables would sur-
pany balance sheets and market value during the pass capital expenditures for oil and gas exploration
same period. In the decade ending August 17, 2020, and development (Eckhouse 2020). Given these trends,
the per-share value of ExxonMobil, Chevron, and it appears that the decline in oil and gas pipeline
Total declined by 11.8%, compared to an increase building may continue in the coming years.
of 209.6% in the same period for the S&P 500. In
response to the oil industry’s general financial stress, As described below, ownership of pipelines is domi-
major companies have announced plans to reduce nated by state-owned enterprises, and such companies
capital expenditures, with ExxonMobil announcing may be somewhat insulated from the market forces
a reduction of capex from US$35 billion per year that are impacting the publicly traded oil majors.
Figure 1. Annual Oil and Gas Pipeline Completions, 2008–2020 (km)
Source: GEM, Global Fossil Infrastructure Tracker, December 2020

GAS DOMINATES THE MIX

Gas dominates the global mix, accounting for 82.7% of in 2020, but also more long-distance gas transmission
global pipelines in pre-construction and construction, pipelines, some supplying LNG terminals for over-
as shown in Figure 2. The dominance of gas pipelines seas transport and others moving large quantities of
reflects the shift from oil to gas in the global energy gas by land (Plante et al). Of the longest 20 pipelines
economy. In 1978, oil’s share peaked at 45% of global currently in development globally, 18 will carry gas,
primary energy consumption, subsequently falling to sometimes crossing national boundaries from produc-
33% in 2019. In the same period the share of fossil gas tion areas such as Russia’s Yamal Peninsula to West-
increased from 16% to 24% (BP 2020). Moreover, gas ern Europe, at other times remaining within a single
supply chains are lengthening, which means larger large country’s own boundaries, such as the pipelines
investments in infrastructure and greater stranded that connect remote fields to population centers
assets if and when projects stall or are prematurely in China (Xinjiang Coal-to-Gas pipeline, 8,372 km),
retired. The global gas system now includes not only Brazil (GASUN gas pipeline, 4,989 km), and Nigeria
more LNG terminals, which have grown from supply- (Trans Nigeria gas pipeline, 4,128 km).
ing nine countries in 2000 to supplying 43 countries
Figure 2. Shares of Oil and Gas in Global Pipeline Development (by Length)
Source: Global Fossil Infrastructure Tracker, December 2020
METHODOLOGY
The Global Fossil Infrastructure Tracker is based on operating, mothballed, and retired. Proposed projects with
public data sources including industry, news, and govern- no reported developmental progress after two years are
ment websites. For each project, a footnoted wiki page considered shelved, and after two more years are consid-
on GEM.wiki provides location, ownership, background, ered canceled. An interactive map of all projects, including
developmental status, and background information. Wiki links to all wiki pages and summary data sheets, can be
pages are updated every 6 months. The main status found at GlobalEnergyMonitor.org, along with additional
categories are proposed, construction, shelved, canceled, notes on methodology.

REGIONAL DISTRIBUTION AND CAPITAL EXPENDITURES

Development of new gas pipelines is dominated by Worldwide, the capital expenditure associated with
the Asia Pacific region, which outweighs the next projects in pre-construction or construction amounts
two regions, North America and Africa, combined, to US$1.07 trillion, as shown in Table 2. Based on an
as shown in Table 1. Overall, the Asia Pacific region average of US$5.04 million per km, pipelines com-
accounts for 42% of gas pipelines, as measured by pleted in 2020 amount to US$42.6 billion in capital
distance, in pre-construction or construction. Devel- investments.
opment of new oil pipelines is dominated by North
America, with 39% of oil pipelines (as measured Asia Pacific pipeline development is concentrated
in km) in pre-construction or construction. in China, with over 14,466 km of gas transmission
pipelines under construction, and India, with over
11,017 km of gas pipelines under construction, as
shown in Table 3.
Table 1. Pipeline Development by Region (km)

Gas Oil
Region Proposed Construction Proposed Construction Total
Asia Pacific 45,925 27,669 2,539 3,869 80,001
Africa 20,446 4,452 6,912 1,980 33,789
North America 12,620 4,034 10,012 4,152 30,818
Europe 15,770 5,911 1,550 207 23,438
Eurasia 15,609 4,469 0 0 20,078
Latin America 8,354 5,479 55 0 13,888
Middle East 2,027 2,559 2,589 2,862 10,037
Total 120,749 54,573 23,657 13,070 212,048
Table 2: Estimated Capital Cost of Pipelines Under Development (Billion US$)

Region Gas Oil Total
Asia Pacific 371 32 403
Africa 126 45 170
North America 84 71 155
Europe 109 9 118
Eurasia 101 0 101
Latin America 70 0 70
Middle East 23 27 51
Total 884 185 1,069
Source: Global Fossil Infrastructure Tracker, December 2020. Includes projects in construction
and pre-construction stages. Based on US$4.75 million per km in 2016 (adjusted to US$5.04
million per km in 2020 dollars) from “Natural gas pipelines profits, construction both up,” Oil &
Gas Journal, November 2018. Average pipeline diameter is assumed to be 30 inches. For
further notes, see “Oil and Gas Pipeline Construction Costs,” GEM.wiki.

Table 3. Pipeline Expansion Plans by Country by Length, Top 20 Countries (km)

Gas Oil
Country Pre-Construction Construction Pre-Construction Construction Total Gas & Oil
China 14,466 15,001 2,060 2,746 34,273
USA 9,010 1,991 8,100 2,643 21,744
India 11,017 9,423 235 0 20,675
Russia 13,820 3,233 0 0 17,053
Australia 8,458 79 0 0 8,537
Brazil 2,679 5,344 0 0 8,023
Nigeria 2,104 4,255 0 110 6,469
Canada 2,180 670 1,912 1,508 6,271
Iran 1,223 1,900 539 2,332 5,994
Mozambique 4,158 0 0 0 4,158
Bangladesh 2,740 401 237 440 3,818
South Africa 3,630 0 0 0 3,630
Romania 2,501 904 0 0 3,405
Tanzania 1,228 0 1,948 0 3,176
Poland 1,192 1,193 496 0 2,880
Indonesia 2,060 625 0 136 2,821
Mexico 1,430 1,373 0 0 2,803
Niger 1,454 0 0 1,210 2,665
Pakistan 1,714 772 0 0 2,486
Kenya 0 0 2,358 0 2,358
Source: Global Fossil Infrastructure Tracker, December 2020.
Table 4. Pipeline Expansion Plans by Country by Capacity, Top 20 Countries (barrels of oil equivalent per day)
Gas Oil
Country Pre-Construction Construction Pre-Construction Construction Total Gas & Oil
USA 8,336,450 2,458,626 5,873,857 2,960,300 19,629,233
China 3,346,269 3,468,013 2,785,829 0 9,600,111
Russia 4,285,714 1,779,935 0 0 6,065,650
India 1,122,091 2,277,487 500,000 0 3,899,579
Canada 456,489 517,170 2,761,143 0 3,734,802
Iran 234,289 669,666 1,778,350 1,000,000 3,682,305
Iraq 0 0 2,402,178 0 2,402,178
Australia 2,219,868 0 0 0 2,219,868
Jordan 0 0 1,467,385 0 1,467,385
Germany 0 1,130,497 137,754 0 1,268,251
Poland 106,715 180,610 771,017 0 1,058,343
Nigeria 366,656 676,090 4,986 0 1,047,732
Indonesia 27,582 642,182 250,000 0 919,764
Turkey 269,135 0 630,019 0 899,154
Oman 83,636 0 781,776 0 865,413
Brazil 503,124 275,236 0 0 778,360
Italy 421,883 231,006 0 0 652,889
Angola 0 0 602,599 0 602,599
Kazakhstan 0 0 0 600,000 600,000
Argentina 414,113 0 155,000 0 569,113

OWNERSHIP: WHO IS BUILDING PIPELINES?

At least 84 companies are developing oil pipelines, At the #3 position on both lists, PipeChina is an
and 257 companies are developing gas pipelines. The important new player in the pipeline sector. The com-
top 15 companies building oil pipelines are shown in pany was announced in December 2019, and in Octo-
Table 5 below, and the top 20 companies building gas ber 2020 it took over midstream assets from China’s
pipelines are shown in Table 6 on the next page. A three major national oil companies: China National
list of all companies can be found at the Global Fossil Petroleum Corporation (CNPC), China Petroleum &
Infrastructure website. As shown in the tables, virtu- Chemical Corporation (Sinopec), and China National
ally all pipeline development outside North America is Offshore Oil Corporation (CNOOC) (Downs 2020). As
by state-owned companies. Notably, with the excep- shown in the tables, the Global Fossil Infrastructure
tion of Total at #14 among oil pipeline developers, Tracker still assigns ownership of some pipelines to
none of the seven traditional oil majors (Eni, Statoil, Sinopec and China National Petroleum Corporation.
Total, Chevron, BP, Shell, and ExxonMobil) is rep- While full integration is expected to take some time,
resented in the top ranks of developers of oil or gas PipeChina will likely emerge within the early part of
pipelines. the 2020 decade as the world’s leading builder of both
oil and gas pipelines.
Table 5. Top 15 Developers of Oil Pipelines (km)

Parent Company Proposed Construction Total Ownership Country
Iran Ministry of Petroleum 539 2,422 2,961 State Iran
Iraq Ministry of Oil 2,680 0 2,680 State Iraq
PipeChina 1,100 1,158 2,258 State China
Sinopec 960 1,160 2,120 State China
Plains GP Holdings 1,728 339 2,067 Public U.S.
China National Petroleum Corporation 0 1,980 1,980 State China
TC Energy 0 1,897 1,897 Public Canada
Eagle Spirit Energy Holdings 1,601 0 1,601 Private Canada
Government of Kenya 1,534 0 1,534 State Kenya
Government of Zambia 1,146 0 1,146 State Zambia
Phillips 66 1,137 0 1,137 Public U.S.
Tallgrass Energy 1,127 0 1,127 Private U.S.
Canada Development Investment Corporation 0 980 980 Private/State Canada
Total S.A. 928 0 928 Public France
Magellan Midstream Partners 805 0 805 Public U.S.
Note: “Public” refers to publicly traded corporations. “State” refers to state-owned enterprises. “Private” refers to corporations that are not listed on public
stock exchanges.

Table 6. Top 20 Developers of Gas Pipelines (km)

Parent Company Proposed Construction Total Ownership Country
Gazprom 13,442 3,161 16,604 Public / State Russia
Sinopec 1,463 8,731 10,194 State China
PipeChina 6,916 2,096 9,012 State China
Nigerian National Petroleum Corporation 4,637 4,255 8,892 State Nigeria
Gas Authority of India Limited 4,738 3,565 8,303 State India
Petrobras 647 5,344 5,991 State Brazil
China National Petroleum Corporation 2,285 2,647 4,932 State China
Ministry of Petroleum of Iran 1,880 1,900 3,780 State Iran
Transgaz 1,952 1,440 3,392 State Romania
Moroccan National Board of Hydrocarbons and Mines 2,830 0 2,830 State Morocco
Transnet 2,660 0 2,660 State South Africa
Gujarat State Petronet 614 2,042 2,656 State India
TC Energy 1,411 1,237 2,647 Public Canada
Oil and Natural Gas Corporation Limited 2,633 0 2,633 State India
Bangladesh Petroleum Corporation 2,583 0 2,583 State Bangladesh
Indian Oil Corporation Limited 868 1,445 2,313 Public / State India
Turkmengaz 150 2,147 2,297 State Turkmenistan
Gaz-System 948 1,151 2,099 State Poland
Sonatrach 1,828 197 2,025 State Algeria
Jemena 1,971 0 1,971 State China
Note: “Public” refers to publicly traded corporations. “State” refers to state-owned enterprises. “Public / State” refers to state-owned enterprises that are
also listed on public stock exchanges.
IMPACT OF COVID-19
Beginning in March 2020 the Covid-19 pandemic caused Policy Tracker which finds that G20 governments have
severe short-term problems for the oil and gas industry committed US$242 billion to fossil fuel projects since
including plummeting demand, record-low prices, logis- the beginning of the pandemic, compared to US$180
tical difficulties that slowed construction of new pipe- billion for renewables (Energy Policy Tracker 2020).
lines and terminals, and a climate of uncertainty that is Australia’s government is also using the crisis to fund
discouraging investment in new projects. Many govern- fossil projects that had failed to attract funding in a
ments are using Covid-19 relief packages to promote pre-pandemic environment (see this report’s regional
renewables and transition away from fossil projects summary for Australia).
whose pre-pandemic finances were already shaky. In the
U.S., President Biden is proposing a US$2 trillion pro- Net zero emissions pledges by countries, cities,
gram to transition the country to carbon-free electricity local governments, and businesses roughly doubled
generation by 2035. In May 2020 the EU announced that between September 2019 and September 2020 (New
the EU Green Deal prioritizing renewables over fossil Climate Institute 2020); and while many of these
fuels would be central to Europe’s long-term recovery pledges would likely have occurred without the pres-
(IISD 2020). sures of the pandemic, the declining fortunes of the
oil and gas industry have contributed to a climate in
At the same time EU member states are continuing to which political and corporate leaders are more willing
invest in fossil fuels, according to research by Energy to make this pledge.

PIPELINES AND CLIMATE CHANGE

As the impacts of climate change accelerate, CSOs are four think tanks, limiting global warming to 1.5°C
increasingly focusing on supply side measures such or well below 2°C, as outlined by the 2015 Paris
as stopping oil and gas pipelines. In 2017, represen- Agreement, will require significant reduction in
tatives of over 530 CSOs signed the Lofoten Declara- fossil fuel production within the coming decade,
tion, an international manifesto calling for an end with oil and gas production declining by 4% and 3%
to the further expansion of fossil fuel reserves and a respectively between 2020 and 2030 (U.N. Environ-
phase-out in production. Since the initial release of ment Programme 2020). However, based on current
the declaration, the list of signatories has grown to expansion plans, including the nearly US$1.07
over 600 organizations in 76 countries. More recently, trillion in pipelines being developed globally, fossil
civil society groups have launched the Fossil Fuel energy production will increase by 2% per year.
Non-Proliferation Treaty initiative, aimed at spurring The gap between the necessary annual reductions
multilateral action among governments to formally of 3%–4% and the planned increase of 2% annual
wind down production levels and sequester reserves. amounts to a level of production in 2030 dramati-
cally above the level consistent with Paris goals.
From the standpoint of limiting climate change, the
importance of avoiding further expansion of oil and Among initiatives aimed at the supply side, pipelines
gas production has been underlined by several recent have attracted particular attention due to their mas-
studies: sive size. For example, the Nord Stream 2 pipeline will
have the capacity to transport 30 billion cubic meters
■ Burning the Gas “Bridge Fuel” Myth. According to per year of fossil gas from Russia to Europe. When
this analysis by Oil Change International, one of combusted, that gas will produce 106 million tonnes
the co-signers of the Lofoten Declaration, avoiding of carbon dioxide per year, equivalent to the emissions
the development of new oil and gas fields is crucial of 28 large (1000 megawatt) coal-fired power plants.
since the CO2 emissions that would be released The massive size of pipelines makes them high-profile
even from the exploitation of coal, gas, and oil targets for civil society and governmental action on
fields that are already operating or under construc- climate change, which increasingly aims at removing
tion is almost as large as the carbon budget associ- the financial underpinnings of projects. Scalewise,
ated with a 66% chance of limiting global warming pipelines are among the most expensive elements in
to 2°C and twice the carbon budget associated with the fossil fuel system, with some projects costing over
a 50% chance of staying within 1.5°C of warming US$20 billion, or ten times as much as a typical coal-
(Stockman 2019). fired power plant (Przbylo 2019).
■ Five Years Lost: How Finance Is Blowing the Car- In addition to their massive size, pipelines are seen by
bon Budget. This recent survey by thirteen CSOs CSOs as strategically important in expanding the geo-
identified eight of the largest oil and gas expansion graphic scope of extraction. Particularly as extraction
areas, all requiring new infrastructure investments moves to increasingly remote areas such as Canada’s
to proceed. According to the study, exploiting tar sands and Russia’s Yamal peninsula, extraction
these areas fully would use up nearly half of the plans cannot proceed without the building of new
remaining carbon budget that would provide a pipelines and other supportive infrastructure.
66% probability of limiting global warming to 1.5°C
(Urgewald 2020). Further adding to the view of pipelines as crucial targets
for civil society action on climate change is their long
■ Production Gap report. According to this report by lifespan, with 60% of U.S. transmission pipelines being
the United Nations Environment Programme and older than 50 years. Such durability amplifies the related

issue of “lock-in,” since any pipeline built in 2021 will currently in construction or pre-construction develop-
still be operable in 2071, long after the point in time by ment. Such estimates are inherently uncertain, since
which the Paris Climate Agreement calls for fossil fuels they depend on the level of utilization of pipelines.
to be fully phased out (Sittler 2018). “Lock in” refers to The table assumes 50% utilization, which may be too
the fact that once fossil infrastructure has been built, high or too low, depending on region and the point in
it represents a sunk cost that rational producers will time. As shown in Figure 3, at such a utilization rate
ignore as long as the market price is high enough to the combined lifetime CO2 emissions enabled by gas
cover their marginal cost of production, thereby imped- pipelines and oil pipelines under development (con-
ing the transition to renewables (Green 2018). struction or pre-construction) will support a lifetime
increase in oil and gas CO2 emissions of 170 giga-
Table 7 shows the lifetime levels of carbon dioxide tonnes, only 15% less than the projected lifetime CO2
emissions that will be produced by the additional emissions of the global coal plant fleet.
amounts of oil and gas transported by pipelines
Table 7. Oil and Gas Pipelines: Lifetime CO2 (Million Tonnes)

Gas Oil
Region Proposed Construction Proposed Construction Total
North America 19,979 7,630 20,493 6,752 54,855
Asia Pacific 16,642 16,046 6,126 5,882 44,696
Europe 5,501 6,645 5,167 465 17,778
Eurasia 11,338 5,264 0 0 16,602
Middle East 747 1,693 12,559 7,731 22,730
Africa 2,676 1,683 4,496 284 9,139
Latin America 2,911 656 489 0 4,056
Total 59,795 39,617 49,330 21,114 169,857
Note: Assumes average pipeline capacity utilization rate of 50%, 40 year lifespan
Figure 3. Comparative Lifetime CO2 Emissions from Gas Pipelines and Oil Pipelines in Development
(Construction and Pre-Construction) and the Global Fleet of Operating Coal-Fired Power Plants
Sources: Gas and oil pipelines: Global Fossil Infrastructure Tracker, December 2020; coal plants: Global
Coal Plant Tracker, July 2020. Assumes 40-year lifespan for gas pipelines, oil pipelines, and coal plants;
50% utilization rate for gas and oil pipelines; 51% utilization rate for coal plants.

DIVESTMENT AND INSTITUTIONAL RESTRICTIONS

At the close of 2020, divestment policies and institu- then over time widening the scope of the exclusion
tional restrictions related to investments in oil and gas to include a wider set of activities. Similarly, in the
pipelines were far fewer and less comprehensive than oil and gas sector, policy restrictions have initially
similar policies related to coal-fired power plants. focused on narrow areas of activity, mainly Arctic
However, that situation appears to be on the verge of drilling and tar sands extraction. Since the first oil
change, as civil society efforts aimed at restricting and gas restrictions appeared in 2017, the pace of
finance to coal are broadening to also include oil and announcements of such restrictions has quickened:
gas production and infrastructure. four institutions in 2017, five in 2018, 21 in 2019, and
32 in 2020. For the first time, exclusions affecting the
In the coal sector, pressure to divest from coal-related entire spectrum of oil and gas extraction activities
stocks and to implement restrictions against insti- appeared in 2020, announced by Suncorp Group and
tutional financing of coal-related companies traces Government Pension Fund Global (GPFG). But exam-
back a decade. Early student-led campaigns aimed at ination of the policies of other institutions suggests
divestment of college endowment funds from coal- that the scope is likely soon to widen to include pipe-
related companies, while at the same time, CSOs such lines and other infrastructure.
as Rainforest Action Network pushed for private and
public financial institutions to enact formal restric- The policy established by Zurich Insurance Group is
tions against coal-related lending. Initially, campaign- typical. While expressly prohibiting investments in or
ers focused primarily on the most destructive mining insurance for companies generating at least 30% of
practices, in particular mountaintop removal mining. their revenue directly from the extraction of oil from
But as both divestment campaigns and campaigns oil shale, the insurer’s policy also excludes “transpor-
aimed at financial institutions gained traction, they tation infrastructure operators for oil sands products,
widened their scope to include the full gamut of coal including pipelines and railway transportation.”
mining, transport, and power industry enterprises. As
As a practical matter, including midstream infrastruc-
of January 2021, divestment campaigns claim to have
ture in restrictions aimed at the most damaging sorts
secured commitments from 1,307 institutions and
of oil and gas extraction gives a far wider scope to the
58,000 individual investors, covering US$14.5 trillion in
restrictions. For example, financing for three of the
assets (Fossil Free: Divestment 2021). At least 131 banks
most controversial projects of the past several years,
and insurers have announced divestment from coal
the Keystone XL oil pipeline connecting Alberta tar
mining or coal-fired power plants, according to IEEFA.
sands to Gulf of Mexico export terminals, the Baltic
In the coal sector, there has been a clear pattern Pipe Project to transport fossil gas from Norway to
among financiers and institutional investors of first Poland via Denmark, and the Alaska LNG pipeline
adopting narrow restrictions, such as the exclusion connecting Alaska’s Arctic coast to southern Alaska
of lending for mountaintop removal mining, and ports, would all have been affected.

OPPOSITION AND SOCIAL LICENSE

Little more than a decade ago, oil and gas pipelines students, environmentalists, and other First Nations
were lumped together with other infrastructure such clans blocked roads, barricaded access to shipping
as bridges, sewage systems, and telephone lines as ports, and occupied the offices of elected officials. In
rather boring, uncontroversial investments. The the U.S., a series of successful protests and legal actions
fourth phase of the Keystone Pipeline System, Key- against oil and gas pipelines in mid-2020 led some
stone XL, changed the image of pipelines from “safe” energy observers to ask “Are Pipelines Over?” Despite
to “controversial.” Keystone XL attracted sustained a U.S. Supreme Court ruling that would have allowed it
opposition from a coalition of Midwestern landown- to cut across the Appalachian Trail, the Atlantic Coast
ers, Native American tribal governments, and climate pipeline was canceled by its sponsors due to the pros-
activists that culminated in 1,000 nonviolent arrests pect of further protests, delays, and losses on a project
at the White House and the eventual rejection of the whose cost had risen to US$8 billion. Construction of
pipeline by the Obama administration. the Keystone XL pipeline was halted when a Federal
judge ruled that the Army Corps of Engineers had failed
Since Keystone, protests against pipeline construction to properly assess the pipeline’s impact on endangered
have been chronic in much of the world, as part of species. The Dakota Access oil pipeline was ordered
growing challenges to the oil and gas industry’s social to be shut down by a federal judge on grounds that the
license to operate. In Germany, activists near Wrangels- pipeline’s impact on the environment and the Stand-
burg occupied the Nord Stream 2 gas pipeline, interfer- ing Rock Sioux tribe had not been fully considered as
ing with construction. In Mexico, members of the Yaqui required under the National Environmental Protection
tribe disabled a major segment of the Guaymas-El Oro Act (NEPA). This shut-down order was then stayed by an
gas pipeline, forcing the pipeline to be idled. In Canada, appeals court but the Army Corps of Engineers is still
protests by the Wet’suwet’en tribe against the Coastal required to conduct a new, more thorough environmen-
GasLink pipeline in British Columbia in the winter tal assessment.
of 2020 launched a nationwide movement in which
Hudson
Dakota Access gas pipeline
Dawson Creek
Canada Bay Alaska
Edmonton
Line 3 Replacement oil pipeline
Hardisty Keystone oil pipeline Canada
Kitimat
Keystone XL oil pipeline
Calgary Edmonton
British Columbia Alberta

Stanley
Seattle
Superior
Portland
Minneapolis
Toronto
Vancouver
Detroit
Chicago
Salt Lake City
Denver
U.S.A. Patoka
St. Louis
Washington
San Francisco Herrin Montana
Pacific U.S.A.
Ocean
Los Angeles
Coastal Gaslink
pipeline
Phoenix Atlanta
San Diego Dallas
TransIdaho
Mountain
Oregon
Atlantic Coos Bay oil pipeline
Houston Port Arthur New Orleans
Ocean
Chihuahua
Pacific Connector
Malin gas pipeline
Pacific Mexico
Ocean Monterrey Gulf of
Mexico Miami California Nevada Utah
Havana

BIDEN AND PIPELINES

As the biggest developer of oil and gas pipelines by capacity (Table 4), and the second biggest developer (after China) by
length (Table 3), the U.S. will play a key role in determining whether the expansion of global fossil emissions can be brought
under control. The Biden Administration will have the opportunity to change the heavily pro-fossil stance of the Trump
Administration in multiple ways.
■ Pipeline Approvals: A key promise of Biden’s presidential in January 2021 the EPA finalized a new rule that would
campaign was the commitment to cancel Keystone XL, limit the use of scientific studies for which underlying
which has been the center of controversy for over a data is not publicly available. Biden can also rescind a
decade and was halted by the Obama administration new Army Corps of Engineers regulation that would make
after initially being supported by Obama. Equally contro- it easier for pipelines such as the Mountain Valley gas
versial is the Dakota Access oil pipeline (DAPL), which pipeline to cross bodies of water.
was also halted by the Obama administration. Both proj-
■ Diversity and Equity: Deb Haaland, Biden’s nominee for
ects were restarted by the Trump administration.
Secretary of the Interior, would be the first Native Amer-
■ Green Stimulus Bills: In January 2021 the U.S. Congress ican cabinet secretary in U.S. history, and environmen-
overrode a presidential veto to pass an economic stim- talists see her as a potential ally in the fight against the
ulus bill that included a shift in federal energy funding Line 3 oil pipeline in Minnesota. Biden’s nominee for EPA
from fossil fuels to renewables. Despite the U.S. Senate’s Director Michael S. Regan brings a focus on equity and
undemocratic filibuster rule, which requires 60 votes for racial justice, but has been criticized for granting a water
a bill to pass, Biden can shift U.S. policy through add-ons quality certification to the now canceled Atlantic Coast
to future stimulus bills and through the budget reconcili- gas pipeline. Biden’s initial nominees represent a radical
ation process. departure from the Trump administration’s strategy of
filling environmental posts with former lobbyists and
■ FERC Appointments: The success to date of the U.S.
executives for the fossil fuel industry.
gas industry in building out its pipeline network can be
attributed in large part to the Federal Energy Regulatory ■ Ending Fossil Fuel Subsidies Overseas: Biden appointees
Commission (FERC), which rejected just two out of 400 to the U.S. Export-Import Bank (US EXIM) can back up
pipelines applications it received between 1999 and and financially support his administration’s commit-
2017. Yet by late 2020 FERC’s complete embrace of fossil ments to provide international leadership on climate
fuels had begun to loosen slightly, with Trump demoting issues. From 2010–2019 US EXIM directed more than
his own Chairman Neal Chatterjee as punishment for 90% of its funding for overseas energy projects to fossil
supporting carbon pricing and opening energy markets to fuels, and recently provided a US$5 billion loan to Total’s
rooftop solar. With Biden appointees soon assuming a 3–2 carbon-intensive Mozambique LNG project. In December
majority of FERC’s serving commissioners, the agency will 2020 Prime Minister Boris Johnson announced an end to
also have the opportunity to more strongly enforce a 2016 financial support for the fossil fuel sector from the U.K.’s
Obama rule that requires pipelines and other fossil fuel equivalent overseas finance agency.
projects to account for their impact on GHG emissions.
■ Terminals: The Biden Administration can reduce the
■ Executive Actions: Biden has pledged to reverse many of danger from one of the world’s biggest “carbon bombs,”
the more than 80 executive actions taken by the Trump the Permian Basin, by withholding or rescinding federal
Administration to weaken environmental protections and approvals for nine new oil export terminals and sixteen
promote the further use of fossil fuels. In December 2020 new LNG export terminals that are being developed in
the Department of Energy exempted natural gas exports Texas and Louisiana.
from review under the National Energy Policy Act, and

In December 2020 members of the Ojibwe tribe tempo- by proving that Enbridge’s assessment of the pipeline’s
rarily halted construction of the new Line 3 oil pipeline environmental impacts is inaccurate.
through their territory in northern M innesota with the
construction of a ceremonial lodge along the pipeline’s The welfare of oil and gas workers in a decarbonizing
route near the Mississippi River. If commissioned world is also at stake as the U.S. sector shed more than
the 915,000 barrel-per-day Line 3 would be one of the 100,000 jobs in the first three months of the Covid-19
world’s largest oil pipelines and would be carrying pandemic. In September 2020 a survey of oil and gas
a type of oil, Canadian tar sands, that is among the workers in the U.K. found that while most were not
dirtiest. Environmental and Native American groups familiar with the term “just transition,” four in five
have sued to have the pipeline’s state permits revoked would be willing to transition to work in another
and can potentially have its federal permits revoked sector, and more than half would be willing to work in
renewables instead of oil and gas.
NORTH AMERICA
United States
Before the Covid-19 pandemic began in March 2020 Unstoppable FERC vs. Immovable States
the United States was projected to become the world’s
largest exporter of fossil gas by 2024. Construction of The success to date of the U.S. gas industry in building
new fossil gas pipelines and LNG export terminals was out its pipeline network can be attributed in large part
booming as the U.S. gas industry—despite flagging to the Federal Energy Regulatory Commission (FERC),
profits from fracking and domestic sales of gas—antic- which rejected just two out of 400 pipelines appli-
ipated a commensurate boom in new LNG import cations it received between 1999 and 2017. Now, as
terminals in Europe and Asia. state officials and state agencies are taking a stronger
stance in opposition to pipelines, FERC and the fed-
By December 2020 the U.S. gas industry confronted eral government have taken unprecedented steps to
a starkly different reality. Gas prices had collapsed strip power from these local officials and substantially
as a result of the pandemic and numerous pipelines nationalize the process for approving pipelines.
and terminals were being delayed or canceled due to
an inability to obtain financing. Several high-profile The US$1 billion PennEast pipeline is being built to
pipelines had also been canceled or shut down as a carry fracked gas from Pennsylvania to New Jersey.
result of protests, legal challenges, and failures by After its sponsors were unable to acquire necessary
their sponsors and the Army Corps of Engineers to land for the New Jersey portion of the pipeline, FERC
obtain proper permits and conduct thorough envi- took the extraordinary step of granting its sponsor the
ronmental impact assessments. Public concern about right “to exercise the federal government’s power of
climate change intensified as the west coast endured eminent domain to secure necessary rights-of-way for
historic, devastating wildfires, and the southern the construction of an interstate pipeline.” In Septem-
and eastern U.S. endured hurricanes, flooding, and ber 2019 the Third Circuit Court of Appeals found this
drought. These factors and the election of Joe Biden as grant to be a violation of the 11th Amendment, a rul-
President have led environmentalists to hope that the ing which sponsors are now asking the U.S. Supreme
U.S. has reached a crossroads on fossil fuels and that Court to overturn. In December 2020, facing continu-
the country can now move more aggressively towards ing delays and the imminent replacement of Trump’s
renewable energy. FERC Chairman with a Biden appointee, the pipeline’s

main sponsor New Jersey Resources removed the The Jordan Cove LNG Terminal and its feeder, the
pipeline from its long-term financial projections. Pacific Connector pipeline, are opposed by a coalition
that includes nearby residents, farmers, indigenous
The Permian Basin in west Texas and southeast New groups, fisherfolk, conservation groups, land rights
Mexico contains an estimated 50% of all U.S. gas advocates, and many of the state’s leading elected
reserves and has the potential to be the source of officials. The pipeline and terminal were twice denied
approximately 55 billion tons of CO2 by 2050—a “carbon FERC approval and have failed to obtain state permits
bomb” that would consume ten percent of the world’s including a water quality certification certification
allowable carbon budget if we are to have a 50/50 and coastal zone management determination. In
chance of limiting global warming to 1.5°C (Trout March 2020 FERC voted a third time and approved the
2019). (See Section: Financing the Permian Boom.) two projects with Chairman Neal Chatterjee noting,
Designed to bring gas from west Texas to hubs in east “All the signals I see from domestic participants,
Texas, the recently commissioned Permian Highway as well as our international allies [are] that people
gas pipeline is being challenged in separate lawsuits continue to be bullish about the prospects for US
alleging that it violates NEPA, violates the Safe Drink- LNG.” In October 2020 the DC Circuit Court of Appeals
ing Water Act, and that it is improperly classified as an affirmed FERC’s authority to continue seizing land
“intrastate” pipeline, allowing it to escape federal scru- for the projects through eminent domain despite the
tiny and regulation. Two other projects under construc- fact that the terminal and pipeline would be used to
tion in the Permian, the Rio Bravo gas pipeline and export gas to other countries. In January 2021, in a
the Double E pipeline project, are being challenged surprise move that may herald a new approach under
on the grounds that FERC failed to fully consider their the Biden Administration, FERC denied a petition
environmental impact on nearby communities or their by the project’s sponsors to waive Oregon’s regula-
contribution to global GHG emissions. tory authority and, in effect, nationalize the pipeline
approval process.
Canada
Like the United States, Canada continues to plan an fieldwork, and BCEAO issued a “cease and remedy”
expansion of its export pipeline network and new LNG order for any construction activities within 30 meters
export terminals despite cratering demand, histor- of one of these protected wetlands. BCEAO ordered
ically low prices, and increasing skepticism from further assessments for both the damaged wetlands
investors and the public about fossil fuels. and the wetlands yet to be impacted.
Construction of the 670 km Coastal GasLink pipeline An expansion of the Trans Mountain oil pipeline is
from Dawson Creek, British Columbia to the proposed “built on financial quicksand,” according to IEEFA,
LNG Canada Terminal is proceeding with an estimated but is proceeding after the Canadian government
C$250–500 million from Export Development Canada. bought the troubled project from Kinder Morgan for
In June British Columbia’s Environmental Assessment CN$5.6 billion in 2018. The pipeline’s total estimated
Office (BCEAO) found that Coastal Gaslink had com- cost to C
anadian taxpayers has since risen from
menced construction through hundreds of wetlands CN$9.7 b illion to CN$17.1 billion.
without first completing the required environmental

Mexico
In June 2020 the commissioning of the Villa de Reyes- U.S.A.
New Mexico Trans-Pecos gas pipeline
Aguascalientes-Guadalajara pipeline marked the com- Rio Bravo gas pipeline
pletion of the 1,446-km Wahalajara system carrying Fort Stockton Sur de Texas-Tuxpán gasLouisiana
pipeline
Texas
gas from the Waha hub in Texas to Guadalajara. The Ojinaga
Tuxpán-Tula gas pipeline
Tula-Villa de Reyes gas pipeline
system is fed by the Trans Pecos pipeline in Texas Chihuahua Villa de Reyes-Aguascalientes-
which has been classified as an “intrastate” pipeline Guadalajara gas pipeline
Kingsville
that falls under the jurisdiction of the Texas Railroad Coahuila
Commision for most of its length, while only a Port of Brownsville
1,093-foot segment of the pipeline that runs under the Sinaloa Durango
Nuevo León
Rio Grande required review under the United States’ Mexico

Tamaulipas Gulf
of
National Environmental Policy Act. Zacatecas Mexico
San Luis Potosí

Nayarit Aguascalientes
Villa de Reyes
Another key project is the Sur de Texas-Tuxpán Tuxpan

Guadalajara
Querétaro
pipeline (commissioned in 2019), which runs 800 km
Salamanca
Tula
Bay
from Brownsville, Texas through the Gulf of Mexico to Pacific Colima Michoacán
Mexico City
Tlaxcala Veracruz of
Campeche
Tuxpán, Veracruz. At Tuxpán, the pipeline feeds into Ocean Morelos
Mexico’s existing national network and will eventually Guerrero

Oaxaca
Guatemala
Chiapas
connect with the proposed Tuxpán-Tula and Tula-Villa
de Reyes pipelines and join the Wahalajara network at
Villa de Reyes. Pacific
Medellín
Cali
Bogotá Guyana
Atlantic
Ocean Colombia Suriname Ocean
Quito
LATIN AMERICA Ecuador Manaus Belem

Vitorino Freire
Fortaleza
Argentina has the second largest shale gas reserves in Recife
Peru
the world, and burning all of the gas in the Neuquén Lima Brazil Salvador
basin would consume 11.4% of the world’s 1.5 carbon Cusco
Puno Brasília
budget. In July 2020 the Argentine government pro- La Paz Bolivia
Arica
posed a new 2,055-km pipeline from Vaca Muerta in Ribas do Rio Pardo
the Neuquén basin to Brazil after a proposed 1,040-km Pacific Paraguay Rio de Janeiro
São Paulo
pipeline from Vaca Muerta to Buenos Aires failed to Ocean Asunción
Curitiba
obtain financing.
Porto Alegre
Chile
Córdoba Atlantic
Peru plans to revive and expand its proposed 1,050-km Argentina Uruguay Ocean
Montevideo
Southern gas pipeline (SIT), which has been stalled
Santiago Buenos
Aires
Southern gas pipeline (SIT)

since 2017. If constructed, the newly revamped proj- Tratayen Vaca Muerta-Brazil gas pipeline
ect would bring fossil gas to 900,000 households in GASUN gas pipeline
southern Peru over the next 35 years. A tender for the

US$4.5 billion project is scheduled for 2021, with com-
pletion of the pipeline anticipated in 2025 or 2026. Yumbo, where it will link up with Colombia’s existing
gas pipeline network. Canacol is currently seeking an
In Colombia a tender is scheduled for early 2021 for environmental permit for the first phase of the 508-km
the 110-kilometer Buenaventura-Yumbo gas pipeline, Northwestern gas pipeline, which will link Colombia’s
which will transport fossil gas inland from the new Jobo gas fields with Medellin, Mariquita and Bogotá
Pacific LNG Terminal on Colombia’s Pacific coast to between now and 2028.

EUROPE
The European Union’s climate goal of full decarboniza- potential overinvestment of tens of billions of EUR,
tion by 2050, with an interim target to cut greenhouse supported by European public funds (Artelys 2020).”
gas emissions to at least 55% below 1990 levels by 2030,
is at odds with the glut of gas pipelines and LNG ter- The European Investment Bank, the “EU’s bank” and
minals operating across most of the bloc’s 28 member owned by the member states, has read the runes and
states. This situation is set to worsen if a list of cur- announced an end to its financing of oil and gas by the
rently proposed pipelines and terminals are realized. end of 2021. The chief architect of the bank’s policy has
pointed to both the incompatibility of further financial
Global Energy Monitor research in February 2020 support to the sector with the EU’s climate targets and
found that, despite the existence of already large the looming stranded asset risks (Inman 2020).
excess gas infrastructure in the EU, companies are
developing projects which would add 233 billion cubic In contrast, Germany, the EU’s most powerful state, is
meters per year to the EU’s gas import capacity. These demonstrating the political and reputational risks of
plans involve 12,842 kilometers of pipeline at a cost backing gas. As it holds out in the face of international
of €52 billion as well as an increase in LNG terminal opposition and a U.S. sanctions regime against the
capacity of 54% which requires investment of €12 bil- completion of Gazprom’s Nord Stream 2 gas pipeline,
lion. More than €25 billion of the funding could come the German government is also facing public oppo-
from EU public subsidies with the European Commis- sition over its potential state funding support for
sion’s blessing (Inman 2020). the proposed Goldboro LNG Terminal in Nova Sco-
tia, Canada, which would export to planned import
This level of proposed build-out of gas infrastructure terminals in Germany. One such project proposal, the
assets is out of sync with official Brussels projections Wilhelmshaven LNG Terminal in Lower Saxony, was
in the last couple of years on how EU gas usage has canceled in November due to a lack of gas demand.
to be reduced by at least 30 percent by 2030 and by Other proposed German import projects such as the
90 percent by 2050 if Europe is to meet its climate Brunsbüttel LNG Terminal may experience a simi-
change targets. Civil society organizations includ- lar fate as political and public opposition mounts in
ing Global Witness, WWF Europe, and Corporate Europe against importing gas produced by fracking
Europe Observatory have asserted that with EU gas tight shale formations in the U.S.
consumption declining due to the rapid uptake of
renewable energy, and the need for further cuts to
Finland
meet the decarbonization goals, expanding the gas Norway
Helsinki
system makes no sense (Global Witness 2020). These Oslo

Sweden Ust-Luga
organizations point to the influence of European gas Stockholm
companies over EU gas policy, coordinated across Estonia Russia

the continent since 2009 by the European Network
of Transmission System Operators for Gas (ENTSOG)
trade association, as a driver of excess gas infrastruc- Latvia
Denmark
ture capacity. Such arguments were affirmed by an Baltic
Copenhagen Sea
examination of EU gas supply security by consulting Lithuania
firm Artelys, which concluded that “existing EU gas
infrastructure is sufficiently capable of meeting a Greifswald
variety of future gas demand scenarios,” and that most Poland Belarus
Germany
proposed expansion projects were “unnecessary from Berlin
Nord Stream 2 gas pipeline
Warsaw
a security of supply point of view, and represent a

CASE: EAST MED GAS PIPELINE

Originally proposed in 2012 following the discovery of Vienna
Ukraine
large gas reserves within the exclusive economic zones of Austria Budapest
Hungary
Cyprus and Israel, the US$6 billion East Med gas pipeline Russia
Romania
has become a focus point in the debate over how the EU Croatia Anapa
Bucharest
plans to pursue and financially support its decarbonization Serbia
Black
Bosnia and
plan. The EU has already awarded the project US$40 million Herzegovina Bulgaria
Sea Georgia
for feasibility studies under its Projects of Common Interest Luleburgaz
Italy
(PCI) program. At a proposed 1,900 km, East Med would be Otranto
Komotini Istanbul
the world’s longest and deepest offshore pipeline, carrying Igoumenitsa

Turkey
Greece
between 10 and 20 billion cubic meters annually of fossil Athens
gas from Israel and Cyprus via the island of Crete to main-
land Greece. From there it would hook up with the proposed
Mediterranean
Sea Vasilikos Syria
Poseidon gas pipeline to transport gas across the Adriatic Lebanon Iraq
Sea to southern Italy. European environmental groups have East Med gas pipeline Palest. Terr.
called on the European Commission to remove East Med Poseidon gas pipeline Jordan
TurkStream 2 gas pipeline Israel
and Poseidon from the PCI program and further European Cairo
public funding support as they are incompatible with EU Libya Saudi

Egypt
climate targets and risk becoming stranded assets due Arabia
prospects have also been caught up in the Red
escalation of
to projected declines in gas demand and already existing Sea
regional tensions which saw a “collision” between Greek
excess import capacity.
and Turkish warships in the East Mediterranean in August
Major players including ExxonMobil, Shell, and Total are 2020, a flare-up rooted in long-standing grievances includ-
engaged in East Mediterranean exploration and licensing ing over the ownership of hydrocarbon reserves and gas
negotiations. Yet despite concerted statements of political export routes. These underlying tensions are not expected
support from Cyprus, Greece, Israel, the EU, and also the to disappear quickly and will continue to present a major
U.S., East Med has made limited commercial progress challenge to project promoters attempting to realize a
towards a hoped for start date of 2025. The project’s highly complex, mega gas pipeline.
AFRICA AND MIDDLE EAST

Between 2011 and 2014 approximately 20 percent of according to Total CEO Patrick Pouyanné, is that this
global oil discoveries occurred in Africa, along with highly contested project is “in line with [Total’s] strat-
nearly 50 percent of global gas discoveries between egy of acquiring long-term resources at low cost.”
2011 and 2018 (Enerdata 2020). The East African states
of Kenya, Tanzania, Mozambique, and Uganda now Oil and gas extractivism by multinationals in Africa
make up one of the world’s top hydrocarbon hotspots. continues, however, to come with high costs and risks
Western and Chinese oil and gas majors most notably attached–and not just for millions of inhabitants, the
are lining up to produce and transport the region’s environment, and the climate. For the continent’s
reserves for ultimate shipping to international markets pipelines to advance, regional infrastructure deals are
across the Indian Ocean. One of the most controversial required. These remain vulnerable to political and
pipeline developments is Total and China National security challenges, a lack of clear regulatory frame-
Offshore Oil Corporation’s Uganda-Tanzania crude works, the prevalence of corrupt practices on all sides,
oil pipeline–see more details below. The bottom line, protracted wrangling between state governments and

promoter companies, and a host of other complex, prices. The mammoth Nigeria-Morocco gas pipeline,
unstable local realities. planned to run along the west coast of Africa for 5,660
km and connect to every coastal state, would take 25
The Uganda-Tanzania pipeline was born out of uncer- years to complete and faces myriad obstacles. Forty
tainties over the now canceled Uganda-Kenya crude oil African and international organisations have raised
pipeline. Subsequently compelled to go it alone with fundamental environmental, social, and economic
Tullow Oil and Total, the Kenyan government-backed concerns in a joint declaration against the project
Lokichar-Lamu oil pipeline is facing significant (CADTM 2018).
delays, made worse by Covid-19 and plunging oil
Chinese presence and influence

China’s national oil industry and its new conglom-
erate PipeChina are continuing to face down these
challenges after entering Africa’s oil sector 25 years Morocco
Algeria Libya
ago. With an upstream presence in almost 20 African

states, China’s state-owned giants are pressing for-
ward and seeking to expand their influence via major Mauritania
Mali Niger
pipeline projects, usually in tandem with significant N'Gourti
Senegal
Chinese financial support. This is part of a long-term Burkina
Chad
Sudan
Kano
Faso
effort now enshrined under the Belt and Road Initia- Guinea Benin
Nigeria
tive which intertwines global economic, geopolitical Ivory
Liberia Coast
Porto-Novo Lagos
and strategic expansion with supplying China’s grow- Kwa Ibo
C.A.R.
Atlantic Gulf
Cameroon
ing demand for domestic energy. Ocean of
Guinea
In 2019 CNPC abandoned plans to build the Niger Gabon

D.R.C.
Chad oil pipeline over security concerns and disputes
Atlantic
with the Chadian government and is instead advanc- Ocean
ing with the US$7 billion, 90,000 barrels per day Niger Niger Benin oil pipeline
Angola
Trans Nigeria gas pipeline
Benin oil pipeline. And, as part of long-delayed gasifi-
cation ambitions in Nigeria, Bank of China is provid-
ing the under-construction Trans Nigeria gas pipeline
with US$2.6 billion in debt financing. More than interests” on the continent. This has been accom-
US$36 billion of Chinese foreign direct investment panied over the past two decades by almost US$150
has been pumped into African oil and gas projects billion in Chinese lending across all sectors to African
between 2005 and 2019 (American Enterprise Institute governments and state-owned companies, resulting in
2020), establishing a so-called “playground for Chinese mounting debt distress for various states.

Development deficits mount

Ongoing African pipeline expansion, heralded as to the World Meteorological Organization, is that Afri-
providing economic development, is bringing a rash can nations are already spending between 2% and 9%
of environmental, social, and economic consequences of their gross domestic product on climate adaptation
while helping to accelerate climate change. As this and mitigation measures.
build-out continues, the unignorable reality, according
CASE: UGANDA-TANZANIA CRUDE OIL PIPELINE

The Uganda-Tanzania crude oil pipeline, or East African Shortcomings in these assessments carried out by
Crude Oil Pipeline (EACOP), is a proposed US$3.5 billion, Total, allege Friends of the Earth France and Survie, have
1,444-km pipeline that would transport 216,000 barrels downplayed the number of people whose human rights are
of oil a day from Uganda’s Albertine Graben oilfields to being infringed in the Great Lakes communities along the
the Tanzanian port of Tanga for shipment to international pipeline route. Based on collected testimonies and field
markets. After several years of protracted negotiations, the surveys conducted in 2020, the French NGOs estimate that
host governments reached an agreement on the pipe- the rights of 100,000 people–including property, education
line’s construction in September 2020. A final investment and freedom of expression rights–are being compromised
decision from the project promoters Total and the China in a worsening humanitarian crisis brought by the project
National Offshore Oil Corporation, which had been expected (Friends of the Earth France 2020). The pipeline threatens
to conclude before the end of 2020, is still to be finalized. water and food access for millions of people, with 460 km
US$2.5 billion in loans will be needed to finance the proj- traversing the freshwater basin of Lake Victoria. The proj-
ect’s construction and several international commercial ect’s scale means that many critical ecosystems, including
banks are currently acting as financial advisors despite the Uganda’s Murchison Falls National Park, are at risk and
many risks attached (BankTrack 2020). nearly 2,000 square kilometers of protected wildlife habitats
could be negatively impacted (WWF 2017). It has also been
Legal challenges are being mounted by CSOs at the East
estimated that the oil flow through EACOP, when burned,
African Court of Justice and in French courts, as part of
would result in 34 million tonnes of carbon emissions per
efforts to ensure that the promoters address failings in the
year–equivalent to the annual emissions of Denmark.
project’s environmental and social impact assessments.
Middle East
In the Middle East, ten pipelines are in construc- Iran-Pakistan gas pipeline, also known as the Peace
tion and an additional seven are in pre-construction Pipeline. Construction of the IGAT 9 gas pipeline has
development, amounting to 10,037 km of new pipe- been completed, and operations are expected to begin
lines overall and adding 1.8 million barrels per day of in 2022. The Pakistan portion of the Iran-Pakistan gas
oil capacity and 1 million barrels per day equivalent pipeline has been completed, but the Iran portion has
of gas capacity. Nine of these pipelines are located been delayed by U.S. economic sanctions. In Oman,
within Iran or connect Iran to neighboring countries. three major pipelines are in construction: Oman
Among the most significant projects under devel- Main Line–Ras Markaz oil pipeline, Fahud-Sohard gas
opment in the region are the IGAT 9 gas pipeline, pipeline, and Fahud-Sohard NGL pipeline.
connecting Azerbaijian to the Persian Gulf, and the

CHINA
China’s pipeline projects aim to support major West-East gas pipeline 4
increases in the country’s gas supplies from five differ- Xinjiang Coal-to-Gas pipeline project Russia
Russia–China East Line Domestic Extension Phase III
ent sources: imported LNG, gas imported from Central
Russia–China East Line Domestic Extension Phase II
Asia, gas imported from Russia, gas from domestic Russia–China East Line D omestic Extension Phase I Blagoveshchensk
fossil gas sources, and gas produced from coal seam Kaz.
Mongolia
projects. China is on a path to surpass Japan as the Changchun
world’s leading LNG importer by 2022, with twelve Uzb. Kgz.

new LNG import terminals under construction. Over- N.K. Sea
Beijing
of
Tjk. Irkeshtam
Zhongwei
China Japan
all, the expansion of China’s access to sources of gas
Seoul
Afg. Linyi Yellow S.K.

has spurred the world’s largest expansion of gas pipe- Pakistan
Sea Ōsaka
Chengdu Shanghai
lines on a length basis (as shown in Table 3), including Quzhou
East
China
Nepal Bhutan
4,646 km of gas pipelines under construction and a Guilin Nanping
Sea
Bang. Shaoguan
further 13,345 km of gas pipelines in pre-construction India Myanmar Hong Kong Luzon
Strait Philippine
development. In light of the expected 50-year lifespan Mumbai Laos Sea
Arabian Thailand Phil.
of oil and gas pipelines, this major expansion is at Sea Bay Andaman Bangkok South
Manila
of Sea China
odds with China’s recent pledge to ameliorate climate Bengal Gulf
of
Sea
change by becoming carbon neutral by 2060. Thailand
The longest of China’s new pipelines is the 8,372-km through the 1,000-km Central Asia–China gas pipeline
Xinjiang Coal-to-Gas pipeline project which has been Line D, which is scheduled for completion in 2022.
partially commissioned and was scheduled to be fully
commissioned by the end of 2020. The West-East In October 2020, the Chinese central government
gas pipeline 4 will run 3,123 km from China’s west- completed the consolidation of several pipeline com-
ern border, carrying gas sourced in Turkmenistan, panies to form PipeChina, with the goal of creating a
Uzbekistan and Kazakhstan. The first 1,067-km phase more integrated national gas network and increasing
of the Russia-China East Line Domestic Extension was the country’s use of gas. As noted above (see “Owner-
commissioned in 2019, and the pipeline’s 1,110-km ship: Who Is Building Pipelines?”), this consolidation
second phase was scheduled to be completed in 2020. is expected to make PipeChina the world’s leading
China also plans to boost exports from Turkmenistan builder of both oil and gas pipelines.
RUSSIA
The development of the Arctic LNG 2 Terminal, Yamal as the May 2020 spill of 21,000 tons of diesel into frag-
LNG Terminal, and several new pipelines on the Yamal ile wetlands near the Norilsk Nickel power station.
peninsula have been described as Russia’s “answer”
to the U.S. shale boom. Two pipelines carrying a Russia commissioned the 930-km TurkStream gas
combined 115 bcm/yr already run to Ukhta from the pipeline in January 2020 but completion of the
peninsula’s Bovanenko field, which holds an esti- TurkStream 2 gas pipeline has been slowed by eco-
mated 4.9 trillion cubic meters of gas. A third line, the nomic sanctions imposed by the U.S. in July 2020.
69 bcm/yr Bovanenkovo-Ukhta III gas pipeline, is in TurkStream 2 is 1,646 km and would deliver Russian
development with an estimated completion date of gas to Bulgaria, Serbia, and Hungary. In eastern Russia
2023. Environmentalists warn that melting permafrost the 2,022 km Power of Siberia gas pipeline began
in the Russian Arctic will lead to more disasters such delivering gas to China in 2019. An 800-km extension
of the pipeline is scheduled for completion in 2022.

SOUTH AND SOUTHEAST ASIA

Two countries that have been primarily depen-
Jagadishpur-Haldia-Bokaro-Dhamra gas pipeline (JHBDPL)
dent on coal to meet their energy needs, India and
Jagadishpur-Haldia-Bokaro-Dhamra gas pipeline (JHBDPL)
Bangladesh, are transitioning to gas and investing Mallavaram-Bhopal-Bhilwara gas pipeline
heavily in pipelines and LNG import terminals, a Kochi-Koottanad-Bangalore-Mangalore
Punjab gas pipeline Tibet
Punjab Uttarakhand
Kochi-Koottanad-Bangalore-Mangalore gas pipeline
development that would lock in decades of new Haryana
Ennore-Tuticorin gas pipeline
Balochistan Nepal
GHG emissions. Moharipur
Sikkim
Pakistan Rajasthan
Uttar Pradesh
Assam
Mushi Bihar
In India, gas imports rose from 31% of total gas Sindh Phoolpur
Dobhi
Bangladesh
supply in 2012 to 50% in 2019 (U.S. EIA 2020). Six LNG Madhya Pradesh Jharkhand
Kolkata
Gujarat
India
import terminals were commissioned during this
Chhattisgarh
time and four more are scheduled to come online Daman and Diu Cuttack
Maharashtra
by 2023 (Plante et al 2020). However the utilization Mumbai
of these terminals depends on plans to expand the Kakinada

Arabian
gas transmission network to deliver gas inland. The Sea Goa Andhra
Karnataka Pradesh
Indian government is making its first ever direct grant Chennai
Mangalore Bay
for the construction of a gas pipeline, contributing Bengaluru of
Puducherry Bengal
US$770 million toward the US$1.9 billion Jagadishpur- Laccadive
Tamil Nadu
Madurai
Haldia-Bokaro-Dhamra gas pipeline that will carry Sea Kochi
gas from the Dhamra LNG Terminal. As of August Tirunelveli
Sri Lanka
2020 the 750-km northwestern Phulpur-Varanasi-
Gaya-Patna-Barauni section of this pipeline had been
commissioned. In northeast India the 30.9 bcm/ issue of “cascading tariffs” that accrue as gas travels
year Ennore-Tuticorin gas pipeline is being built to through multiple pipelines.
deliver gas from the recently commissioned Ennore
LNG Terminal. In southern India construction of In Bangladesh a transition from coal to gas-fired
the 6.6 bcm Kochi-Koottanad-Bangalore-Mangalore power plants is accelerating as coal projects have
gas pipeline (KKBMPL) to carry gas from the Kochi failed to attract financing from China and Japan.
LNG Terminal has been opposed by residents who Currently there are 480 km of gas pipeline under
say the pipeline will impact paddy cultivation and is construction and a further 2,740 km of gas pipelines
being routed in between houses that are as little as in development. Imports from two new floating
five meters apart. Overall the number of gas pipe- storage and regasification units (FSRUs) have been
lines under construction and in development in India less than anticipated due to the difficulty of operating
would more than double the country’s pipeline capac- them during monsoon season, and more recently
ity from 181 bcm/year to 392 bcm/year. In June 2020 due to the Covid-19 pandemic. The 12.4 bcm/yr
India’s Petroleum and Natural Gas Regulatory Board Moheshkhali-Anowara parallel gas pipeline is being
relaxed licensing restrictions for building new LNG built to deliver gas from the newly commissioned
terminals and PNGRB’s chair pledged to address the Moheshkhali FSRU.

AUSTRALIA
In August 2020 the National Covid-19 Commission
(NCC) recommended that the Australian government
dramatically increase spending for new pipelines, Coral
Queensland Wallumbilla
gas hubs, and other gas infrastructure as part of a Brisbane

Sea
“gas-fired recovery” promised by Prime Minister

Scott Morrison. Under the guise of addressing the
Covid-19 crisis, the NCC recommendations would Australia
Pacific
Ocean
have “taxpayers subsidising the gas industry up and
New South Wales
out of Covid-19 for the next 30–40 years,” according to Newcastle
Bruce Robertson of IEEFA. The NCC has been led by Sydney
Andrew Leveris, a Saudi Aramco board member, and Adelaide
Tasman
Nev Power, the CEO of Fortescue Metals, and report- Sea
edly developed its recommendations with help from Victoria

Melbourne
the Dragoman lobbying firm, whose clients include
numerous gas companies. Queensland Hunter gas pipeline
Among the projects targeted for government support is

the proposed Queensland Hunter gas pipeline, which residents, and damage to biodiversity. In August 2020,
will cost an estimated A$1.2 billion and run from the 25 leading Australian scientists warned that for the
Wallumbilla gas hub in Queensland to Newcastle, country to achieve net zero emissions by 2040–2050
South Wales. The pipeline was originally proposed and become a Paris-aligned economy “requires a rapid
in 2009 as part of a plan to bring coal seam gas from phase-out of existing fossil fuel infrastructure, leaving
the Narrabi project to market; shortly after the NCC no room for expansion of the gas industry.” In August
issued its recommendations, the Independent Plan- 2020 the Victorian government refused to delay the
ning Commission (IPC) of New South Wales finally environmental assessment process for the Crib Point
approved a plan for 850 coal seam wells in and around LNG Terminal, which would feed the proposed Crib
the Pillaga State Forest. According to local landowners, Point Pakenham gas pipeline, despite protests that Vic-
environmentalists, and First Nations communities, toria’s Covid-19 lockdown was preventing citizens from
the pipeline and CSG wells will lead to contamination participating in the assessment process.
or depletion of ground and surface water, pollution
of waterways, health impacts on workers and nearby

FINANCING THE PERMIAN BOOM

The ability of the oil and gas industry to overcome ■ the developers of oil and gas pipelines originating
near-term challenges to its Permian Basin expansion in the Permian Basin, and to the developer of two
plans, such as the Covid-19 pandemic and the collapse pipelines transporting Permian gas in Mexico;
of prices, will depend in part on the appetite of banks
and governments to continue funding midstream ■ a handful of major oil and LNG export terminals
infrastructure. Should they decide to do so, it will be in along the U.S. Gulf Coast supplied by Permian
spite of the industry’s long-term decline and growing pipelines.
concerns over the global climate emergency.
US$10.8 billion was identified for pipelines and
Research by Global Energy Monitor finds that US$91.5 billion for export terminals. The financing
US$102.3 billion in debt financing (loans and bond came from 107 financial institutions from around
issues) has been provided since 2014 to: the world, predominantly commercial banks but also
private equity firms, investment funds, development
banks, and export credit agencies.
Muddle in the Middle

Tracking the funding sources of Permian pipelines Recent analysis shows the dependence of certain
is complicated by the fact that many projects are Permian midstream players on corporate debt and
financed through corporate loans and bond issues points to growing evidence of their financial vulner-
which are provided and arranged by banking con- ability (Bailout Watch 2020). Since the U.S. Federal
sortia for general business use by many midstream Reserve began its bailout of corporate debt markets
operators. Moreover, most individual banks disclose in late March, energy companies with significant
scant information about their general funding for interests in the Permian have issued corporate bonds
the oil and gas sector. Information about oil and gas worth tens of billions of dollars. Some, including
terminals by contrast is more readily available owing Enterprise Products, ExxonMobil, Marathon Petro-
to the sector’s far greater reliance on dedicated project leum Corporation, The Williams Companies and
finance and bond issues tied to project refinancing. Sabine Pass LNG, have also had these bonds directly
purchased by the Federal Reserve under its Secondary
Support for terminals explains the presence of Bank of Market Corporate Credit Facility. Despite receiving
America, Goldman Sachs, JPMorgan Chase and Mor- what amounts to direct government aid, ExxonMobil,
gan Stanley in Table 8 on the next page, despite the Marathon and Williams are among twelve U.S. fossil
low pipeline figures identified for these well-estab- fuel companies which have received downgrades of
lished midstream backers. Citi, with more than half of their short-term debt, long-term debt, credit or default
its oil and gas business portfolio tied to North Ameri- ratings from major credit rating agencies in the last
can markets, does not feature in Table 1 but reported six months. Citi rated 22% of its funding to oil and gas
that it funded US$2.3 billion in the midstream oil and companies as CCC or lower as of Q3 2020, up from
gas sector in Q3 2020 alone. 20% in Q2 and only 6% in Q4 2019.

Due to the research providing only partial and frag- Bank for International Cooperation (Aitken 2020).
mented finance data for individual projects, dis- Eleven of the top 20 pipeline banks are among the
cernible trends are difficult to establish, though the prominent funders of export terminals, indicative of
institutional appetite for Permian pipeline financing is the contractual and ownership relationships between
clearly international in nature. Japanese commercial Permian pipeline and Gulf Coast terminal promoters
banks are prominent, with coordinated export credit and their ties to reliable, oil and gas friendly financial
support for LNG terminals coming from the Japan backers.
Table 8. The top 20 identified funders of Permian oil and gas pipelines and Gulf Coast export terminals, 2014 to November 2020
Financier Country Pipelines (US$) Terminals (US$) Total (US$)
Sumitomo Mitsui Banking Corporation Japan 1,081,270,000 6,345,250,000 7,426,520,000
MUFG Japan 1,340,110,000 5,710,060,000 7,050,170,000
Mizuho Japan 878,540,000 5,320,320,000 6,198,860,000
Japan Bank for International Corporation Japan 0 5,195,000,000 5,195,000,000
Société Générale France 152,500,000 4,676,795,000 4,829,295,000
ING Netherlands 227,530,000 4,423,350,000 4,650,880,000
Royal Bank of Canada Canada 323,800,000 3,568,060,000 3,891,860,000
HSBC United Kingdom 70,000,000 3,162,120,000 3,232,120,000
Scotiabank Canada 373,800,000 3,212,980,000 3,586,780,000
Goldman Sachs United States 175,000,000 2,883,620,000 3,058,620,000
JPMorgan Chase United States 70,000,000 2,892,480,000 2,962,480,000
Morgan Stanley United States 0 2,817,540,000 2,817,540,000
Crédit Agricole France 52,500,000 2,678,920,000 2,731,420,000
Credit Suisse Switzerland 0 2,358,980,000 2,358,980,000
Bank of America United States 323,800,000 2,249,907,000 2,573,707,000
IFM Investors Australia 0 2,243,000,000 2,243,000,000
Santander Spain 117,740,000 2,078,810,000 2,196,550,000
Natixis France 114,030,000 2,033,900,000 2,147,930,000
Intesa Sanpaolo Italy 257,070,000 2,124,900,000 2,381,970,000
BBVA Spain 150,000,000 1,876,440,000 2,026,440,000

Construction boom during a bust in prices and demand

Since the U.S. Congress lifted a long-time ban on for pipelines carrying Permian oil and gas in Table 9
crude oil exports in December 2015 and set in motion below, commercial banks primarily have supported
booming production levels in the Permian Basin, the industry’s plans for a rapid expansion of takeaway
midstream companies have raced to remove export capacity from the Permian over the last five years. In
bottlenecks in order to get soaring volumes of largely doing so they have helped bring about the pipeline
fracked, Permian-sourced hydrocarbons to interna- overbuild in the region which is now causing wide-
tional markets. As shown by the confirmed financing spread financial tremors for project promoters.
Table 9. Financed pipelines transporting Permian oil and gas

Start Debt Finance
Pipeline Capacity Status Year Financial Close (US$)
Roadrunner Gas Pipeline, Phase 1 640 MMcf/d Operating 2019 2015 230,000,000
Trans-Pecos Gas Pipeline 1400 MMcf/d Operating 2017 2015 646,980,000
Waha-San Elizario Gas Pipeline 1135 MMcf/d Operating 2017 2015 508,220,000
La Laguna-Aguascalientes Natural Gas Pipeline 1319 MMcf/d Operating 2019 2016 737,000,000
Villa de Reyes-Aguascalientes-Guadalajara Gas Pipeline 886 MMcf/d Operating 2020 2016 485,000,000
Agua Blanca Gas Pipeline 1250 MMcf/d Operating 2018 2017 141,000,000
Epic Natural Gas Liquids Pipeline 600,000 bpd Operating 2019 2018 800,000,000
Agua Blanca Gas Pipeline Expansion 1250 MMcf/d Proposed 2021 2018 113,000,000
Epic Oil Pipeline 590,000 bpd Operating 2020 2019 1,075,000,000
Gray Oak Oil Pipeline* 900,000 bpd Operating 2019 2019 & 2020 2,630,000,000
Permian Highway Gas Pipeline 2100 MMcf/d Operating 2020 2019 545,000,000
Wink to Webster Oil Pipeline 1,000,000 bpd Operating 2020 2020 657,260,000
Whistler Gas Pipeline 2000 MMcf/d Construction 2021 2020 2,079,000,000
*Funding for the Gray Oak Pipeline comprises a US$1.23 billion initial project finance loan in June 2019 and three bond issues in September 2020 worth
US$1.4 billion for refinancing of the project. Information on the institutions which provided funding for individual pipelines are available at GEM.wiki by
clicking on the project links.
The Covid-19 pandemic and subsequent plunge in oil also pointed to the “structural overbuild” of long-haul
prices have impacted the Permian boom in drastic crude oil pipeline capacity between the Permian and
fashion. The first nine months of 2020 saw 27 oil and the Gulf Coast as pre-dating the March 2020 price
gas producer bankruptcies registered in Texas (Haynes crash. According to the energy consultancy, “For mid-
and Boone 2020), and almost 65,000 job losses across stream companies that made huge investments based
the oilfield services sector in Texas–the hardest hit on pre-Covid-19 production forecasts, low utilization
U.S. state–and New Mexico. U.S. Energy Information now presents a challenge. Midstream infrastructure
Administration estimates show a 10.7% fall in Permian projects, many of which were financed with high
oil production since March 2020 to approximately 4.24 levels of debt, will struggle to deliver projected returns
million barrels per day in December. At this produc- (Wood Mackenzie 2020).”
tion level the region still has excess pipeline capacity
of roughly 3 million barrels per day, according to the Supposed to have been a pioneering year for Permian
energy data firm East Daley Capital Advisors, which pipeline expansion, five pipeline start-ups alongside
expects excess capacity to grow further to 4 million two cancellations and various shelved or delayed proj-
barrels per day by early 2021. Wood Mackenzie has ects indicate the region’s difficulties in 2020.

Whistler gas pipeline

Permian Highway gas pipeline
Permian Global Access gas pipeline U.S.A.
Lone Star Express NGL pipeline
Dallas
Pecos Trail gas pipeline
Midland
Louisiana
Coyanosa
Texas
Gillis
Houston
Altair
Agua Dulce Corpus Christi
Gulf
Mexico of
Mexico
Monterrey
Project Start-ups Project Cancellations
■ The 590,000 barrel per day Epic oil pipeline from ■ Enterprise Products Partners abandoned its
the Permian Basin to Corpus Christi, Texas, 450,000 barrels per day Midland to ECHO 4 oil
entered into full service in April. pipeline in September despite having committed
oil shippers signed up to the project. Enterprise
■ The Villa de Reyes-Aguascalientes-Guadalajara gas said the cancellation was due to necessary cuts in
pipeline, the southernmost segment of the Waha- its capital expenditure budget, though industry
lajara network bringing Permian gas to Mexico via observers believe the surprise move is proof of
a series of interconnecting pipelines, entered into excess Permian pipeline capacity given the low
service in June. levels of production in the basin arising from the
US$40 oil price.
■ The Lone Star Express natural gas liquids pipeline
expansion was completed in September. ■ Marathon Petroleum Corporation canceled its
500,000 barrels per day Belvieu Alternative natural
■ The main segment of the 1 million barrel per day
gas liquids pipeline in May.
Wink to Webster oil pipeline started transporting
oil in October.
■ The Permian Highway gas pipeline entered full

service in January 2021.

Projects Shelved or Delayed
■ Phillips 66 and Plains All American Pipeline’s ■ Kinder Morgan’s proposed Permian Pass gas
joint venture, the 400,000 barrels per day Red Oak pipeline is facing a delayed final investment deci-
oil pipeline was shelved in March as Phillips 66 sion of up to two years and an uncertain future,
announced US$700 million in cuts to its capital according to company sources, as no customers
expenditure budget. have been lined up for the project due to low
prices.
■ Namerico Energy, a private-equity backed logistics
company, shelved its Pecos Trail gas pipeline in ■ Tellurian shelved its proposed US$4.2 billion
April. The company’s president told the Financial Permian Global Access gas pipeline in December
Times, “We’re just being responsive to what’s going due to the company’s financial difficulties which
on, recognizing that the upstream sector is not saw it receiving a delisting notice from Nasdaq
going to see the growth that people had expected.” in September. This and two other gas pipelines
shelved in 2020 by Tellurian–the Haynesville
■ The proposed 1,000,000 barrels per day Jupiter oil Global Access pipeline and the Delhi Connector
pipeline, designed to supply Permian oil to Jupiter pipeline–were intended to supply the company’s
Energy’s delayed Brownsville Oil Terminal in troubled and delayed US$30 billion Driftwood LNG
Texas, was put on hold indefinitely. The pipeline Terminal in Louisiana.
received undisclosed funding from the private
equity firm Charon System Advisors in October ■ A string of proposed deepwater oil-export ter-
2018. In 2019 Jupiter expected both the pipeline minals offshore Texas in the Gulf of Mexico are
and terminal to be operational in Q4 2020. struggling to advance. The only two of these proj-
ects which are considered to be viable, Enterprise
■ Two proposed 500-mile gas pipelines, the Products’ Sea Port Oil Terminal and Phillips 66’s
Bluebonnet Market Express pipeline and the Bluewater Texas Terminal, are delayed and facing
Permian Katy pipeline, have not advanced in more opposition on public health and environmental
than two years and are presumed to be shelved. grounds.

Financial institutions can no longer afford to pump-prime the Permian

The international breadth of the financial sector’s sup- Scenario of the International Energy Agency (IEA)
port for midstream infrastructure linked to the expan- which top investors, climate scientists and NGOs have
sion of the Permian Basin is apparent: more than 100 criticized for being too fossil fuel friendly–only covers
institutions have been involved in the relatively few upstream oil and gas. It does not cover ING’s appetite,
projects where Global Energy Monitor research was as captured in this research, for midstream financing.
able to identify financing. This points to the almost
total absence among financial institutions of policy A series of high profile announcements in the sec-
restrictions closing off support for oil and gas pipe- ond half of 2020 by Morgan Stanley, JPMorgan Chase,
lines and terminals. Two public finance institutions– Barclays and HSBC brought various “Paris alignment”
the French Development Agency and the European pledges for achieving net zero carbon pollution
Investment Bank– and Australia’s biggest insurer across the banks’ client portfolios by 2050. However,
Suncorp have recently made commitments to end these pledges do not include firm commitments
entirely their financial backing for oil and gas projects to end financial support for oil and gas expansion
and companies. Fifty globally significant financial projects and companies. As these announcements
institutions have introduced policies restricting their were appearing, the IEA’s World Energy Outlook 2020
support for tar sands and/or oil and gas drilling in the warned of the climate and financial realities which the
Arctic, including 23 which have done so in 2020 (IEEFA banking sector must now act on with more ambi-
2020). However, to date across the commercial bank- tion, noting, “[I]nvestors are looking with increased
ing sector, only four banks–BNP Paribas, Rabobank, scepticism at oil and gas projects due to concerns
UniCredit and US Bancorp–prohibit financing for about financial performance and the compatibility of
pipelines transporting shale oil and gas, and only BNP company strategies with environmental goals. Some
Paribas and UniCredit have additionally introduced of the financial concerns might ease if prices pick up
marginal measures to restrict their financing of LNG and projects start to offer better returns, but questions
projects and companies. about the industry’s contribution to reducing emis-
sions are not going to go away.”
In April 2020, creeping acknowledgement of the
social and environmental risks of oil and gas pipelines Closing the midstream policy gap at financial institu-
appeared for the first time in new policies unveiled tions is key to mitigating the effects of climate change
by Mizuho and Sumitomo Mitsui Banking Corpora- and the increasing risk that, in a decarbonizing world,
tion, two of the top funders of Permian midstream many of these midstream assets will soon be stranded.
infrastructure. But the Japanese megabanks’ weak Without the introduction of specific policies to restrict
formulations did not prevent them from participating and then end financing for pipelines, banks will
in combined US$692 million debt financing for the continue to back Permian players such as Enterprise
Whistler gas pipeline in June and combined US$466 Products whose CEO recently commented: “I struggle
million refinancing for the Gray Oak oil pipeline with the term . . . energy transition.” By contrast, as
in September. Another prominent Permian funder, Moody’s, the editorial board of the Houston Chronicle,
Dutch bank ING, has recently disclosed how it plans to and others are pointing out, the financial, climate and
align its financing for the oil and gas sector with a 2°C social license risks attached to oil and gas are rapidly
temperature rise instead of the Paris Agreement’s goal converging as investors and the public turn enthusi-
of a 1.5°C rise. ING’s model for doing so–its “Terra” astically towards the “lower risk-positive return,” zero
approach, based on the Sustainable Development emissions industries of the future.

APPENDIX: COUNTRY DETAIL

Potential Stranded Assets
As discussed in the report, the need to decarbonize major economies by mid-century, combined with g rowing
challenges to the social license of pipeline developers, has increased the risk or stranded assets if pipelines
currently under development are retired before the end of their normal lifespan. Table A1 estimates the size of
this risk, as measured by the estimated capital expenditures for projects in construction or preconstruction.
Table A1. Top 10 countries by estimated capital expenditures for projects in construction or pre-construction (US$ billions)
Country Gas Oil Total
China 149 24 173
USA 55 54 110
India 103 1 104
Russia 86 0 86
Australia 43 0 43
Brazil 40 0 40
Nigeria 32 1 33
Canada 14 17 32
Iran 16 14 30
Mozambique 21 0 21
Source: Global Fossil Infrastructure Tracker, December 2020, and analysis based on estimated and reported pipeline lengths at US$5.04 mil-
lion per km in 2020 dollars. The per-km figure is based on “Natural gas pipeline profits, construction both up,” Oil & Gas Journal, November
2018, adjusted for inflation.
Greenhouse Gas Emissions

Table A2 shows the ten leading countries based on estimated lifetime CO2 emissions from pipelines in construc-
tion or pre-construction, and the number of 1,000 MW coal-fired power plants that would emit the same level
of CO2. As discussed in the report (page 13), the overall lifetime CO2 emissions of pipelines in construction and
pre-construction worldwide is 15% less than the emissions of the operating global fleet of coal-fired power plants.
Table A2. Lifetime CO2 Emissions for Gas and Oil Pipelines in Construction and Pre-Construction (Million Tonnes),
Compared to the Number of 1,000 MW Coal Fired Power Plants that Produce the Same Amount of Emissions.
Country Gas Oil Total Number of 1,000 MW coal plants
USA 24,200 18,533 42,733 282
China 15,276 8,790 24,066 159
Russia 13,598 0 13,598 90
Canada 2,183 8,712 10,895 72
India 7,621 1,578 9,199 61
Iran 2,026 5,611 7,638 50
Iraq 0 7,579 7,579 50
Australia 4,976 0 4,976 33
Jordan 0 4,630 4,630 31
Poland 644 2,433 3,077 20
Note: Assumes average pipeline capacity utilization of 50%, 40-year lifespan. Based on 151.6 million tonnes lifetime CO2 emissions for a
1,000 MW coal-fired power plant.

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Pipeline Bubble

James Browning, Greig Aitken, Lydia Plante, and Ted Nace

GLOBAL ENERGY MONITOR REPORT | FEBRUARY 2021 | 2

Pipeline Bubble 2021

James Browning, Greig Aitken, Lydia Plante, and Ted Nace

■ Stranded asset risk of $1 trillion. A planned 212,000-km expansion

■ Lock-in of future emissions. Pipeline projects under construction

■ Gas dominates the mix. 18 of the 20 longest pipelines in develop-

■ China. China continues a massive 32,800-km expansion of the

GLOBAL ENERGY MONITOR REPORT | FEBRUARY 2021 | 3

consolidated under a new company, PipeChina, which will soon be

■ Slowing growth. The global pipeline expansion has slowed in the

■ Stopping the Keystone clones. The Biden Administration has

■ Few restrictions on midstream financing. An analysis of the

■ Pipelines losing their social license. Intense opposition from

GLOBAL ENERGY MONITOR REPORT | FEBRUARY 2021 | 4

GLOBAL ENERGY MONITOR REPORT | FEBRUARY 2021 | 5

PIPELINE BUILDING TRENDS DOWNWARD, FOLLOWING INDUSTRY DECLINE

Figure 1. Annual Oil and Gas Pipeline Completions, 2008–2020 (km)

Source: GEM, Global Fossil Infrastructure Tracker, December 2020

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GAS DOMINATES THE MIX

Source: Global Fossil Infrastructure Tracker, December 2020

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REGIONAL DISTRIBUTION AND CAPITAL EXPENDITURES

Table 1. Pipeline Development by Region (km)

Table 2: Estimated Capital Cost of Pipelines Under Development (Billion US$)

GLOBAL ENERGY MONITOR REPORT | FEBRUARY 2021 | 8

Table 3. Pipeline Expansion Plans by Country by Length, Top 20 Countries (km)

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OWNERSHIP: WHO IS BUILDING PIPELINES?

Table 5. Top 15 Developers of Oil Pipelines (km)

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Table 6. Top 20 Developers of Gas Pipelines (km)

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PIPELINES AND CLIMATE CHANGE

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Table 7. Oil and Gas Pipelines: Lifetime CO2 (Million Tonnes)

GLOBAL ENERGY MONITOR REPORT | FEBRUARY 2021 | 13

DIVESTMENT AND INSTITUTIONAL RESTRICTIONS

GLOBAL ENERGY MONITOR REPORT | FEBRUARY 2021 | 14

OPPOSITION AND SOCIAL LICENSE

British Columbia Alberta

GLOBAL ENERGY MONITOR REPORT | FEBRUARY 2021 | 15

BIDEN AND PIPELINES

GLOBAL ENERGY MONITOR REPORT | FEBRUARY 2021 | 16

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GLOBAL ENERGY MONITOR REPORT | FEBRUARY 2021 | 18

that falls under the jurisdiction of the Texas ­Railroad Coahuila

Commision for most of its length, while only a Port of Brownsville

Rio Grande required review under the United States’ Mexico

San Luis Potosí

Another key project is the Sur de Texas-Tuxpán Tuxpan

Mexico’s existing national network and will eventually Guerrero

LATIN AMERICA Ecuador Manaus Belem

Argentina has the second largest shale gas reserves in Recife

Southern gas pipeline (SIT)

southern Peru over the next 35 years. A tender for the

GLOBAL ENERGY MONITOR REPORT | FEBRUARY 2021 | 19

system makes no sense (Global Witness 2020). These Oslo

that falls under the jurisdiction of the Texas Railroad Coahuila