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14 Nov 2022

Fiona Harvey, The Guardian

COP27: Analysis finds increasing demand for oil and fuel threatens African nations’ economies


"Increasing demand for oil and fuel threatens African nations’ economies, analysis finds", 14 November 2022

Expanding oil and gas exports would threaten the economic stability of many African countries, new analysis has found, despite soaring fossil fuel prices. Demand for fossil fuels is likely to fall sharply in the medium term, according to a report published on Monday by the Carbon Tracker thinktank. That makes relying on gas exports to fuel economic growth a short-term, risky strategy, while boosting solar power would prove a better long-term bet, the analysis found.

Although gas prices are high now, and the top five oil and gas companies alone have made profits of more than $170bn so far this year, gas revenues would fall by half by 2040, and the gas market would see record low prices owing to shrinking demand, the report forecast.

That would leave Africa with huge investments in gas infrastructure, but no export market, if countries pursued a “dash for gas” now, the analysis found.

Kofi Mbuk, senior clean tech analyst at Carbon Tracker and lead author of the report, warned that companies investing in fossil fuels in Africa would be left with stranded assets. “The energy transition from fossil fuels to renewables is inevitable and irreversible,” he said. “The growth in energy demand globally and regionally is now being met by renewables and squeezing out fossil fuel demands. In Africa, and across emerging economies, solar and wind offer the best route for economic development.”

The future of Africa’s vast gas reserves is a major topic at the Cop27 UN climate summit in Egypt, now in its second week. Although not formally on the agenda for the UN talks, the conference is buzzing with talk of Africa’s potential as a gas exporter. Countries including Nigeria, Senegal, Mozambique, Congo-Brazzaville, Equatorial Guinea and Algeria have sizeable gas reserves, as does the Cop27 host country, Egypt...

However, many African climate experts and activists are speaking out against the expansion of gas on the continent. They argue that African’s poor are unlikely to see any benefit from the gas, which is likely to be exported abroad to the highest bidder by multinationals, with profits siphoned off to the countries’ elites.

“The “dash for gas” in Africa is dangerous and shortsighted,” wrote a coalition of dozens of African climate groups in an open letter as part of a campaign called “Don’t Gas Africa”...