- More than 30,000 people attending the UN’s climate summit are hearing about the need for action.
- Yet much of the activity in Africa is from big energy and big banks developing fossil-fuel projects.
- During the COP27 event, three oil-and-gas deals in Africa have been announced.
SHARM EL-SHEIKH, Egypt – Each day, the more than 30,000 people attending the United Nations’ climate summit in Egypt hear about the need to curb greenhouse-gas emissions.
Yet across Africa, where people who did almost nothing to worsen the global climate crisis are especially vulnerable to its fallout, it’s a fossil-fuel bonanza.
In the past two weeks — essentially the time of the COP27 summit — three oil-and-gas deals were announced for Africa alone, in Egypt, Nigeria, and Tanzania.
For years, large oil-and-gas companies and the financial institutions that bankroll them have spent billions to develop new reserves and infrastructure across the continent, according to analyses by civil-society groups. A global energy crisis sparked by Russia’s war in Ukraine has created more appetite in Europe for African oil and gas.
That demand is evident even in announcements that purportedly support renewable energy. The US and Germany, for example, pledged at COP27 to spend more than $250 million financing Egypt’s transition to clean energy. But, the White House said, the move could “free up” gas, likely for export to Europe.
Huge demand for fossil-fuel production is galvanizing activists from Uganda and Tanzania to Mozambique and South Africa, which last week led one of the only protests inside the COP27 conference area to demand a renewable-energy transition instead.
“All projects coming to the continent are for exploitation. It’s very colonial,” Omar Elmawi, the executive director of the Kenya-based Muslims for Human Rights, told Insider. “Despite Africa’s renewable-energy potential, we’re not seeing investors or banks look at it as an opportunity. Africa is becoming a petrol station that feeds the interests of the ‘global north.'”
Elmawi and his fellow campaigners are up against officials from some African nations and the fossil-fuel industry, who argue the continent should be able to use gas as a transition fuel to expand electricity access to the 600 million Africans who lack it and to industrialize their economies just as Europe and the US did.
The interests of the fossil-fuel industry are well represented at the UN summit, where some 636 registrants are either directly affiliated with oil-and-gas giants or attending as part of delegations that act on behalf of the fossil-fuel industry, according to Global Witness, an environmental watchdog group. That figure is a 25% increase over last year’s meeting in Glasgow, Scotland.
Dozens of oil-and-gas companies — the majority of which are foreign — are searching for new reserves in 45 African countries, including areas in Egypt’s Red Sea region where the UN talks are underway.
In September, Egyptian President Abdel Fattah el-Sisi met with the CEO of the Italian oil giant Eni to discuss boosting Egypt’s natural gas production to export to Europe. Eni was also key to the 2015 discovery and ensuing development of the Zohr gas field off Egypt’s Mediterranean coast that is now producing the equivalent of 706 million barrels of oil each day.
Africa is the “cornerstone” of Eni’s business model, its website states. The company is the third-largest developer of new oil-and-gas production on the continent behind France’s TotalEnergies and Algeria’s state-owned company, Sonatrach, according to an analysis by Urgewald, an environmental and human-rights nonprofit, and 46 other civil-society groups, the majority of which are based in Africa.
TotalEnergies also has a stake in the controversial East African crude oil pipeline that would run from Uganda to Tanzania; the European Union has called for the plan to be halted. Some 42 financial institutions have also declined to back the project, including Citi and JPMorgan Chase.
Still, those two banks were among the top financiers of other new fossil-fuel development in Africa since January 2019, the Urgewald analysis estimated. Some 352 banks have provided $98 billion in loans and underwriting during that period.
The International Energy Agency last year said there should be no new oil-and-gas development. The world has already warmed about 1.2 degrees Celsius since preindustrial times and is on a 2.4 degree trajectory, according to the UN.
A spokesperson for JPMorgan said via email that over the next 10 years, the bank plans to spend $1 trillion on green initiatives, including renewable energy and clean transportation has already spent $100 billion. The bank is taking “pragmatic steps” to cut what it describes as the “emissions intensity” of its oil-and gas-portfolio while helping the world meet its energy needs “securely and affordably.” Emissions intensity refers to the greenhouse gases emitted for every unit of output.
A TotalEnergies spokesperson said in an email that the company plans to be a “major player” in renewable energy in Uganda and that the country is following a path it chose. “To stop Uganda from exploiting its natural resources in order to develop as a country on the grounds that we, as Europeans, have over-polluted or are over-polluting could be regarded as paternalistic, cynical, and selfish to the say least,” the spokesperson said.
A Citi spokesperson said in a statement that the company’s net-zero plan calls for a balanced approach. “Citi believes that an orderly, responsible, and equitable transition, which accounts for the immediate economic needs of communities, workers, environmental justice, and broader economic development concerns, is essential to the retention of political and social support to move to a low-carbon economy.”
Representatives from Eni didn’t respond to a request for comment.
Wael Aboulmagd, an Egyptian ambassador and the special representative to the COP27 president, said there is no “one-size-fits-all” approach for the energy transition.
“No one will challenge the need to move away from fossil fuels, but the expectations for a country that’s built wealth after decades of using fossil fuels should differ” from an impoverished island or African country, he said.
It will also differ between Egypt, where nearly all of the population has access to energy, and other countries, where fewer than 20% of people do.
Rich economies like those of the US and Europe Union are responsible for 80% of emissions since the dawn of the industrial age, although China more recently has risen to be the world’s top polluter. Meanwhile, the entire African continent has contributed just 3% of emissions.
Elmawi said fossil fuels aren’t the answer to energy poverty in Africa, especially if much of what is produced is destined for Europe. Plus, the projects are more expensive than building out renewable energy like solar.
He cited an IEA report that estimated all Africans could access affordable energy with about $25 billion in annual investment through 2030, with the majority flowing to renewables and some natural gas. That is the same amount needed to build just one liquefied natural gas terminal used to import and export the fuel.
“If we really want to improve the lives of people, we need to invest in community renewable energy,” Elmawi said.
This story was originally published on November 16, 2022.
