$283B in Natural Gas Projects Could Be Threatened in Low-Carbon Economy

While energy experts have promoted natural gas as a "bridge fuel" that can help the world shift from coal and oil to more carbon-neutral alternatives, even the "bridge" will need to be dismantled to achieve a low-carbon energy economy, experts with the Carbon Tracker Initiative (CTI) say in a new analysis.

When that happens, energy firms and investors with deep holdings in liquefied natural gas -- the world's only exportable form of gas -- could be forced to shed as much as $283 billion in capital expenditures by 2025 as surplus gas loses value and LNG producers see their markets soften.

In fact, according to Carbon Tracker, the London-based think tank that has built a reputation for its analyses of energy markets, the United States and Canada will see demand for capital expenditures on LNG projects shrink by $153 billion over the next decade under a low-demand scenario, while Australia will see $68 billion of potential capital expenditures evaporate.

By 2035 the value of unneeded LNG projects will rise to $379 billion, according to CTI, a figure roughly one-third higher than the 2014 gross domestic product of Qatar, the world's largest LNG producer, with 14 export facilities, known in the industry as "trains."

The report also finds that new infrastructure projects that rely on an LNG price of more than $10 per million British thermal units (MMBtu) may not be needed over the next decade.

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