Biden Administration Supports Papua New Guinea Gas Project

A letter from environmental groups to the United States Export-Import Bank (US EXIM) urges it to stop supporting the $13 billion project Category A Papua Liquefied Natural Gas Project. It would be the second-largest LNG project in the country.

“Given these enormous risks associated with the Papua LNG Project, we as civil society organizations across the United States and Pacific call on US EXIM to reject this project and take immediate action to implement the Clean Energy Transition Partnership (CEPT) by announcing a fossil fuel exclusion policy which most other high-income signatories of the CEPT have already done,” the letter stated. 

The Climate and Financial Effects of the LNG Project

PNG, the largest and most populated Pacific region country, is the 10th most vulnerable country in the world to climate change impacts. The LNG project would make the country more vulnerable. The proposed site for the project is in Gulf Province, where climate change has already impacted coastal areas. In Orokolo Bay, people have fled some communities due to rising sea levels and storms. The project will increase the country’s energy and industry emissions by over seven percent. Over the project’s lifespan, the emissions are estimated at 220 million tons of carbon equivalent (MTCO2e), the same amount as Bangladesh’s total emissions, a country with 170 inhabitants. 

PNG’s country’s highlands region experiences extreme weather, including heavy rainfall. Its coastal regions are vulnerable to extreme weather events, storm surges, sea-level rise, and coastal inundation. The majority of rural populations are subsistence farmers who are not able to protect themselves from natural disasters. 

PNG is also a country where 40 percent of the population lives below the poverty line. The project would do nothing to alleviate poverty. It presents financial risks, as it had not secured guaranteed sales as of May 22, 2023. There could be a global glut of LNG supplies after 2026 if new supply expands significantly. The LNG partners are still looking for external financing to fund the project. The export credit agencies that support PNG’s first LNG project might end finance support for fossil fuels. 

A Better Solution

Renewable energy is cheaper to produce in PNG than fossil fuels. PNG government agencies identified a slew of renewable energy projects that could supply 78 percent of the country’s on-grid energy by 2030. The government aims to expand electricity access from 13 percent to 70 percent by 2030. 

“The U.S. Export-Import Bank seems determined to repeat its past mistake by continually approving support for liquefied natural gas projects in Papua New Guinea, which are harmful for local communities and the climate,” said Kate DeAngelis, Senior International Finance Program Manager for Friends of the Earth U.S. 

Ending Fossil Fuel Investment

The Biden administration committed the U.S. at the U.N. Climate Summit in 2021 to “end new, direct public support for the international unabated fossil fuel energy sector within one year of signing this statement.” Approval of the LNG project contradicts that commitment and hinders stopping the worst climate change impacts. For the world to have a chance to limit global temperature rise to 1.5 degrees Celsius, carbon emissions from energy must reach net zero by 2050. There can be no new investment in fossil fuel projects to reach net zero. The world will shoot past 1.5 degrees if carbon emissions continue without reductions. 

Gina-Marie Cheeseman
Gina-Marie Cheeseman
Gina-Marie Cheeseman, freelance writer/journalist/copyeditor Twitter: @gmcheeseman

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