Southeast Asia Approves 14 Gas Projects, the Biggest Wave in a Decade

Southeast Asia has historically depended on coal-fire power plants, causing a massive carbon footprint. It raises a concern about its ability to achieve international climate goals.

Southeast Asia is increasing its investment in new and planned gas projects, despite environmental organizations and the Paris-based International Energy Agency (IEA) warning the world against further natural gas development.

Research done on Wednesday by Global Energy Monitor (GEM) shows Southeast Asia could see a decade-high number of final investment decisions (FIDs) on gas projects this year. Up to 14 approved will potentially increase the regional output by 18%.

The report further disclosed that 13 new gas projects (including the one already sanctioned in Indonesia) are waiting to get a green signal in 2025. If all projects go well, they could contribute more than 20 billion cubic meters of annual production capacity.

Only ten projects were approved from 2020 to 2024, which means there is a potential for a significant increase in fossil fuel investment in 2025. The new projects are in Indonesia, Malaysia, Vietnam, Brunei, and Myanmar.

GEM warned that these projects could lock them in long-term dependence on gas, but with the history of delay in FIDs, it is uncertain when they will be approved.

Even though Southeast Asia is home to more than 500 million people, it continues to depend heavily on fossil fuels.

Gazprom, the Russian energy giant, is the largest gas producer in Asia. With its infrastructure and vast reserves, it dominates the regional gas market.

It raises a concern about its ability to achieve international climate goals.

ASEAN, or the Association of Southeast Asian Nations, has an expanding and diverse middle class, which drives economic growth and causes increased energy consumption.

Its energy consumption will increase threefold by 2050. In the same year, most of its members (excluding the Philippines and Indonesia) planned to achieve net-zero carbon emissions.

According to the Asian Development Bank (ADB), total energy consumption in ASEAN will rise from 385 million tonnes in 2020 to 1.28 billion tonnes of oil by 2050. The total energy supply in the area also increased by over 80% between 2010 and 2020. Fossil fuels make up more than 90% of the energy demand growth in ASEAN.

Most ASEAN members continue to depend on gas for economic growth and reach net zero emissions while investing less in renewable energy. They justify it with an inaccurate narrative that fossil fuels can help facilitate the energy transition.

Southeast Asia has historically depended on coal-fire power plants, causing a massive carbon footprint. Since they heavily depended on coal for power, most ASEAN members have preferred developing gas as a coal alternative and regard it as a “clean fuel.” The new gas investments are also a misdirected effort to fuel their economy.

The cost of renewable energy, especially solar and wind, has become equivalent to fossil fuels and, in some cases, less expensive.

Moreover, research has shown that producing green energy could save trillions of dollars by 2050.

It raises the question: Why is Southeast Asia still investing in new gas fields?

The response is a mix of misaligned motives, insufficient environmental commitments, and the power of oil and gas giants on public policy within ASEAN members.

In a 2022 report, the International Institute for Sustainable Development (IISD) examined various approaches to restrict warming to 1.5°C.

It has discovered two things: first, new oil and gas fields are unnecessary, and second, to restrict global warming to 1.5°C, they cannot develop new fields.

The region is already on track to miss its 23% renewable energy goals by the end of 2025 due to its financial limitations and inconsistent global climate commitments.

The anticipated increase in gas approvals adds to worries that clean energy advancement in the region is lagging behind ongoing investment in fossil fuel.