With global energy markets upended, the G7 group of the world’s most industrialized nations is considering endorsing new upstream investment in natural gas despite climate concerns, a draft document seen by Reuters showed on Thursday.
The energy and climate change ministers of the G7 members—Canada, France, Germany, Italy, Japan, the UK, and the U.S.—are holding a summit in Japan next week, at which they are expected to discuss ways to reduce emissions in the face of more pressing energy security issues.
According to the draft document, the ministers will say that new upstream investment in natural gas supply will be needed to address energy security after the Russian invasion of Ukraine.
“In this context, in this particular contingency, we recognize the need for necessary upstream investments in LNG (liquefied natural gas) and natural gas in line with our climate objectives and commitments,” reads the draft statement seen by Reuters.
The draft is not the final draft of the communique to be adopted and could still change until the summit, which Japan will host on April 15 and 16.
Major European economies, including the biggest, Germany, have seen first-hand the need for natural gas supply that’s not coming via pipelines from Russia. The U.S. has been sending record volumes of LNG to Europe over the past year as prices surged following the Russian invasion of Ukraine and as the U.S. pledged to help its European allies with gas deliveries.
Despite protests from environmentalists, many governments and policymakers have recognized the need to ensure a reliable and stable gas supply.
The World Bank could now be open to funding some gas projects, although it had pledged that it would stop funding upstream oil and gas projects after 2019.
The World Bank could be open to funding gas projects in Mozambique to ensure greater energy access if the costs are the cheapest among energy sources, Victoria Kwakwa, World Bank Vice President for Eastern and Southern Africa, told Bloomberg in an interview last month.
Back in 2017, the World Bank Group said it would no longer finance upstream oil and gas after 2019. But the group noted that “In exceptional circumstances, consideration will be given to financing upstream gas in the poorest countries where there is a clear benefit in terms of energy access for the poor and the project fits within the countries’ Paris Agreement commitments.”
