A massive buildout with massive impacts
The massive buildout of LNG facilities worldwide is not only exacerbating the climate crisis through its greenhouse gas emissions, it is also an industry with massive impacts on communities, the environment and biodiversity. As with any large fossil fuel development, the construction of LNG terminals often leads to forced displacements of communities as is the case in Cabo Delgado, Mozambique where the Mozambique LNG project was allocated the land rights to about 7,000 hectares of land, requiring 586 families to resettle. Often the processes around impact assessment, resettlement and compensation are highly flawed. There are serious concerns around the Papua LNG project in Papua New Guinea because of a lack of information provided to the potentially affected communities and the fact that police travelled with consultants in charge of assessing human rights impacts, risking a coercive environment where people cannot speak freely. This in turn raises serious doubts about the exercise of the right of Free, Prior and Informed Consent (FPIC) of the Indigenous communities. The absence of FPIC is very evident in the case of the LNG projects in the Rio Grande Valley in Texas, US, where the developers have not secured FPIC from the Carrizo/Comecrudo Tribe. The projects also pass through sacred sites further violating Indigenous Peoples’ rights.
The resettlement of communities often leads to a loss of livelihoods or jobs. The communities that had to be relocated for the Mozambique LNG project for instance lost their agricultural land and access to their fishing grounds. Many are still waiting for compensation or have received inadequate compensation. Around the Verde Island Passage (VIP), a marine corridor in the Philippines called the “Amazon of the Oceans, and the Gulf South of the US, LNG terminals and the associated increase in shipping intensity are polluting the water and air. This not only threatens local livelihoods such as fishing, shrimping and tourism but also leads to biodiversity destruction, threatening endangered animal species.
The pollution also causes serious health impacts in communities. The LNG and petrochemical facilities in the Gulf South emit hazardous pollutants. Health impacts from these pollutants include increased rates of cancer, and heart, lung and kidney diseases. The health impacts disproportionately impact low-income, immigrant and Indigenous communities, and communities of colour who make up the majority of the population in the area.
Several projects are linked to severe human rights abuses. A recent investigation reported that Mozambican troops assaulted hundreds of civilians who were seeking safety, and imprisoned the men in windowless, metal shipping containers near the entrance of the Mozambique LNG site. Only 26 people seem to have survived. The troops committing these atrocities were tasked to protect the Mozambique LNG project site after a major insurgent attack on Palma town that spurred increased militarisation of the region and resulted in TotalEnergies, the project sponsor, declaring force majeure on the project. TotalEnergies was also providing the troops with equipment and financial compensation.
Lastly, most of these projects are perpetuating a legacy of fossil fuel colonialism and energy sacrifice zones in Black, brown and Indigenous communities who often are already disproportionately affected by the climate crisis and resulting extreme weather events like hurricanes and cyclones.
The role of Banks
A lot of the LNG projects would not be possible without financial support from banks. A recent report from Reclaim Finance reveals that between 2021 and 2023, 400 international banks have provided USD 213 billion (that’s 213.000.000.000!!) to the expansion of LNG. What’s even worse is that bank support for LNG expansion was even increasing within that timeframe with an overall increase of 25% in bank financing to LNG expansion. This support does not seem to dry up, as several deals between international banks and the biggest LNG developers have been recorded in 2024.
The worst culprits are banks from the US and Japan, with Mitsubishi UFJ claiming the top stop, while US banks such as JPMorgan Chase and Bank of America and Japanese banks such as Mizuho and SMBC are in the top 10 of the biggest supporters to LNG expansion for the 2021-2023 period. Chinese and Canadian banks are next in line. European banks are responsible for more than a quarter of LNG expansion support and some of them are in the top 30 banks having supported the most LNG expansion between 2021 and 2023. These include Santander from Spain, ING from the Netherlands, French banks Crédit Agricole and BPCE, Deutsche Bank, UK HSBC and Intesa Sanpaolo from Italy.
What makes this even more worrying is that none of the top ten banks financing LNG expansion have adopted a policy to restrict financing for LNG developers despite the fact that most of them have pledged to align with a 1.5°C pathway and to reach net zero by 2050, and only seven out of the top 30 banks actually have some restrictions on LNG financing. However, even these seven policies are highly inadequate because they only cover the direct financing of LNG export terminals, not of import terminals, and none of the policies exclude financing for LNG companies.
Support the fight!
All around the world, frontline communities and groups are rising up against LNG and its financiers. Some examples of campaigns fighting LNG projects and financing that you can support are:
