In late March, about a month after Russia began its invasion of Ukraine, a journalist asked the energy minister to reflect the new reality in energy markets. Prince Abdulaziz bin Salman suggested that the climate conversation had shifted, noting the urgency of what was happening around energy security. The point was clear: as Europe moves to end its dependence on Russian oil and gas, the most intricate parts of the sanctions regime involve rerouting hydrocarbons through third countries. Renewable energy barely counted in the immediate calculus, even though science demands a halving of emissions by 2030.
The war ushered in an extraordinary moment for fossil fuel producers just as the long ecological transition was beginning to loom large. Industry gains kept breaking records. In the first quarter alone, the 28 largest oil companies posted numbers that many would call a global windfall, surpassing the century mark in value. ConocoPhillips reported a dramatic rise, with gains far exceeding the previous year. Shell, BP, and others followed, while Aramco reclaimed the title of the world’s most valuable company.
The oil sector did not stand alone at this table. In a bid to replace Russian gas, investment surged in gas infrastructure—from pipelines to terminals for liquefied natural gas, with methane transported by ship becoming a central piece of the energy puzzle. A recent Climate Action Tracker report explains that nations faced a choice during the energy crunch: cut fossil fuel use through efficiency and renewables, or replace Russian gas with imports from elsewhere.
gas gold rush
Governments responded with a rush to build new gas infrastructure, spanning Europe, North America, Asia, and Africa. Countries like Germany, Greece, Estonia, the Netherlands, and Italy announced LNG terminal projects. The United States pledged to triple its export capacity to Europe over the next decade, while Rome pursued deals with suppliers in North Africa and beyond. Older projects, such as the Trans-Saharan gas pipeline, were revisited, and Canada, Norway, the United States, and Japan weighed in on various plans still in motion.
These developments are not merely about immediate supply. European imports of LNG reached 115 billion cubic meters in 2020, and if all announced projects come to fruition, imports could double, feeding a landscape of surplus capacity in some forecasts. The broader consequence is clear: rising energy costs shape policy choices and market dynamics across continents. The Intergovernmental Panel on Climate Change reiterated last April that greenhouse gas emissions must be cut by half by the end of the decade to avoid the most severe climate impacts. The call was stark: if action isn’t taken now, the world could miss the 1.5-degree target. New exploration for gas and oil, some warned, should not be a default response.
Projects with decades of life
Even so, the urgency of short-term energy needs shifted the horizon. Many LNG projects that had languished in Europe for years were funded or revived, despite earlier green transition concerns. Analysts note a troubling irony: many of these projects are not simply replacements for Russian gas but are designed for much longer lifespans. They could extend over decades, potentially locking in decades of investment before investors see a return. The shift provoked debate about whether such long-term projects align with climate goals and whether they would crowd out investments in renewables.
Experts warn that the crisis risked wasting opportunities in renewables. The window is narrow: there are roughly eight years to halve global emissions. Building new fossil fuel infrastructure at this pace may prove a strategic misstep, potentially narrowing the path to a sustainable energy mix. The emphasis, according to researchers, should be on accelerating energy efficiency and renewable capacity to reduce emissions without forfeiting reliability.