Paris, 23 May 2023 – Reclaim Finance and Better Brazoria (1) have obtained a copy of one of the insurance policies covering Freeport LNG, the second largest liquefied natural gas (LNG) terminal in the United States, located in the Gulf of Mexico. Despite their climate commitments, SCOR, AXA, Allianz and Lloyd’s of London have provided US$400 million of insurance cover between January 2022 and January 2023. As the company plans to expand this project, increasing its annual emissions to a level equivalent to a third of France’s CO2 emissions (2), Reclaim Finance is calling on the insurers involved, including SCOR which will hold its general meeting this Thursday, to commit not to cover the expansion of Freeport or any other new LNG terminal project.
Freeport LNG is now a key export terminal to exploit US shale gas (3), having originally been built as an import terminal, which is now seeking to develop a 4th LNG production train (a liquefaction unit). Shale gas is exploited through fracking, which has been banned in some European countries, including in France, due to its damaging environmental impacts (4).
I live in Texas, just a few miles from Freeport LNG, where liquefied natural gas threatens my community. The methane that the terminal processes is highly explosive. Less than a year ago, there was an explosion at Freeport LNG that shook our homes and felt like a thunderclap. Every day we live in fear of air pollution and the impact of these facilities on our health. I call on SCOR and other insurers to drop this project and its expansion. It is not worth the risk.
Melanie Oldham, founder of Better Brazoria Clean Air & Water in Freeport, Texas
The Freeport LNG terminal currently emits around 75 MtCO2/year, which is the equivalent of 25% of France’s CO2 emissions. These are expected to rise to as much as 100 MtCO2/year if the new train is brought into production. Despite their climate commitments and the level of emissions produced, SCOR, AXA (through its subsidiary AXA XL), Allianz and numerous Lloyd’s of London syndicates have provided Marine General Liability cover(6) to Freeport LNG between January 2022 and January 2023 offering US$400 million of insurance capacity.
The International Energy Agency (IEA) stated in its World Energy Outlook 2022 that not even the war in Ukraine could “justify a new wave of oil or gas infrastructure in a world that wants to be carbon neutral by 2050” (7). The IEA states that there is no need for additional LNG capacity over and above those facilities alread existing, or currently being built to meet European demand in the absence of Russian gas, as projected in its Net-Zero Emissions by 2050 (NZE) scenario. The development of new LNG infrastructure, contrary to the recommendations of experts and scientists to limit warming to 1.5°C, continues to worsen the environmental, climatic and human impact of shale gas and LNG.
Let’s be clear: the expansion of liquefied natural gas, in the US or elsewhere, is not contributing to the transition in any way. The IEA is clear that no new LNG terminals or expansion of existing terminals approved after 2022 are needed in its 2050 net zero scenario. It would therefore make sense for SCOR and AXA, in line with their net zero commitments, to refuse to cover the Freeport LNG expansion, which is expected to receive its final investment decision in 2024.
Ariel Le Bourdonnec, Insurance Campaigner at Reclaim Finance
Neither AXA nor SCOR has a policy limiting their support for new LNG projects such as the Freeport LNG expansion (8). While AXA has pledged to stop covering companies heavily involved in shale oil and gas (9), the insurer continues to insure LNG terminals dependent on US shale gas such as Freeport LNG. SCOR has no policy preventing its support of new LNG terminals (10), including those, like Freeport LNG, that directly contribute to the opening of new shale gas fields.
Reclaim Finance will be at SCOR’s AGM on Thursday 25 May to call on SCOR to align itself with scientific recommendations that new oil and gas fields and LNG terminals (11) should not be developed and insured.
