Taiwan plans to spend huge sums of money to purchase natural gas from the United States, sparking controversy; public opinion accuses it of ignoring commercial feasibility

China News Service, Taipei, October 20. The Democratic Progressive Party authorities’ plan to purchase natural gas produced by the LNG pipeline project in Alaska, USA, has continued to cause controversy on the island in recent days. Public opinion pointed out that this move ignored commercial feasibility and made a "political concession" between economic interests and energy security.

According to Taiwanese media reports, the Democratic Progressive Party authorities plan to purchase 30% of the natural gas produced by the LNG pipeline project in Alaska, USA, in the next 20 years. The procurement entity is the public enterprise China National Petroleum Corporation of Taiwan, involving an amount of approximately US$70 billion to US$80 billion, and an additional US$4.4 billion will be invested to ensure the completion of the project.

Faced with this energy agreement that spans 20 years, Taiwanese public opinion first focuses on its commercial rationality. Taiwan's "Wind Media" commented that the pipeline project has a long time span, complex climate conditions, and high construction costs. When oil giants such as Exxon Mobil and ConocoPhillips withdraw due to "low economic feasibility," Taiwan may suffer huge financial pressure if it blindly accepts this "high-risk deal."

As for the procurement entity of this project, as of the end of September this year, Taiwan PetroChina had accumulated losses of NT$91 billion, more than half of its capital, and its financial situation continued to be under pressure. Taiwan's administrative authorities have recently allocated NT$233.8 billion in additional capital to the company, which has been questioned as being for investment in Alaska projects.

An editorial in Taiwan's "Economic Daily" on the 19th pointed out that from TSMC's expansion of investment in the United States to the purchase of Alaskan natural gas, corporate investments must return to professionalism and prudence, and economic benefits should not be sacrificed for political needs.

In addition to financial risks, excessive concentration of energy supply also causes concerns among professionals. Zheng Ruihe, a senior analyst at Taiwan's China Economic Research Institute, pointed out that if the gas supply from the Alaska project is included, about a quarter of Taiwan's natural gas will come from the United States in the future. Excessive concentration of import sources is not conducive to Taiwan's energy security.

From an environmental protection perspective, there is also a contradiction between expanding fossil fuel procurement and the 2050 net-zero emissions target proposed by the Democratic Progressive Party authorities. A recent article in the United Daily News titled "Who will settle the cost of political procurement for Taiwan?" pointed out that if energy policy does not consider the upper limit of future industrial competitiveness, carbon costs and environmental resources, Taiwan may ultimately pay a more expensive and long-term price. The people of Taiwan need to see clearly how much security they have purchased through this political purchase and how much of their future they have advanced.