The global energy landscape shifted again today. In New Delhi, US Secretary of State Marco Rubio and Indian Prime Minister Narendra Modi signed a landmark bilateral energy agreement, with a surprising carve-out for British infrastructure and logistics firms. The deal, announced at a joint press conference, is described by officials as a ‘strategic corridor’ for energy security, though its precise carbon implications remain unquantified.
At its core, the pact establishes a framework for increased liquefied natural gas (LNG) exports from the United States to India, a nation whose energy demand is projected to grow faster than any other major economy this decade. But the document’s annexes reveal a more intricate architecture: British companies, including BP and SSE, have been granted preferential access to build and manage the downstream supply chain, from regasification terminals to last-mile distribution networks. This is unusual. Typically, such deals are bilateral. The inclusion of a third party signals a deliberate effort to diversify geopolitical dependencies, a move that climate analysts are interpreting with cautious concern.
Dr. Aruna Rao, a energy policy researcher at the Delhi-based Centre for Science and Environment, described the deal as ‘a double-edged sword’. On one hand, natural gas burns cleaner than coal, and India currently relies on coal for over 70% of its electricity generation. Substituting gas could reduce particulate emissions and immediate health impacts. On the other hand, the infrastructure locked in today has a lifespan of 30 to 40 years. ‘We are building a bridge to nowhere if the transition to renewables accelerates,’ Rao said. ‘Every dollar poured into gas infrastructure is a dollar not spent on solar, wind, or storage.’
From a physical climate perspective, the arithmetic is stark. India’s per capita emissions are still a fraction of those in the US or Europe, but its total emissions are the third highest globally. The International Energy Agency calculates that to meet its 2070 net-zero target, India must peak its emissions within the next decade. The LNG from this pact, if used to supplant coal, could provide a temporary reduction in emissions intensity. But if it merely adds to the country’s total energy consumption, the net effect will be warming.
British firms stand to gain significantly. BP already operates India’s largest LNG terminal at Mundra. Today’s agreement expands its footprint to two new terminals on the eastern coast, near Chennai and Paradip. SSE has secured a contract to design and manage the grid integration for natural gas-powered peaker plants, which will backstop intermittent renewable sources. The UK government, in a statement, welcomed the deal as ‘a vote of confidence in British expertise’. It did not mention the environmental cost.
The timing is curious. Just last week, the UN Environment Programme released its Emissions Gap Report, warning that current pledges put the world on track for 2.5 to 2.9 degrees Celsius of warming. Every fraction of a degree matters. The Rubio-Modi pact does nothing to reduce global emissions; it merely shifts the source and location of combustion. It is a logistical triumph, but a climate setback.
There are technological solutions in the pipeline. Carbon capture and storage (CCS) could theoretically offset some emissions, but the technology remains unproven at scale. India has no commercial CCS projects. Green hydrogen, produced using renewable energy, could eventually replace natural gas in fertiliser and steel production, but it is not yet cost-competitive. The deal includes a small research component for hydrogen, but it is dwarfed by the LNG commitments.
Perhaps most telling was the absence of any binding methane reduction targets. Methane leaks from natural gas infrastructure can negate its climate benefits over short timescales. The International Energy Agency estimates that a leakage rate above 3% makes gas worse than coal for warming over 20 years. India’s current leakage rate is unknown, but regulators in the US have found that some LNG export facilities leak at rates above 5%.
In the press conference, Secretary Rubio framed the deal as ‘energy security, not climate charity’. Prime Minister Modi called it a ‘partnership for prosperity’. Both are correct, in their own frame. But the planet does not recognise national borders or corporate balance sheets. It only responds to cumulative emissions. The Rubio-Modi pact adds to that cumulative load, and no amount of supply chain efficiency can change that fundamental physics.
As the sun set over Delhi, the delegates shook hands. The agreements were signed. The infrastructure will be built. And the climate clock ticked on.
