Lancashire pension savers are unwittingly bankrolling disastrous US gas expansion

Lancashire pension savers are unwittingly bankrolling the rapid expansion of gas terminals in the United States.

Sixty local government pension funds – including Lancashire County Pension Fund – have invested a total of £8bn into funds paying for the construction of gas ports all along the Gulf Coast, according to revelations by the Bureau of Investigative Journalism. Residents say these terminals are already causing health problems in their communities. Experts say they represent one of the biggest threats to the future of the planet.

More than seven million school staff, civil servants and other public sector workers either save with, or receive their pension from local government pension schemes. The revelations have sparked concerns among local councillors who oversee their pension funds and have urged them to get out of fossil fuels.

While the companies behind these projects are enjoying a boost from the war in Iran, they could tumble in value as the world switches to renewable forms of energy.

Baroness Hayman, a non-party political peer, told the Bureau: “Many UK pension funds are already reducing their exposure to fossil fuels, recognising the risks these investments pose. But with £3 trillion held in UK pensions, and the climate and nature challenge growing, there is a clear opportunity to better protect savers from rising financial and environmental risks.”

Members of the local government pension scheme were dismayed to find what they were bankrolling. “The UK could be funding a safer, healthier future for all via renewable energy generated in the UK that is cheap, safe, clean and owned by us,” said Jane Thewlis, a retired social worker.

The giant white orbs containing liquefied natural gas (LNG) look almost alien. Scores of these terminals are popping up along the 1,200-km stretch of Louisiana and Texas’ coastline, a building frenzy turbo-charged by Trump’s second term. If all the planned terminals are built, they would generate the same amount of greenhouse gases each year as every EU country combined, says Jeremy Symons, a former official at the US environmental regulator.

Savers in Lancashire County Pension Fund are invested in a huge infrastructure fund operated by JP Morgan Asset Management. While this has substantial investments in renewable energy, it has a stake in Enstor gas, which operates gas storage facilities in the US South; and a 50% holding in Third Coast, which spilled over 1 million gallons of oil into the Gulf of Mexico in 2023.

Roishetta Ozane, a resident turned activist, lives near a number of these gas terminals. She told us that pollution from the nearby gas, petrochemicals and oil infrastructure have caused asthma and an increase of cancer in the area – an account borne out by academic research.

She said: “We’re seeing more women develop health issues that are living near these facilities, having pre-term babies or having miscarriages. We’re seeing our air quality deteriorate. We have a drinking water crisis.” She said residents had to deal with noise pollution from construction and the flaring of excess gas from the terminals.

Two of her children have asthma. She told us the doctor said pollution may have exacerbated the seizures suffered by her son, who died last year. “When my son passed away, I was like, what are we doing this for?” she said. “We're fighting for our children, for our future, for our community, but yet they’re dying.”

In total, the Bureau of Investigative Journalism found eight US-based LNG terminals backed by UK pension money. Taken together, those terminals would give rise to more CO2 every year than the entire UK, several times over, according to Sierra Club data.

it comes to curbing carbon emissions, council pension funds and campaigners have tended to focus on selling their shares in companies like BP and Shell. But a growing portion of pension funds are invested in so-called “private markets”. Typically this involves putting money into a number of big funds, which in turn invest in everything from private equity to property to company loans.

Private markets can offer healthy returns. They’re also something of a black hole for information, which makes following the money much more difficult. And they’re often excluded from the scope of council climate commitments.

The upshot is that even pension schemes that have promised not to invest in fossil fuels have ploughed money into funds that are paying for major gas projects.

In February 2024, West Yorkshire Pension Fund said it would no longer lend to the oil, gas and coal sector. According to the new standards set by the authority, councillor Andrew Scopes said, the decision to invest in a Stonepeak fund that bankrolled an LNG plant on Ozane’s doorstep would be “very difficult to justify”.

Thewlis, a campaigner and member of the scheme, said: “We are particularly concerned if [West Yorkshire Pension Fund] is funding LNG infrastructure in the US, which is not compatible with a livable climate. We expect our elected representatives to use our money to fund a safe future – not to hasten the end of humanity.”

West Yorkshire Pension Fund said its environment, social, governance policy “takes account of the current status and role of gas and oil within the energy transition, particularly with regard to reliability, affordability and coal displacement”. It said LNG is seen as “a bridge between today’s fossil‑fuel‑dominated energy system and a future low or zero‑carbon one”.

JP Morgan declined to comment. Third Coast and the LNG port operators did not respond to requests for comment by Bureau of Investigative Journalism.

Lancashire County Council has been approached for comment by the LEP.