Geopolitics in the boiler: what is happening with gas in Europe?

When we think about geopolitics, we seldom stop to reflect on how it affects the ordinary lives of citizens. Without the need for major battles, open conflicts, uncontrollable migrations or the collapse of any state, geopolitics also becomes visible in our most bland everyday life. The continuous rise in the price of electricity in Western European homes is an example that is gaining force in the Spanish case.

European options against energy dependence

Europe is energy dependent on the outside. It does not have great gas resources and green energy – mainly solar and wind – is subject to the vagaries of meteorology and to a still incipient development.

The use of fossil fuels will be practically unviable in the medium term thanks to the commitment of the European authorities to the Kyoto Protocol and the objectives of the Paris Agreement.

The nuclear option has a political cost that causes almost no actor to bet on it. European societies do not understand its advantages and fear the consequences of its use. Only France has chosen to maintain its use, and even enhance it, showing that another energy model is possible.

Energy consumption recovers

Energy consumption has returned to pre-pandemic levels since the health situation began to stabilize at the end of 2020. In recent months, the price of electricity has skyrocketed in Europe and we have found the media full of maps that highlight the natural gas fields and the infrastructure for their distribution. Why?

The combustion of natural gas has been during the last decades an economical and less polluting form of electrical energy production than others. Its price was cheap and it was possible to transport it from its place of extraction to the place of consumption through amortizable infrastructure. Thus, the large gas pipelines and regasification plants began to spread throughout the European geography. Gas was so cheap that these huge infrastructures were profitable, but they made Europe dependent on external venues and actors.

The Russian Federation, Algeria, Iran or Azerbaijan became the main exporters of the gas consumed in Europe. Even the costly process of liquefying and regasifying gas for shipping was profitable. However, the situation has changed dramatically.

The impact of the pandemic, the premature closure of nuclear and thermal power plants, the increase in consumption after the production stop, the rise in the prices of maritime transport, a broken transport chain for months, the tensions between States and the use of the Raw materials as a form of geopolitical pressure in the face of the harsh European winter are some of the reasons for the high price of gas.

According to data from the European Gas Infrastructure Association (GIE), gas reserves for the winter of 2021 are the lowest in the last decade. The EU and UK average is 77% of their total capacity compared to 95% a year ago.

Spain: gas reserves and supply

Spain faces this situation with its tanks at 81% of their maximum capacity (as of 11/08/2021) and a strategic reserve that would ensure ordinary supply for 20 days (a little longer in case consumption was restricted).

In January 2021, during the Filomena storm, the country was already forced to use its strategic natural gas reserves. This situation was addressed with two open gas pipelines from Algeria. Recently, the tension between Algeria and Morocco has caused one of them, which was crossing Moroccan territory, to close.

The government of Algiers has committed to increasing supply through the second gas pipeline, which directly connects the African country with the Iberian Peninsula by sea. But the increase in pumping cannot completely replace the closure of the other infrastructure.

If finally it was necessary to opt for the use of ships methane tankers, Spain has a large number of regasification stations to carry out the complex and expensive process that allows the liquefied gas transported by sea to be poured into the distribution network. However, with supply chains broken or undergoing restructuring, this path is clearly insufficient as well as expensive.

Natural gas burning in the Algerian desert.
Shutterstock / Mohamed I Khalid

Russian gas for the European winter

Beyond the Pyrenees the situation has also been complicated by dependence on Russian natural gas. The Central European zone depends on the import of gas from Russia. Big Russian companies are not independent of power and play openly in favor of the Kremlin’s geopolitical interests.

On the other hand, Asia has also become a region with great energy demand. Europe must buy its supplies on international markets and the producing countries want to make the most of the rise in demand.

The rise in prices is related to this boom and a limited extraction and distribution capacity, but also to the lack of prospective analysis with which the closure of other sources of electricity supply was managed.

Europe is entrusting its energy future to renewable energies, its commitment to reducing CO₂ emissions is indisputable, but not all international players share this roadmap. We will see if the European commitment is sufficient or a vain and costly effort.

What remains to be done

There has been a lack of foresight to order the European energy transition process, public debate was limited and simplistic and simplifying arguments against nuclear energy and new renewable energies were not fought. The result, now, is that Europe is going to be subjected to great energy stresses for a time that we are not yet able to foresee.

Meanwhile, China has made public its commitment to stop financing the construction of new coal-based power plants in third countries, but maintains a good number of projects in the interior to meet its runaway demand for electricity.

Investment in R & D & i promises new solutions for the future: more efficient renewable energy, safer nuclear energy and it even seems that during the rest of the 21st century nuclear fusion plants will also become a reality.

None of these technological bets will come in time to lower our electricity bill but we hope they do so in time to straighten the relationship between human beings and the environment.

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