Friday

25th May 2018

Opinion

Massive EU gas investment a mistake

  • Gas totals one quarter of all energy used in Europe (Photo: eastpole)

Friday's (27 June) gathering of EU ministers is the second time this month to discuss, among other things, Europe’s supply of natural gas.

The crisis in Ukraine has been a wakeup call, exposing Brussels' weak position vis-a-vis Russia which delivers 25 per cent of gas consumed in the EU.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

Gas totals one quarter of all energy used in Europe, but with price levels on the rise and domestic production falling, it is becoming increasingly expensive to continue current levels of consumption, furthering Europe’s dependence on imported gas.

In response, Europe is investing billions of euros in gas-related infrastructure. Of the 248 so-called projects of common interest (PCIs) identified by the European Commission, 110 are related to the storage or transportation of gas.

Harbours across Europe are being transformed into hubs for overseas liquefied natural gas, and new pipelines are planned to bring gas supplies to the EU from authoritarian regimes such as Azerbaijan and Algeria.

A significant part of the estimated €200 billion to build the PCIs will come from public sources of finance via direct investments or in the form of guarantees.

But pouring such a massive sum into gas-related infrastructure is a huge misstep that will not address the challenge of Europe’s energy demands.

First, gas is expensive. Between 2001 and 2012, gas prices tripled and are expected to continue rising. At the same time, new sources of inexpensive gas are unlikely, with the consensus about an American-style shale gas boom in the EU having been all but abandoned.

It is equally unlikely that the US – a gas importer – will ever export significant amounts of gas to Europe, partly because the transport and liquification of gas are expensive, and shale gas extraction in the US has peaked.

On the other hand, prices for renewable energy sources show a downward trend, and operational costs are much lower.

Gas is also often offered as the transition fuel to help Europe meet its climate change commitments and become a ‘low carbon economy’. To be sure, gas delivers a constant flow of energy and is less polluting than both coal and oil, the most carbon intensive fossil fuels.

But were gas to aid an energy transition, then a credible plan to phase out the most polluting of fossil fuels would be needed, which is currently not the case. To stay within a global warming scenario whereby temperature increases are kept below two degrees Celsius, gas consumption must decrease by two thirds by 2050.

Locking Europe into gas use for decades

By its own account, the Commission’s own 2050 Energy Roadmap scenarios suggest that planned investments in gas infrastructure will create overcapacity and lock in Europe to gas use for decades, while hampering investments in, and the development of, renewable technologies.

The other thread of the narrative underpinning these EU summit discussions – that Europe must invest in its own gas infrastructure in order to increase the security of its energy supply – only tells part of the story.

These investments may make Europe less dependent on imported gas from Russia, but we will come to rely on gas from other countries – Azerbaijan, Algeria, Qatar and Nigeria – not the most stable of democracies, where human rights abuses abound.

The silver lining is that alternative energy scenarios exist.

Research shows that investing in renewables and energy efficiency, in combination with a 40 per cent reduction target by 2030, can generate savings in gas consumption by about 40 percent, exceeding all imports from Russia.

Such a strategy would have the added benefits of improving the odds of meeting our climate targets, as well as developing cutting edge-technologies and jobs. Another energy future is within reach – it is simply a matter of political will.

Xavier Sol is director at Counter Balance and Kuba Gogolewski an Energy expert at CEE Bankwatch Network

Time for EU energy union, says Polish PM

The European Union must create an energy union to secure its supply and reduce its dependence on Russian gas, Poland's Prime Minister Donald Tusk has said.

The dangers of resurgent nationalism in Greece

Virulent nationalism in Greece has been stirred up in the context of austerity and renewed negotiations with Macedonia. Recent attempts by the government to address the inequalities suffered by LGBT persons have also been met with a reactionary backlash.

More commitment to renewables from Council, please

More and more consumers are likely to invest in solar panels in the future as it becomes simpler to produce one's own electricity, writes Monique Goyens, director general of BEUC, the European Consumer Organisation.

News in Brief

  1. Italy set to pick eurosceptic finance minister
  2. UK foreign minister fooled by Russian pranksters
  3. Rajoy ally gets 33 years in jail for corruption
  4. Close race as polls open in Irish abortion referendum
  5. Gazprom accepts EU conditions on gas supplies
  6. Facebook tells MEPs: non-users are not profiled
  7. Commission proposes ending France deficit procedure
  8. UK households hit with Brexit income loss

Stakeholders' Highlights

  1. Counter BalanceEuropean Ombudsman requests more lending transparency from European Investment Bank
  2. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  3. Centre Maurits Coppieters“Peace and reconciliation is a process that takes decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  4. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  5. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece
  6. Counter BalanceControversial EIB-Backed Project Under Fire at European Parliament
  7. Nordic Council of MinistersIncome Inequality Increasing in Nordic Countries
  8. European Jewish CongressEU Leaders to Cease Contact with Mahmoud Abbas Until He Apologizes for Antisemitic Comments
  9. International Partnership for Human RightsAnnual Report celebrates organization’s tenth anniversary
  10. Nordic Council of MinistersNordic Cooperation Needed on Green Exports and Funding
  11. Mission of China to the EUPremier Li Confirms China Will Continue to Open Up
  12. European Jewish CongressCalls on Brussels University to Revoke Decision to Honour Ken Loach

Stakeholders' Highlights

  1. Sustainable Energy Week 2018"Lead the Clean Energy Transition"- Register and Join Us in Brussels from 5 to 7 May
  2. EU Green Week 2018Green Cities for a Greener Future. Join the Debate in Brussels from 22 to 24 May
  3. Nordic Council of Ministers12 Recommendations for Nordic Leadership on Climate and Environment
  4. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  5. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  6. Mission of China to the EUProgress on China-EU Cooperation
  7. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  8. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  9. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  10. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  11. UNICEFCalls for the Protection of Children in the Gaza Strip
  12. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations