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30/07/2016

Lost in the gas bubble

Climate & Environment

Lost in the gas bubble

European gas infrastructure is already underutilised.

[James Crisp/Flickr]

The Commission’s new gas strategy is an affront to the Paris agreement, at a time when we should be leading the global energy transition and leaving fossil fuels behind us, writes Claude Turmes.

Claude Turmes is a Luxemburgish Green member of the European Parliament.

On 12 December 2015, Commissioner Cañete endorses the Paris agreement on behalf of the European Union, committing our continent to fully decarbonise its economy by 2050.

What is left from Paris in the Commission’s plans on 16 February 2016? Not much, apparently… The first initiative taken by the Commission after the COP 21 is a fossil fuel package, promoting gas in Europe, as if Paris had literally never happened.

Based on misleading gas demand scenarios, largely ignoring the context of low oil and gas prices, as well as contradicting our climate goals, the Commission’s so-called security of gas supply package is nothing less than a provocation. I have the bitter feeling that, at a time when all our efforts should be pushing towards a 1.5°C future, the Commission is frozen at -162°C, the temperature of the liquefied natural gas they vainly expect to flood Europe with.

The Commission has a history of severely overestimating gas demand. In a recent report, the Court of Auditors itself called on the Commission “to restore the credibility of the forecasts it uses”. Not later than yesterday (15 February), Commission Vice-President Šefčovič noticed “a question from our NGOs and green partners: why such focus on gas?” His answer, ironically delivered at an event called “Big Ideas,” organised by the International Energy Agency, was the following: “We estimate our gas needs for 2030 at 380 to 450 billion cubic metres per year, roughly the same volume as today.” This represents a slap in the face for the Court of Auditors, for the COP 21 agreement, for civil society and for the climate.

Europe does not need more gas; it needs efficiency and renewable energy sources. Mr Vice-President, how can you seriously develop a credible gas strategy when your forecasts have been consistently wrong for a decade? Existing gas infrastructure is significantly under-used today and most additional gas infrastructure is a total waste of money. Over-estimating gas demand is simply feeding the plans of pipeline and LNG promoters, an infrastructure likely to become so stranded that taxpayers will ultimately be called on to foot the bill.

Chiefly, the Nord Stream consortium is the big winner of these miscalculations, enabling Gazprom to tighten its grip on central and south-eastern European economies. Is this “gas package” a deliberate attempt to roll-out the red carpet to Gazprom and Nord Stream? Or simply a naive roadmap dictated by European gas majors?

I believe a decent gas strategy should be demand-based and not supply-based, implying a focus on energy efficiency and savings. The gas crisis is largely a heating crisis. Enormous quantities of gas are burnt in poorly insulated buildings and in obsolete district heating networks. The Commission should make plans on how to put an end to such waste, gear up for a deep renovation of the existing building stock and accompany member states in the deployment of near-zero energy new buildings.

I am stunned that the Commission dares to put forward a heating and cooling strategy without even mentioning the low oil price! While our electricity system is largely unexposed to the competition stemming from low oil prices (oil and gas being barely used for power generation), the heating sector is much more vulnerable. Low oil and gas prices constitute a threat to our decarbonisation policy, as shown by the difficulties encountered on the pellet market, a sector imperilled by cheap oil. In addition to immediately banning coal (as the city of Krakow recently did), we should address the situation by fostering tax shift as a disincentive to oil consumption in the heating sector.

I call on the Commission and member states to open the debate on the higher taxation of fossil resources. This new revenue could then be used to finance social measures, to combat fuel poverty and bring down labour costs. It should also support investment underpinning the energy transition: establishing a strong “smart financing for smart buildings” initiative, incentivising a massive fuel switch from gas to domestic and sustainable biomass or biogas, geothermal energy and solar thermal energy, developing cogeneration and reaping the full potential of district heating networks. These networks are strategic assets and can be renovated in order to deliver heat based on renewable energy sources in urban areas, building on the good example of some Nordic and Baltic cities. We need to have the vision of 100% renewable energy sources in the heating system, also involving heat pumps when combined with on-site renewable electricity generation, notably via photovoltaic panels.

Finally, I would like to highlight an as yet imperceptible revolution: the European Union is changing the world’s geopolitics. In addition to other drivers, a low oil price is also the direct consequence of a decade of energy efficiency policies in Europe and the United States. CO2 and transport legislation and standards pay off! We consume less oil, hence the price falls. Persistent low oil prices, a scenario the IEA considers likely, sanctions the change from a world order marked by resource leadership to a new order, where technology and innovation leadership is key. In this new setting, the EU can play its role if it turns its back on fossil fuels once and for all and willingly enters the era of decarbonisation.