EU Security of Supply – The energy Europe needs is around us. Let’s use it.

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

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In addition to energy savings, import diversification and renewables, Europe should also look inwards to secure its energy supply. Our continent still holds vast reserves of gas which can help substitute Russian imports and help contain our import bill in the process. Strangely enough, policy makers in Brussels are aware of this, but too shy to promote the idea outside informal talks at “dîners en ville”.

In the days and weeks that followed Russia’s invasion of Ukraine, the European Commission and EU leaders were quick to react by tabling measures to secure the EU’s short term energy supply and decide to substitute all Russian gas imports (155 bcm) by the end of the decade, of which 2/3rd by end 2022.

While the key measures laid down in the March REPowerEU communication (import diversification, biomethane production, energy savings, and faster electrification) will undoubtedly contribute to cut reliance on Russian gas imports, boosting the Europe’s own gas production was nowhere to be found, to the point where one begins to wonder if it has become a taboo in EU discussions.

Together, the EU and Norway hold 3470 bcm of known gas reserves[i], equivalent to 22 years of Russian gas supplies.

If the EU is ready to do what it takes to install 10 million heat pumps in the next five years, find an extra 50 bcm of non-Russian gas imports and produce 35 bcm of biomethane by 2030, why couldn’t it make as well the most of its known gas reserves and try to find additional ones? Is more of the same really the solution the EU needs?

The REPowerEU Plan to be released in the coming days and subsequent action from our EU institutions provides an opportunity to give this critical component of our collective energy security the importance it deserves, while strengthening the EU’s resilience and strategic autonomy within the framework of climate neutrality.

The return of the ‘reality check’

In 2019, pre-pandemic, the EU produced around 100 billion cubic meters (bcm) of natural gas, equivalent to about 20% of its own demand. This figure dropped to around 50 bcm in 2021[ii], sending our reliance on Russian gas imports over 40%.

Home to one of the world’s oldest and most mature hydrocarbon basins, the North Sea, Europe has seen its production decline steadily over the years, due to natural depletion (or to local consideration as for the Groningen field in the Netherlands).

As Europe’s historic fields slowly emptied, EU leaders kept reaffirming the transitional role of gas in their rhetoric but didn’t make much effort to sustain exploration on the continent, lowering chances of finding new resources while natural gas consumption remained relatively stable.

Coupled with activist organizations’ calls to halt fossil fuel extraction – without distinction between gas and coal – and a proliferation of bans and moratoria on oil & gas exploration celebrated at the political level, the way forward was clear: no particular attempt would be made to mitigate the growth of our import dependency.

While diversifying our sources of supply is necessary, Europe shouldn’t trade one dependency for another – this also applies to raw materials necessary for renewables. We must keep a healthy balance between imports and domestic production in order to enjoy the highest level of autonomy possible.

Aren’t our households and industry largely reliant on gas for heating and production processes? Don’t we use gas to produce fertilizers which guarantee our food security? Don’t our gas plants keep the lights on when there is no wind, or when nuclear plants go on maintenance? Isn’t it therefore the EU’s role to encourage, as much as possible, the persistence of domestic gas production as long as still needed, in line with our climate neutrality objectives?

This is why the European Commission needs to call on Member States to lift existing bans on exploration, list the remaining regulatory and physical barriers which prevent existing fields from boosting output, fast-tracking permitting processes, or even replicate at EU level and to the extent possible the UK’s Maximizing Economic Recovery (MER) Strategy.

All of this can be accompanied by a long-term plan to gradually transition European oil and gas producing assets so they can deliver the skills, technology and infrastructure needed to meet the EU’s climate neutrality objective.

We have ‘freedom gas’ too

Earlier this year in February, Europe’s reality changed. Now it is time to lay down the groundwork for our future resilience.

Member States and European gas producers were quick to take all sorts of initiatives to boost production in the short term. Combined with intensive gas diplomacy by the European Commission, extra domestic production and gas imports together are helping fill the EU’s storage levels ahead of next Winter.

However, in the longer term, the EU will have to compete for gas volumes on the global market.  And while global liquefaction capacity is rising, we do not yet have visibility on future gas flows in this new geopolitical reality.

Investing in parallel in our domestic production as of today will help mitigate volatility tomorrow, while delivering significant revenues which can help support vulnerable consumers.

The EU and Norway’s combined reserves are enough to cover 20% of current EU gas consumption for another 35 years. To this one may add over 5000 bcm of further resources, part of which may be produced as well if economic and technological conditions are met.

These figures may even be revised upwards should the EU decide to encourage exploration for gas. Recently, Greece announced it may hold 600 bcm of recoverable reserves, while Romania intends to produce 10 bcm per year from the Black Sea in 2026!

Can the EU afford to ignore the potential of the Mediterranean and the Black Sea as it tries to replace Russian gas supplies?

The time to act is now

The gas industry lifecycle is both time and capital-intensive. Years go by from exploration to site appraisal, and infrastructure development to actual production. If the EU wants to reap the full benefits of its own reserves and limit its future import bill, the time to act and setting the necessary regulatory conditions at EU and national level is now.

The good news is that Europe is home to some of the world’s largest and most efficient oil and gas companies, with world-leading skills, financial power, advanced and innovative technologies. Our companies are the ones that are called upon to help develop the world’s most complex and largest projects.

In the EU’s quest to become independent from Russian energy supply, accelerating existing efforts to save energy and develop renewable energies is a no-brainer. Every week, one of our member companies announces the development of a new wind, solar, or charging station project. And every one of them knows how much their gas production assets are complementary for the energy transition underway.

Last but not least, European gas production is subject to the world’s highest environmental standards, resulting in a 30% lower environmental footprint than the global production average, with nearly no upstream methane emissions left to mitigate. Each cubic meter of domestically produced gas would therefore help the EU reach climate neutrality faster than with imported volumes.

Given the continued role of gas on the way to EU and global climate neutrality, the risk of stranded assets is minimal. Furthermore, combined with Carbon Capture Use and Storage, our gas reserves can be decarbonized and turned to hydrogen, helping the EU reach its Hydrogen ambitions.

There are numerous reasons to act, none not to.

The upcoming REPowerEU Plan and its associated initiatives are the opportunity to strengthen Europe’s own gas supply and strategic autonomy. By breaking the taboo, the EU can walk into the new geopolitical environment stronger than it ever was, and still come out the global climate leader it needs to be.

[i] Rystad Energy

[ii] Eurostat

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