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

In addition to energy savings, diversification of imports and renewable energies, Europe must also look inwards to secure its energy supply. Our continent still holds vast reserves of gas that can help replace Russian imports and help contain our import bill in the process. Curiously, the political decision makers in Brussels are aware of this, but too timid to promote the idea outside the informal discussions of “dinners in town”.

In the days and weeks following Russia’s invasion of Ukraine, the European Commission and EU leaders were quick to react with proposed measures to secure short-term energy supplies. of the EU and by deciding to replace all imports of Russian gas (155 billion m3) by the end of the decade, of which 2/3rd by the end of 2022.

While the key measures set out in the March REPowerEU communication (import diversification, biomethane production, energy savings and faster electrification) will undoubtedly help to reduce dependence on Russian gas imports, the he increase in Europe’s gas production was nowhere to be found, to the point where one begins to wonder if it has become a taboo in European discussions.

Together, the EU and Norway hold 3470 billion m3 of known gas reserves[i]that is the equivalent of 22 years of Russian gas supply.

If the EU is ready to do what it takes to install 10 million heat pumps in the next five years, find an additional 50 billion m3 of non-Russian gas imports and produce 35 billion m3 of biomethane from By 2030, why couldn’t it just as well make the most of its known gas reserves and try to find new ones? Does the EU really need more of the same?

The REPowerEU plan which will be published in the next few days and the subsequent action of our European institutions offer the opportunity to give this essential component of our collective energy security the importance it deserves, while strengthening the resilience and EU strategic autonomy within the framework of climate neutrality.

The return of the “reality check”

In 2019, before the pandemic, the EU produced around 100 billion cubic meters (bcm) of natural gas, around 20% of its own demand. This figure has fallen to around 50 billion m3 in 2021[ii]increasing our dependence on Russian gas imports to over 40%.

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

As Europe’s historic fields slowly emptied, EU leaders repeatedly reaffirmed the transitional role of gas in their rhetoric, but did little to support exploration on the continent, reducing the chances of finding new resources while natural gas consumption remained relatively stable.

Coupled with calls from activist organizations for a halt to fossil fuel extraction – without distinction between gas and coal – and a proliferation of politically celebrated bans and moratoriums on oil and gas exploration, the The way forward was clear: no particular attempt would be made to mitigate the growth of our import dependence.

If the diversification of our sources of supply is necessary, Europe must not trade one dependency for another – this also applies to the raw materials needed for renewable energies. We must maintain a healthy balance between imports and domestic production in order to enjoy the highest level of self-sufficiency possible.

Are our households and industry not largely dependent on gas for heating and production processes? Don’t we use gas to produce fertilizers that guarantee our food security? Don’t our gasworks keep the lights on when there’s no wind or when the nuclear plants are under maintenance? Isn’t it therefore the role of the EU to encourage, as far as possible, the persistence of domestic gas production for as long as necessary, in accordance with our objectives of climate neutrality?

This is why the European Commission must call on Member States to lift existing exploration bans, to identify the remaining regulatory and physical barriers that prevent existing fields from increasing production, to speed up authorization processes, or even to replicate at EU level and to the extent possible the UK’s Economic Recovery Maximization (ERM) strategy.

All this can be accompanied by a long-term plan for the gradual transition of European oil and gas production assets so that they can provide the skills, technology and infrastructure needed to achieve the climate neutrality objective of the EU.

We also have “freedom gas”

Earlier this year, in February, the European reality changed. Now is the time to lay the foundations 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 from the European Commission, the additional domestic production and gas imports are helping to fill EU storage levels before next winter.

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

Investing in parallel in our domestic production today will help mitigate volatility tomorrow, while generating significant revenue that can help support vulnerable consumers.

The combined reserves of the EU and Norway are sufficient to cover 20% of current EU gas consumption for another 35 years. To this we can add more than 5,000 billion m3 of additional resources, part of which can also be produced if the economic and technological conditions are met.

These figures could even be revised upwards if the EU decides to encourage gas exploration. Recently, Greece announced that it could hold 600 billion m3 of recoverable reserves, while Romania intends to produce 10 billion m3 per year from the Black Sea in 2026!

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

It’s time to act

The gas industry lifecycle is both time-consuming and capital-intensive. Years pass from exploration to site assessment, and from infrastructure development to actual production. If the EU wants to take full advantage of its own reserves and limit its future import bill, now is the time to act and put in place the necessary regulatory conditions at EU and national level.

The good news is that Europe is home to some of the largest and most efficient oil and gas companies in the world, with cutting-edge, innovative skills, financial muscle and technology. It is our companies that are called upon to participate in the development of the most complex and important projects in the world.

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

Finally, European gas production is subject to the highest environmental standards in the world, resulting in an environmental footprint that is 30% lower than the global production average, with almost no upstream methane emissions to mitigate. Each cubic meter of gas produced locally would therefore help the EU to achieve climate neutrality faster than with imported volumes.

Given the continued role of gas on the road to European and global climate neutrality, the risk of stranded assets is minimal. Moreover, combined with carbon capture, use and storage, our gas reserves can be decarbonized and transformed into hydrogen, helping the EU achieve its hydrogen ambitions.

There are many reasons to act, none not to.

The upcoming REPowerEU plan and its associated initiatives are an opportunity to strengthen Europe’s gas supply and strategic autonomy. By breaking the taboo, the EU can enter the new geopolitical environment stronger than it has ever been, while remaining the global climate leader it needs to be.

[i] Energy Rystad

[ii] Eurostat

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