Opinion

Mediterranean gas, a dividend or a challenge?

Mediterranean Gas

Recent events in the eastern Mediterranean over the gas dispute have created dangerous prospects for relations between the region's neighbours.

The discovery of the latest gas fields is increasing regional turmoil, provoking various reactions: tension between Turkey, Greece and Cyprus; between Lebanon and Israel; the absence of a law demarcating maritime boundaries between Lebanon, Israel and Cyprus; or the war in Syria and the appetite of other external players such as Russia, China and Qatar, are causing a volatile and highly complicated situation. 

These discoveries have generated new expectations in the world energy market; they pose new challenges for governments and international players, and start the race to exploit the wealth discovered. Furthermore, they have regional economic implications, as the eastern Mediterranean could probably become one of the main global areas of gas supply. The region's resources are estimated at 122 trillion cubic feet of gas, plus 1.7 million cubic meters of oil off the coasts of Syria, Lebanon, Cyprus, Israel, Egypt and Palestine.

The United States and Russia, the world's largest producers of natural gas, are poised to play a role in brokering and benefiting from the coming crises. All this means that the European powers, despite being the main beneficiaries of this wealth, could be left behind.

The Mediterranean region has no shortage of conflicts or strategic challenges for the coming years, and there are many factors that come together to trigger a possible crisis. For example, Turkey's plans for expansion into the Mediterranean, a conflict that almost triggered a war between Turkey and Greece a few weeks ago and was avoided by the efforts and pressure exerted by Chancellor Angela Merkel. At the same time, tension prevails on the Libyan front, with the risk of an Egyptian-Turkish conflict. In any case, Europe is involved in power and energy struggles in the Mediterranean.

In the era of the European eclipse within the scenario of international relations, France, Italy and Spain are trying to maintain an active European presence in the Mediterranean because it constitutes, together with Western Asia and North Africa, an extension of European economic and strategic security. Europe would therefore be making a serious mistake if the security of the eastern Mediterranean were left to other parties.

Energy security is a major concern. The EU should have alternatives to diversify its sources of supply, as well as its political and economic risks, and limit its dependence on Russian gas, which represents 38% of its imports. The crisis in Ukraine and the possibility of an interruption in gas supplies to Europe show the need for solutions, and recent major discoveries in the eastern Mediterranean give the EU the option it is rightly seeking. 

The overall quantities may justify a new pipeline between the eastern Mediterranean and Italy and the rest of Europe. From the southern Mediterranean, there are already pipelines transporting gas from Algeria to the EU, where 70 per cent of the Maghreb country's production is directed. Algeria is the world's third largest gas exporter with a production capacity of 80 billion cubic feet of LNG. But it would be necessary to complete the MIDCAT pipeline through the Catalan Pyrenees, whose capacity is precisely 8 billion. This would make Spain a 'hub' or transit country, providing it with large revenues and economic benefits.

One of the advantages of exploiting Mediterranean gas is not only the great opportunity for development and growth for the new producer countries, but also for the EU, which by 2030 will need to import some 113 billion cubic metres a year.

Until 2035, demand for natural gas is expected to grow by an average of 1.9% per year, outstripping all other energy sources. Global energy consumption is also expected to grow by 41% by 2035.

Internal and geopolitical risks are the main causes of all this. Some countries will have to join forces if they are to harness their resources and find the best economic and strategic solutions to optimize their operations. They will have to bear in mind that exploiting these huge gas reserves and attracting immense foreign investment will not be possible without promoting a peaceful and stable environment among them.

This COVID-19 crisis reminds us of the importance of the collective, of proximity, of interdependence and of the need for a shared long-term vision, which is essential for mobilising the resources needed to develop energy cooperation between the two sides of the Mediterranean and to promote the construction of an energy market in the region. 

There have been several initiatives in the field of Euro-Mediterranean energy cooperation that have not generated significant results. Therefore, the main public and private actors should multiply their efforts to change this trend, as they are all aware of the mutual dependence on energy between Europe and the Mediterranean.