Energy Security: Policymakers have to make a positive decision on domestic E&P

Energy Security: Policymakers have to make a positive decision on domestic E&P

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Yesterday, at the Greek-British Symposium in London, Paddy Blewer, Energean’s Head of Communications & CSR took part in a discussion forum considering the energy security challenges faced by the EU, Greece and the UK in the light of the Russian invasion of Ukraine.

 

The distinguished panel considered the effects on European energy security, industrial capacity and socioeconomic dynamics; not just because of the results of the Russian – Ukrainian war, but as a result of over a decade of EU and (ex in the case of UK) member state energy transition, environmental and sustainability policy.

 

It is against this background that Energean’s core argument on the panel was that the EU and its member states need to make a series of strategic policy decisions.

 

The vast majority of EU energy and environmental policy was written with the assumption that the EU would be able to take as much gas as Gazprom, Equinor & Sonatrach could deliver, until the necessary technological, engineering and investment challenges have been overcome and there could be a massive reduction in molecular energy consumption. This assumption follows on from the earlier European decision that domestic E&P should be cutback in favour of importing molecular energy, to demonstrate a commitment to fight climate change.

 

We argue that both that assumption and previous decision should at least be reconsidered. 150 bcm+ per year from Russia is now drastically reduced and whilst there is a lot more Russian LNG coming into Europe, the pipelines that used to supply 30-45% of European gas consumption will never return to their previous capacity – creating a very clear energy security risk and consequent socioeconomic challenge.

All parties must secure a sustainable as possible molecular energy supply. Electrons will not fully replace molecules for decades across primary energy consumption and the global LNG market is too tight to guarantee molecular availability. This in turn creates a significant socio-economic risk across European society due to the millions of jobs either directly within or associated with heavy industry; which relies on a secure supply of natural gas.

Domestic E&P in Greece & Italy are clear and positive options that would help EU member states manage the significant energy security risk. In addition to the obvious security of supply benefit, domestic production will almost certainly be significantly less pollutive than LNG based import, due to both domestic HSE & environmental regulation and the shorter transportation differences – not to mention the constant global travel of energy executives scouring the world for new liquidity sources.

Whilst we have and will continue to argue for enhanced domestic E&P, this wasn’t our primary request of policy and regulatory stakeholders. It is more challenging to operate within sovereign states where policy commitment is unsure. Our primary request therefore was for policy makers to make a firm decision.

Our core request was for multiple parties to truly commit to domestic E&P, or to walk away from the discussion, but make a firm decision, so that Energean can focus its capital and capacity where it can create the most value for all stakeholders.