Europe’s energy blindspot – gas can be the solution
Javier Blas, one of Bloomberg’s most respected energy commentators, recently concluded a thought-provoking analysis of Europe's gas & energy markets with a multi-billion-dollar question that many EU policymakers might prefer not to hear:
"If Europe remains so short of gas that it would need a deal with Trump for more American LNG, why isn’t Brussels pushing for incentives to boost domestic gas production, including lower taxes?"
You can read his full article here.
The question highlights an ongoing energy problem, which stretches beyond the EU, from the Atlantic to the Black Sea. And it's not a new issue. It encompasses the key energy issues: security, emissions reduction, decarbonisation, and pricing. These have been at the heart of the energy debate for decades.
Energean has long championed the role of domestic and regional gas production as a cornerstone of energy security and a catalyst for sustainable energy systems. The benefits are clear: domestic production reduces reliance on volatile global markets, curbs emissions by displacing more polluting fuels, and provides the stability needed to support renewables.
At our operations in the Eastern Mediterranean the benefits of this approach are clear.
This isn't just about economics – it's about creating opportunities for a cleaner, more sustainable energy system. The added liquidity in Israel's gas market is already facilitating the displacement of coal, paving the way for an increased renewable capacity. Crucially, gas provides the reliability needed to manage the intermittency of renewables, ensuring energy security while accelerating decarbonisation.
Gas has even had a geopolitical impact in the region, strengthening ties between Egypt and Israel – an example of how energy can act as a bridge rather than a barrier.
Europe's Dilemma
While countries like Israel have embraced domestic production to underpin their energy strategies, much of Europe has taken a different path. Governments have prioritised access to global LNG over developing their own gas resources, often restricting domestic production or limiting it to supermajors.
This strategy is not without risk. Europe's reliance on a tight and volatile global LNG market leaves it vulnerable to geopolitical events. For instance, recent sanctions on Gazprombank have made Russian pipeline gas and LNG even harder to access, underscoring the fragility of depending on international suppliers.
A decade ago, this approach seemed logical. The assumption was that Gazprom and other major suppliers would reliably meet Europe's needs until renewable technology could fully replace fossil fuels. In some regions, this transition is advancing rapidly, but in others, it is not – resulting in price spikes and renewed fears over energy security.
Israel's pragmatic energy policy offers lessons for Europe. By prioritising domestic gas production, Israel has displaced coal, enabled renewables and strengthened its energy security. Energean is proud to support this balanced approach through our operations.
The question now is whether Europe will reassess its approach. Can domestic gas production, alongside renewables, play a more significant role in securing affordable, reliable, and sustainable energy? At Energean, we believe it can – and must.