The Russian-Ukrainian war has caused Europe to declare that it will end its energy dependence on Russia within a few years but it is not so easy to cut off natural gas immediately. Russian natural gas that does not need to be transported by pipeline needs to be converted to liquefied natural gas. Another method is install a new pipeline! The EastMed pipeline project to transport gas from Israel to Europe, long stillborn, can begin to operate again.
Germany froze the Nord Stream 2 natural gas pipeline plan after the war between Russia and Ukraine. Not only will the new gas pipeline fail but the existing Russian gas supply may also be interrupted at any time for various reasons. For example, the EU may decide to sanction the existing Nord Stream 1 pipeline gas delivery or Russia may threaten to stop the gas. If Russia's natural gas supply is currently cut off, Europe will have a shortage of 40 million tons of natural gas per year, accounting for about 10% of total consumption.
Even if Russia's natural gas supply is not suddenly interrupted by the war, the EU and European countries have announced that they will break away from Russian energy dependence and seek alternative sources of energy supply. Many of them have increased the import of liquefied natural gas (LNG) but this has led to a surge in global prices. It is not only Europe that is rushing towards LNG, the Philippines and Vietnam are also vigorously importing LNG, while Taiwan's energy strategy is expected to reach 50% gas-fired power generation, and likely to increase the purchase of LNG. China is expected to import an additional 8.5 million tons of LNG in 2022.
In 2021, Asian LNG demand originally grew by 8%. In 2022, when Europe joined the competition to push up prices, Asian demand growth dropped to 2%, while European demand surged by 20%. After all, Europe can afford higher prices than Asia but it cannot spend money like this all the time and Europe will suffer in the long run. It is better to have other more stable sources of natural gas. So the East Mediterranean gas pipeline project, long stillborn, is now a good idea.
The Eastern Mediterranean Natural Gas Project is a project to transport natural gas to Europe from Israel, via Cyprus, Greece, and Italy. It was first announced in 2016, with a total length of 1,300 miles, of which 1,000 miles are submarine pipelines, with a total budget of US$7 billion. It was originally scheduled to be completed and online in 2025 but the required financing could not be obtained. The reason was very simple. Europe was not facing the current energy crisis at that time and it underestimated its own natural gas demand. In addition, the world is suffering from a "carbon allergy" and burning natural gas will produce carbon dioxide, so no construction that increases the supply of natural gas should be undertaken.
Fundamental issues that could improve Europe's energy strategy
Originally, the Trump administration also supported the plan due to regional strategic factors. When the U.S. administration was rotated, the situation became even more unfavorable. In January 2021, the Biden administration notified Israel, Greece, and Cyprus, no longer expressing support, saying it will be more beneficial for the three countries and the region to develop renewable energy output in the future. That is, Biden has the same carbon allergy as Western European countries. Another consideration is that Turkey and Greece are constantly in conflict over exploration in the Eastern Mediterranean. In order to win over Turkey to jointly defend against Russia, Greece and Cyprus are held at arm’s length for the time being.
Israel is not giving up energy output as a means to enhance the country's foreign trade and strategic position. In December 2021, Israeli Prime Minister Bennett held talks with the Greek and Cypriot Prime Ministers. The Euro-Asia Interconnector project also runs from Israel via Cyprus and Greece but with submarine cables that transmit the renewable green electricity that Biden is hoping for.
Countries in the Middle East are preparing for the post-oil era. Many countries are using the desert to build large amounts of solar and wind power generation. Israel's neighbor Jordan has erected a large-scale solar energy project with the assistance of Israel and signed an agreement with Israel to exchange electricity for desalinated water. If Israel completes the construction of the Euro-Asia Interconnector feeder, it will be the gateway for Middle Eastern wind/light green energy to be transmitted to Europe in the future and direct access to electricity in Europe can also reduce natural gas demand for gas-fired power generation.
However, waiting for countries to slowly build large-scale green energy construction does not fit present urgency. The fastest way is to restart the Eastern Mediterranean natural gas project. The entire Eastern Mediterranean natural gas reserves are as high as 76 years of EU usage and the reserves in the waters controlled by Israel are as high as 26 billion barrels of crude oil and 7.734 trillion cubic meters of natural gas. Israel can strengthen its alliance with Europe through gas transmission and become a major energy exporter.
Chevron CEO Michael Wirth revealed at the CERAWeek annual energy conference that discussions on the Eastern Mediterranean natural gas pipeline have restarted. Although construction will still take several years and it will not be able to solve the urgent needs but completing it as soon as possible will improve the basic problems of Europe's energy strategy. The Russian-Ukrainian war can be said to have created a new opportunity for Israel. However, the Russian-Ukrainian war may not last for several years. Whether it can finally be realized depends on whether the basic national strategic minds of European countries have been awakened by Russia.
（Image：EuroAsia Interconnector）