European dash for gas at odds with climate ambitions

Print Friendly
LNG ship bound for new LNG terminal in Lithuania

LNG ship bound for new LNG terminal in Lithuania

European energy and European climate policies, although often portrayed as being two sides of the same coin, are still not sufficiently harmonised, writes Stefan Bößner, Research Fellow at the Stockholm Environment Institute. The EU’s new LNG and gas storage strategy serves as a prime  example where EU energy security concerns work against climate protection efforts. The strategy is likely to lead to costly investments into infrastructure which may not be needed and which come at the cost of other options to enhance climate protection and energy security.

The European Union often claims leadership on climate change. The EU not only saved the Kyoto Protocol by convincing Russia to join but also pushed for an ambitious climate agreement prior to the Paris Climate Conference (COP 21) last December. It is the only developed economy of comparable size that sources 26% of its energy needs from low-carbon sources and its 2030 goals to reduce emissions by 40% are among the most ambitious in the world. So far so good.

The European Commission acknowledges the importance of “avoiding the ‘lock-in’ of high emissions infrastructure and assets.”  But tis is exactly what might happen when one looks at the EU’s recent LNG and gas strategy

But despite those ambitions, the EU is likely to miss its contribution to limit global warming to two degrees (as decided upon in the Paris Agreement). And while some member states demand to raise the EU’s climate ambitions others refuse to do so, illustrating existing frictions between EU and member state policy making. But the EU itself is not without fault either. The European Commission also pursues conflicting aims sometimes in its climate and energy policies.

In principle there is no reason why climate and energy policies should not work well together. With regard to climate change policies, the EU aims to achieve a low-carbon economy by 2050 by cutting its emission by 80%-95, while its energy policy is pursued with the three pronged approach of security of supply, competitiveness and decarbonisation. The recent Energy Union project – set to streamline individual member states’ energy policies which are often pursued out of national interest instead of mutual solidarity – even calls itself a “framework strategy for a resilient energy union with a forward looking climate change policy.”

Geopolitical headaches

However, the Commission’s recent EU strategy for liquefied natural gas (LNG) and gas storage is an example of a policy initiative that contradicts the EU’s climate ambitions as evidenced by its Communication concerning the Paris Agreement.

On the one hand, the European Commission acknowledges the importance of “avoiding the ‘lock-in’ of high emissions infrastructure and assets.”  One the other hand, this is exactly what might happen when one looks at the EU’s recent LNG and gas strategy.

If the controversial Nord Stream 2 pipeline would come on stream, it would dump additional volumes on an already tepid market which would put further doubts on the economic viability of additional LNG projects

In the new strategy, the Commission praises LNG as “major opportunity” for the EU to enhance its energy security since most of Europe’s gas imports reach markets via pipelines which originate mainly in Russia, a country which has long been the source of energy and geopolitical headaches. The EU has made some significant progress (and continues to do so) in boosting its gas security by assuring pipeline reverse flow capacities or tasking member states with having emergency plans in the case of supply cuts. But import dependency on Moscow remains high and a fully integrated internal energy market unachieved.

It is therefore understandable to look to other options such as LNG to satisfy European energy security needs. But while the new LNG strategy acknowledges the need to further integrate energy markets, to streamline regulation and to make use of existing gas infrastructure, it also recommends new investments based on a list of projects of common interest (PCI). And this is where it gets tricky.

Economic uncertainties

First, those developments would come at a certain cost. The Commission foresees a need of € 5 billion for the projects mentioned in the LNG strategy alone. Moreover, the European Network of Gas Transmission operators (ENTSOG) foresees 39 additional LNG projects up to 2025 while Gas Infrastructure Europe indicates planned LNG terminals would boost the EU’s regasification capacity to 324 bcm by 2020, which would be almost equivalent to all European gas imports in 2014 which amounted to 346 bcm.

Building more gas infrastructure than absolutely needed is likely to contribute to a carbon lock-in where future fossil fuel developments are favoured over low-carbon technologies in Europe

Are these investments necessary? With its current LNG import capacity of about 195 bcm the EU can already source more than 50% of its annual gas imports from LNG. Currently, the utilisation rate of this infrastructure has fallen to 14% in 2014 meaning that most of it remains unused. Nevertheless, the Baltic states, which consumed 3.6 bcm of gas in 2014, are already planning to construct an additional 11.5 bcm of annual LNG capacity while simultaneously a € 558 million pipeline is scheduled to be built between Poland and Lithuania to alleviate the region’s energy dependency on Russia. In times of recession it is questionable whether this type of investment in more assets is wise, especially if one wants to avoid lock-in of high-emission infrastructure.

Second, there is great uncertainty about the future of European gas demand . For years, natural gas consumption in Europe has been declining. There are several reasons for this, including fierce competition from cheap coal. Some analysts foresee a bullish LNG market in the future, but one has to keep in mind that forecasts are complex matters and often don’t anticipate the future well. The International Energy Agency’s (IEA) constant underestimation of renewable energy potential serves as one example, the EU’s own overestimation of gas demand as another. If the controversial Nord Stream 2 pipeline would come on stream, it would dump additional volumes on an already tepid market which would put further doubts on the economic viability of additional LNG projects.

Environmental benefits

And third, there is the environmental question. The focus on gas would not in itself be so bad, if increased use of gas would help the EU realise its climate ambitions. But this is far from being the case.  As our work at the Stockholm Environment Institute (SEI) shows, the environmental benefits of gas, generally less CO2 intensive than coal, depend significantly on the sectors it is used in and which fuel it replaces. For example, benefits from replacing gasoline and diesel with LNG in the transport sector – as foreseen by the EU Commission’s LNG strategy – might even lead to no significant CO2 savings depending on local circumstances.   And as long as coal and ETS prices remain low, the biggest savings potential of replacing coal fired power with gas is easier in theory than in practice. Thus,

Building more gas infrastructure than absolutely needed is likely to contribute to a carbon lock-in where future fossil fuel developments are favoured over low-carbon technologies in Europe. In the wake of the Paris agreement and the realisation that more has to be done to limit global warming to 2 degrees (let alone 1.5 degrees) it is therefore doubtful whether the new European LNG and gas storage strategy will help European climate policy.

Member states might think about whether their mainly national energy policies really provide the needed climate protection and energy security in the long term or whether the clout of 28 nations united in solidarity is a better hedge against supply disruptions and a changing climate

What can be done to align climate and energy policy better?

As a first step, the EU and its member states could move away from seeing energy security only through the gas prism. As the European Commission rightly points out, energy efficiency measures and a better integration of the European energy market with the right pricing mechanisms would already enhance EU energy security.

Furthermore, increasing the share of renewable energy, while not without challenges, contributes to energy security since unlike externally imported energy sources, renewables do not depend on foreign suppliers. Europe has the legal and technical know-how to integrate intermittent renewables into the internal electricity market by increasing flexibility, facilitating cross-border trade and pro-active demand side management. In doing so, enhancing energy security would come with the added benefit of mitigating climate change and bringing energy and climate policies closer together.

As a second step, member states might think about whether their mainly national energy policies really provide the needed climate protection and energy security in the long term or whether the clout of 28 nations united in solidarity is a better hedge against supply disruptions and a changing climate. After all, it was European internal market rules which challenged Russian state owned player Gazprom (still the dominant player in European gas markets) and the EU’s security of gas supply provisions have made the EU more resilient to supply shocks. A more cooperative approach to security of supply would therefore make some infrastructure investments unnecessary and save a significant amount of CO2.

Finally, the EU and its member states might consider that it is in their benefit if they assumed their climate leadership once again. They can regain their leadership role by consequently integrating climate change mitigation strategies into other policy areas. Europe can’t wean itself off gas in the short term and strategies have to be in place to deal with this dependency. However, when those strategies work against effective climate policies and are pursued despite other options (increasing energy efficiency, strengthen the internal energy market, boost renewable energy output) being available, they risk to neither enhance European energy security nor climate protection.

Editor’s Note

Stefan Bößner is a research fellow at the Stockholm Environment Institute (SEI), Oxford office. He focuses on European climate change and energy policies as well as European and international energy transitions.

For another critical look at planned LNG and gas infrastructure investment in Europe, see this report published on 3 March by E3G, RAP, WWF, Agora Energiewende and European Climate Foundation.


  1. Grace Adams says

    I personally favor a mix of wind, solar, huge multi-megawatt batteries, and bio-fuels from otherwise waste organic material including sewage, municipal solid waste, and livestock manure, with some storage of bio-fuels as bio-fuels.

  2. says

    Another bogus article, clearly indicating that religion has defeated science. We have turned our back to the enlightenment.
    The climate is not understood, we do not know how and how much increased CO2 levels cause warming. We do not understand what causes climate change. The influence of over 3 million vulcanos at the ocean floors is completely omitted. We do not understand solar activity…. The climate models are 400% wrong and never explained previous cold and warm periods.
    Even more alarming is the false optimism for renewables, better called “unreliables” .
    Progress Always amounts to less dependence on land and nature. Windfarms are backwardness in all respects.
    A brief look at history falsifies the need to be susatainable. Our main goal should be to maintain /increase prosperity by innovation, sustainablity should be the result.
    The planet is doing fine, a little warming and higher CO2 concentrations is very benificial.
    Climate alarmism is religion and political activism, not science.

    • Edward Okumagba says

      I certainly agree with the last comment. From the Nigerian perspective, there is no evidence of climate change or global warming but there has been series of ratification of international conventions with commitments by the Nigerian government just because it is the current trend. If it rains for 7 days non-stop, its climate change. If cattle herdsmen clash with local farmers over grazing lands, it desert encroachment in the sahel region, and as such its climate change. I certainly do not sell hence I am not buying it.

    • Kent Doering says

      Mr Dirkse, you demonstrate profound ignorance of Europe and the European renewables situation with your comments.

      Coastline and offshore wind is very reliable, and gas fired, combined cycle provide excellent back up baseline power.

      Germany already gets over 33% of its power from renewables. Munich, where I live,is already 50% renewable,and will be 100% renewable by 2025.

    • Grace Adams says

      It does seem that for over 250 years progress has been in direction of exploiting more and more fossil fuel. Now it starts to seem that we are running out of capacity to dispose of wastes, especially waste heat from all that burning of fossil fuel. Now we need to back up some and figure out how to dispose of wastes especially excess heat or switch to renewable energy. Wind and solar, which you point out are intermittent, are our two most abundant sources of renewable energy. Thus we need energy storage to save some from times of abundance to times of scarcity. We have made progress over last few years in making wind power, solar, power, and energy storage all more cost-effective. So it is a matter of investing in means to harness renewable energy and store it. We have some geothermal energy, which is both renewable, store-able, and dispatchable. We don’t have enough to meet all our need for energy. MIT in 2007 in “Future of Enhanced Geothermal Systems” claimed that enough geothermal energy was under USA within 10 kilometers of surface to supply 10% of our demand for electricity cost-effectively. With technological advances since then, I suspect we can meet 20% of our demand for electricity with geothermal now.

  3. Edward Okumagba says

    Kent Doering, if Germany as you rightly observed, attained 100% renewable by 2025, will that qualify to offset the GHG emissions of the wider Europe or European Union? Dont you think treating or having isolated cases will not sell renewable the way oil and gas received widespread acceptability as the primary energy source of most nations? This farce over renewable is not taking us any where yet, not even in developing countries.

  4. Kent Doering says

    @Edward Okumagba:

    Sir. Munich will be 100% renewable by 2030 for power and tripled district heat systems. Germany as a whole won´t be 100% renewable for power until 2030.

    The combination of energy efficiency and renewable energy measures is known as “sustainability”. In 2011, the German “sustainability sector” outpaced the automotive sector and now comprises over 13% of the gross national product.

    Germany is not the only European country going 100% renewable and/or nuclear for power and building heat via a variety of energy efficiency and renewable energy projects. Take a look at Austria, the Netherlands, Belgium, France, Italy, Denmark, Spain, Sweden and Portugal.

    They are all going off fossil for power and building heat. The E.U. goal is an 80% reduction of emissions by 2050. I have reason to believe it will be closer to 95%.

    There have been recent breakthroughs in solar p.v. where efficiencies have been nearly doubled, and the price of silicon and glass will have been cut by over 50% – meaning solar p.v. at a racked and installed price of under one euro per producing watt.

    It looks like you work in the Nigerian oil and gas industry. Fracking, not renewables, is what has been driving oil prices down. The Weald Field is opening up west of London – with proven reserves of over 2 trillion barrels of oil and close to three trillion cubic meters of natural gas- which will be opened by Petro-fracking. The Barashnekov field in S.W. Siberia also has a known content of 2 trillion barrels of shale oil and another three trillion cubic meters of gas.

    Oil prices are not going to go above $50 per barrel for the foreseeable future. And, when Germany leads the way in aqueous fuel systems, and the Japanese, the Americans, the Koreans,and the Chinese pick up on those dual fuel, aqueoús fuel systems,

    Passing steam through an elongated, tubular magnetic field with Tesla strengths of over Tesla 5- breaks it down to hydrogen and oxygen! And that is one of the secrets behind the next development coming out of the German automotive industry, namely “dual fuel” systems which start off a mix of “hho” (brown´s gas) and then, after engine heat up, runs 100% off of ordinary tap water.

    Running captured carbon dioxide through the same patented device breaks it down to carbon and o². Combine carbon capture- breakdown and steam dissociation- and every garbage incineration and coal fired power plant in Germany will be producers of Fischer Tropsch process gasoline, diesel, and kerosene.

    France and Italy already manufacture “Aquasol” which boosts the refinery heat emulsified content of water in diesel from 20 to 30%.
    As it is unstable, it has to be used quickly, but it already is in use for high use city busses and trucks.

    Don´t forget that Germans invented the gasoline and diesel internal combustion engines and the automobile, motor bus, and trucks. Now the industry is currently developing and testing a number of different approaches to displacing fuel with water- in various forms of Aqueous Fuels systems.

    Waste to power and district heat garbage incineration plants are now mandated in Germany to lower greenhouse gas methane emissions from garbage dumps. With magnetic resonance steam dissociation, and magnetic resonance carbon dioxide breakdown- those power plants will produce artificial gasoline and diesel fuel from recaptured carbon dioxide. Ditto for carbon capture coal fired power plants.

    That will cover the remaining fuel needs for the vehicle fleets running with “dual fuel” aqueous fuel systems.

    As Gracie Adams pointed out above, Germany is engaged in energy efficiency plus a broad range of renewable energy systems. Advanced solar voltaic – will be producing about a 3rd of German summer weekday, daytome
    ower needs. And at night, bio-methane recapture from livestock manure on about 200.000 German farms will provide an additional 100 megawatts of power for the other 12 hours of power- at night or when the panels are snowed or frosted over.

    Back to Northstream II. It is being built with German participation.
    domestic East West and North South pipe lines have been or are being built to carry North Stream gas into Northrhein Westphalia and the Benelux countries and France, and North South lines to southern Germany, Austria, and Switzerland.

    Germany is building North Stream, but that is not cutting the investments in renewables- energy efficiency systems.

    In Germany, natural gas will continue to be displaced by “wind syn gas” hydrogen, carbon capture – steam dissociation syn gas, sewage system and rural agrarian two phase – “bio-gas” digesters and storage, and large scale- steam dissociation systems. The gas infrastructures are amortizing now, but will gradually be displaced by syngas and bio-gas systems.

    l´d like to give a concrete example. Siemens built a combined cycle, power plant at Irsching for E.ON – Bayern A.G.. It had to ramp down so often due to renewables that it was losing money. Putting the Irsching plant back into the black means taking the steam lines- and running them throug special “magnetic resonance-steam dissociation” lines- meaning the plant can literally use its own steam as fuel in violation of the 19th century Helmholtz dictum-. “you cannot run an engine off its own steam.” That will slash its natural gas demands by over 90% and cut costs.

    Germany saved money´on gas transit fees with Northstream I and it will save even more with Northstream II. Those net savings will be nost likely reinvested in renewables, or energy efficiency measures.

    The village of Wildpoldsried in the Bavarian Algau region is an
    excellent example of how the German energy transition works. Back in 1995, when solar and wind were much more expensive, the vollagers followed a plan by its mayor to go 100% renewable for heat and power using a small hydro-electric dam, manure methane recapture in small combined power heat units, solar heat, heat pumps, solar voltaic p.g, and wind.

    They kept building out with the savings and feed in tariff rate
    rate profits. Wildpoldsried has invested over € 30 million in the different technologies and generates 8 times more power than it consumes, even after having attracted “Sonnenbatterie a.g.” to settle there.

    And since wind, solar, and bio-gas power had feed in tariff rates, the annual r.o.i., return on investment is still over 20%. i.e. 6 million Euros a year, which they turn around and re-invest in “renewable energy harvesting”. and storage.

    The country as a whole will have 38 % renewable energy in its power mix of 2016- up from 28 2.% in 2014.

    That is, investors and utilities, etc. are taking the fossil fuel savings achieved from prior investments in energy efficiency and renewable energy systems, and re-investing in more of the same, or different, more efficient, less expensive renewables. (the price of solar panels has halved over the last ten years while solar to power efficiciencies will have nearly quadrupled by 2018, or 2000 rates. i.e. 2000 efficiencies were about 10%, and today´s panels are between 20 to 22.2 % but new advances by the Fraunhofer society and others will boost German panel efficiencies to over 38.5.%.

    Magnetic resonance ionized steam ignition will slash the fossil fuel costs of the metal sheet backing, the silicon, and the plate glass, glass voltaic covers. cutting the materials costs.

    Turbo charging this advanced solar at night with a positron charge also enables it to capture the positron wave functions of beta particles related to gravity and that in turn drives a d.c. generator powering a conventional 220 volt generator. Daytime ultra efficientnt, cost reduced solar, nighttime gravity field retransformation systems.

    As the Wildpoldried example shows, the more capital expenditure for fossil fuels is saved, the more is invested.

    If we were to take Munich SWM combined cycle power plants off gas and put them on “steam dissociation” – and the Irsching plant the same way, that leaves enough surplus gas- to do something else.

    With steam dissociation, we could take the Isar II nuclear reactor- upgrade with 4 big Siemens gas and steam turbines- doubling power capacities, and then run large volume gas pipeline to the plant. Start the rebuilt plant at night with piped in and stored natural gas, and then shift- from gas to “magnetic resonance ionized steam dissociation” where the gas turbines literally “burn steam” as fuel at 1800° centigrade.

    All German nuclear power plants can be upgraded this way, at a cost of approximately 1.2 billion per reactor, which in the long run, is cheaper than shutting down and tearing down. (a reactor demolition is not cheap- close to 1 billion per reactor- so it i cheaper to upgrade- leave the old reactor building stand- and convert to “aqueous fuel”- magnetic resonance steam dissociation, combined cycle for just a bit more- while not only retaining the p.g. capacities, and capital value,
    literally running them off their own steam.

    Nuclear used to provide 25% of German power needs, 50% in Bavaria.

    With magnetic resonance stean ignition on gas turbine upgrades- doubling the power output, with “aqueousfuel systems” avoiding
    fossil fuels, they could cost effectively provide 50% of German power generation needs with no nuclear or fossil fuels- except for the start ups. (excess power at night going to syn gas production and storage)

    Nord Stream II will not lock in so much investment as to exclude renewable. Take another case in point. Munich SWM, has a Europes largest, longest, and most intensively connected district heat system which it keeps expanding with the profits from combined heat power district heat. That is a several hundred million a year profit center.

    They use that to subsidize mass transit-subway, streetcar, bus operation in co-operation with Deutsch bahn commuter trains, plus
    continuously build out renewable energy sources which cut consumption and purchase of coal and natural gas fossil fuels. These include bio-gas installations, under-stream and floating on- stream, and run-of-river hydro-electric, solar photovoltaic, concentrated solar,
    , deep geothermal for power and the continued expansion and
    connection of district heat, on and off-shore wind parks. (two new
    parks on the North Sea in co-operation with Swedish state owned Vattenvall.)

    German investments in renewables and energy efficiency
    did not decrease with the fixed capital costs of the North
    Stream 1 which amortize themselves by the saved transit fees.

    Neither will North Stream II take away investment capital from the renewable sector. While Utilities such as EnB, and SWM-Stadtwerk
    Munchen are customers of Northstream and in the inland pipeline operators, they have their own set timetables for the transition.

    Renewables amortize by saving on fossil fuel purchases. Nord Stream I had no negative impacts on German renewables investment, and we can expect that neither will Nord Stream II. We can expect that Germany will continue its energy transition away from nuclear and fossil fuel power generation to a wide variety of renewables-at a general rate of about 5.2% per annum.

    • Grace Adams says

      Wow, Germany really has been very busy investing in more and more renewable energy and energy efficiency. I wish them all success in becoming 100% green power over the next ten to fifteen years.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>