The natural gas supply situation is very unstable around the world. If its relations with Algeria continue to deteriorate, Spain could lose an offer it still depends on
A few weeks ago, Algeria suspended the Treaty of Friendship and Cooperation with Spain in response to the Copernican turn of Spain’s stance on Western Sahara. This measure has been accompanied by others, such as the ban on direct debits in Algeria for trade with Spain, which has mainly affected SMEs, but not natural gas trade, whose payments are made through an international system. So the first concern that jumped to the front pages of the papers was raised, and the passing of the days shows that Algeria has indeed not cut off its natural gas supply to Spain at the moment.
for now Because the current situation regarding the supply of gas and other natural energy sources is extremely fluid. And unstable.
Gas extraction in Algeria has been virtually at a standstill for 20 years. No surprise: resources are finite and cannot be mined at a constant rate, they flow less when there is less left.
After decades of producing more each year than the previous one, a more or less long phase of production stagnation is always reached, which is finally followed by a gradual decline that usually lasts for many years. That happens with gas, oil, coal, oil, copper…everything. And it happens in all countries.
Algeria is here now: since 2000, between 80 and 90 billion cubic meters per year has stagnated. But consumption has been growing rapidly since 2010 and therefore has less and less gas to export: from 57 Mm³/a in 2,000 to 39 Mm³/y in 2021, 30% less. That is why Algeria was interested in closing the gas pipeline that runs through Morocco last September: why pay 7% toll if you have less to export? It’s better to send what’s left directly to the highest paying customers. But production is already in the phase of downturn and final decline, so now it is convenient for him to export less to Spain and focus on Italy -because it gives him more payment guarantees and fewer problems-.
Spain, which concentrates 38% of the regasification capacity of the entire European Union in 6 ports, has switched to liquefied natural gas (LNG) which is mainly exported via methane tanker by the US, Qatar and Australia. This has enabled it to offset the gradual decline observed in recent months (long before the current conflict) in gas coming from Algeria: we currently import more gas from the US than from Algeria. But that doesn’t mean we can’t do without the North African country: even now, 25% of the gas we consume comes from Algeria.
It makes little sense to think that Spain can become a strategic center for the distribution of energy and gas to Europe, mainly because it will never be able to produce an amount of final energy comparable to what we currently consume, let stand exporting, with native (renewable) resources. And as for the re-export of natural gas to Europe, all the LNG exported in the world is not enough to supply Europe, so it will be difficult for Spain to redistribute a sufficient amount to our northern neighbors, how much it invests in infrastructure.
But it is also that the world is starting to become very honest about natural gas. There are countries that have run out of natural gas, such as Pakistan.
Australia, the third largest exporter of LNG, is suffering power outages due to the rise in the price of all energy commodities and has already imposed an embargo on coal exports, which could eventually expand to LNG.
Qatar has many long-term contracts that it cannot break. The US, for its part, recently suffered an explosion at the liquefaction plant in Freeport, Texas, which caused it to lose 20% of its LNG export capacity until at least 2023. A very easy accident, as gas prices shot up in the US, and now, thanks to the accident, they have fallen. Still, power outages are expected in the state of Illinois and likely other central states this summer, precisely because of the additional cost of power generation. Globalization is spreading energy prices, and the problems of accessing them, across all countries.
Spain should therefore think carefully about its next steps regarding Algeria, as it still depends on it and because its other suppliers may be less reliable than expected in the global power supply situation.
The decision to pump gas to Morocco through the now-idle Maghreb-Europe gas pipeline could be interpreted as an attack by Algeria, as it explicitly banned it from re-exporting its gas to the eternal rival Alawite kingdom.
The recent military maneuvers in which Morocco and the US have participated in anticipation of war with Algeria are extremely alarming. It is worrying that such a scenario is being achieved, morally objectionable, but also useless from the point of view of guaranteeing access to resources.
Let’s hope our rulers act wisely, for we are hanging by a thread. A thin wire. A gas wire.
This article was published in ‘The conversation
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
