Energy: An EU vision for relations with North Africa

Francesco Sassi

6 mins - 23 de Diciembre de 2022, 07:10

During the first winter of a global energy crisis, Europe finds itself at the epicentre of a dynamic that will have repercussions extending far beyond its borders. The combination of the Russia-Ukraine conflict with the transformation of the global energy order is rapidly reshaping energy interdependencies, rattling European governments out of their conformist apathy.

This dynamic, which intertwines energy security, industrial and monetary policies, socio-economic conflicts and ambitious energy transition goals, is creating strategic dilemmas of no small magnitude for European governments on the Mediterranean. In Spain, France and Italy, countries with very different political and energy systems, policymakers are now called upon to construct a common vision on energy, and not exclusively with neighbouring North Africa.

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Cooperation or national interest? This is the choice facing all European governmental heads. A turning point certainly dictated by the conflictive relations between Europe and Russia over the Ukrainian question. A situation that calls into question the traditional model of energy cooperation between member states. The same is true of relations between European states and their neighbours. From the Middle East to the riches of the Arctic seabed, along with those produced by the US shale revolution, the abundance of gas reserves in Algeria and Libya and the potential in terms of renewable energy generation present throughout the Maghreb.

It is regarding this region in particular that many of the hopes of Madrid, Paris and Rome have been focused, triggering a waltz of energy diplomacy, the likes of which has not been seen in decades. European governments, Italy above all, have signed new bilateral agreements to increase natural gas imports.

And not only that. Recently, Italy's Terna and Tunisia's Société tunisienne de l'électricité et du gaz (STEG) received a grant of some 300 million euros for the construction and commissioning of a 600 MW high-voltage cable between Sicily and Tunisia— an infrastructure that represents a primus. In fact, it is the first time that the Connecting Europe Facility (CEF) involves a Member State and a third country. The cable is expected to transport electricity production from renewable sources from Tunisia and Libya to Italy and the EU market.

So far, so good. However, the announcement comes almost two decades after the presentation and 15 decades after the signing of bilateral agreements between Italy and Tunisia. In addition, the cable will have a significantly reduced capacity compared to what was initially proposed, due to the decrease in electricity demand in Italy after the economic crisis of 2011.

Cooperation with the neighbourhood, yes, but very slowly. Likewise in the current phase, Mediterranean Africa is increasingly unstable. Tunisia is on the brink of a political crisis with dramatic implications, a president whose legitimacy is sinking, also after the last round of elections, and a financial and economic situation close to collapse, with food prices intensifying rampant poverty. Not to mention neighbouring Libya, which has been mired in civil conflict for more than ten years and is now an unreliable energy partner. The scenario does not bode well for a green energy revolution in this corner of Africa.

Further west, Algeria has become the centre of gas diplomacy in the western Mediterranean. After years of neglect, its reserves have become the reservoir from which to replenish gas stocks in the absence of Russian imports. Rome has rushed to conclude new agreements that will make Algeria Italy's first supplier by 2022. Not only that, Algeria is also looking towards Italy as a transit country to reach other Central and Eastern European markets, or maybe even Germany.

This is not because Algeria has produced much more gas, but because part of the flows have shifted from west to east, i.e. from Spain and Morocco, to Italy. Like other countries, the Algerian government has also tried to limit domestic consumption by allocating more to exports.

Natural gas is produced neither by intergovernmental memoranda of understanding nor by press statements. Algeria's oil and gas sector has been suffering from a lack of investment for many years and, while the ageing of existing fields reduces their productivity, export infrastructure is not fully utilised. This is the case of the gas pipelines to Spain and Italy and the LNG terminals.

From a technical point of view, Algerian President Tebboune's recent statements on doubling gas exports by 2023 are perplexing. If, on the other hand, one looks at the more political side, gas reserves are now a weapon of mass seduction, especially in Europe, attracting potential investors (Italy's ENI has deepened its investments in Algeria in 2022) and appealing to governments to facilitate international demands.

The Western Sahara issue remains a prism through which both Rabat and Algiers view their relations with Europe. A game played in the skin of the indigenous peoples and local demands for independence. But while in Europe, the governments in Madrid, Paris and Berlin now strongly support Morocco's position, Rome remains at this moment the only major country that remains in favour of the UN resolution plan. An attitude that is unlikely to change, given the costs it could have in terms of energy security for a country that until recently was heavily dependent on Russian gas.

North Africa represents both an opportunity and a challenge for Europe, which looks for both neighbourhood stability and resources for a reliable energy transition. Energy, however, is also a political tool that this phase of international turbulence has proven to be even more effective and useful. Today, in order to overcome national interests and historical and cultural oppositions, it is necessary to dose the correct diplomacy and capitalise on the potential of energy resources to build a truly communitarian vision of relations between Europe and North Africa.

The crisis has shown how Europe has largely underestimated the potential of energy as an instrument of influence and, in the era in which we live, the gaps left by Brussels and national governments will be filled by other actors, China and Russia above all.
Read the article in Spanish here.

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