Energy security: challenges and priorities in the Mediterranean (Part 3)

Challenges and priorities

Very relevant issues stand out from this analysis which draws the attention especially on four main aspects. They provide a key to assess and sketch the prospective of the energy security in the Mediterranean basin, but they also represent, at the same time, priorities and challenges.

‘Regenerating’ Euro-Mediterranean cooperation

The EU’s approach to energy cooperation in the Mediterranean has always entailed a projection of the EU’s norms. “Market liberalization is considered the most potent negotiation tool in international energy interactions. By purportedly opening up its own market, the EU hopes to gain greater investment access in third producer countries and undercut the perceived perilous implications of bilateral deals between member states and Europe’s handful of main energy suppliers. […] Finally, a rule-based approach to energy co-operation is for the EU a way of contributing to the erection of well-functioning world energy markets and enticing other global powers away from geostrategic deal-making propensities” (Darbouche, 2011).

Nevertheless, the Europeanization strategy of exporting EU energy regulations to Mediterranean producers as a means of modernization and security of supplies has been by the way plagued with difficulties. One of the most critical objections to that strategy regards the possible inconsistencies in stated goals, e.g. between securing access to hydrocarbon supplies and the spreading of democracy and Human right, given the complex situations affecting those producing and transit countries before and after the Arab spring (Escribano, 2010).

Furthermore, North African exporting countries have not been very keen on accepting the EU regulatory-norm-based model as the pivot of the cooperation. This is due to the fact that those regulations and norms proposed within the EU framework add little value to the existing bilateral agreements stipulated on the basis of more strategic advantages for the exporting countries.

Lastly, EU energy policy has been considered inconsistent as long as MSs commitment remains elusive. The resistance to the liberalized internal European energy market from member states like Germany, France and Italy in relation to the ‘unbundling’ of the production and distribution segments of European energy holders is an evidence of the inconsistency of the European energy policy (Darbouche, 2011).

On the other hand, the UfM seems to have avoided emphasizing the role of the norms, in order to focus on shared practical interests, abandoning any region-building process in favour of a limited neo-functionalist process.

Lacking any political progress within the framework of the UfM, the interest in the MSP seems to have taken advantage of the shifting in energy interests owing to issues related to climate change, energy security and growing energy requirement rather than of the success of the EU’s new Mediterranean policy.

Then, the exporting countries have begun to recognize that the domestic requirements of their economies are growing stunningly. Consequently, MSP appears to be an opportunity for those countries, helpful to satisfy the increasing demand and at the same time, earmarking more fossil fuel for exports.

The UfM has given a new focus to neo-functionalism whose emphasis on the development of regional solar energy projects, rather than on the rule-based cooperation model, has definitely been more successful among the Southern rim countries.

Energy transits through the Mediterranean – diversification

In each side of the Mediterranean, pipeline projects have increased rapidly during the last decades. Turkey, which has progressively aligned its energy policy to the EU, inevitably has a relevant geopolitical importance in this game, since it is becoming an energy hub in the Eastern Mediterranean (Escribano, 2010).

Its proximity with oil rich Iraq makes its Mediterranean port of Ceyhan the primary harbor through which Iraq’s northern oil exports pass. Furthermore, for that oil arriving from Russia, the Caspian and the Caucasus region, the Samsun–Ceyhan pipeline has been planned in order to provide an alternative route to ease the traffic burden in the Bosporus and the Dardanelles. Ceyhan is also the terminal point of the Baku–Tbilisi–Ceyhan (BTC) pipeline, a 1,768 kilometres long crude oil pipeline from the Azeri-Chirag-Guneshli oil field in the Caspian Sea to the Mediterranean Sea.

Concerning natural gas, the Nabucco pipeline was expected to be operational from 2018 to carry gas from Turkey through Bulgaria, Romania and Hungary to Austria, but it was rejected last year in favour of the Trans Adriatic Pipeline. The latter is a pipeline project to transport natural gas from the Caspian sea (Azerbaijan), starting from Greece via Albania and the Adriatic Sea to Italy and further to Western Europe. The pipeline starts at the Greece–Turkey border at Kipoi, Evros, where it will be connected with the Trans-Anatolian gas pipeline. Since it does not pass via Russian territory, it will dwindle EU energy dependence on Russia as well as vary gas supply routes.

Moreover, a Syria-Turkey connection has been projected to be integrated with the Arab Gas Pipeline which delivers Egyptian natural gas to Jordan, Syria and Israel. Through this connection could be possible to deliver Egyptian gas via Turkey into western Europe through the Trans Adriatic Pipeline.

Egypt as well, is an important country in the Mediterranean. The Suez Canal makes it unique in terms of energy transits. However, the trend towards very large crude carriers has cut down the strategic importance of this chokepoint, because of the dimensions of those carriers. Although the region keeps its relevance on account of the Suez-Mediterranean crude oil pipeline, the role of Algeria should be deemed as far more significant for the EU than Egypt in energy terms.

Algerian natural gas has traditionally been shipped to Europe through two important pipelines: the Maghreb–Europe Gas Pipeline (MEG), which links the Hassi R’mel field in Algeria through Morocco with Cordoba in Andalusia, Spain, where it is connected with the Spanish and Portuguese gas grids, and the Trans-Mediterranean Pipeline (TransMed or Enrico Mattei gas pipeline) from Algeria via Tunisia to Sicily.

Another important natural gas pipeline is the Greenstream which links Libya to Sicily, even though Libyan gas flows to Italy halted for seven months in 2011 and for about a week in November 2013, when protesters attacked the Mellitah oil and natural gas station 80 km west of Tripoli. Russia’s Gazprom boosted supplies to Italy during the November cut-off.

Today, the situation in Libya is still puzzled. Damages to crucial infrastructures, such as Tripoli airport and one of the largest Libya’s fuel storage depot, are symptoms of a deteriorating security situation which implies a greater risk to oil and gas infrastructures.

Ultimately, MENA countries play a key role in the energy security of the Mediterranean region, even in a ‘green energy’ perspective for a further diversification.

Diversification projects are necessary and useful in terms of future investment as they can be considered as a tool to avoid overdependence on a handful of suppliers.

 

Meaning of the current developments for energy security in the Mediterranean – Stability

Syria, Iraq, Israel, the Palestinian Territories and Libya. Each with its distinctive crisis, but all unified by confusion and anxiety as years of conflict go by. The events that took place in the Arab world in the opening months of 2011 mark a watershed in the history of the MENA region. By the way, the final outcome is unknown yet and the long-term effects of the transformation process are highly uncertain.

Given the importance of MENA energy supplies, the political unrest witnessed by the region has provoked widespread fears about the prospect of energy supply disruptions.

In terms of oil market dynamic, events in Libya resulted in the first oil supply disruption since the outbreak of the uprising in Tunisia. It caused a sharp rise in the oil price. In the case of Libya, the challenges are immense. In addition to the daunting task of rebuilding the damaged oil fields and oil installations, a major challenge is to create a new political structure and new functioning institutions that will enable it to govern the country and provide political stability and security to the Libyan people and to foreign operators.

The continued threat of attacks to oil infrastructure in Libya, Yemen, the embargo on Syria, increase uncertainty and volatility, causing a damage to the oil market (Darbouche et al., 2011).

As already said, one of the most striking features of the region has been the rapid increase in domestic consumption of petroleum products. This rapid growth in consumption can be explained by many factors, including expanding populations, industrialization policies and a policy of provision of energy at cheap prices to local consumers.

The reason of this policy changes depending on the country. Cheap energy prices are seen as essential to attract foreign direct investment, to promote industrialization, to create job opportunities and prestige.

While such a policy has helped MENA governments achieve some of their objectives, it has placed serious strains on government finances, especially in resource-poor countries. Such a policy has also created distortions, resulting in misallocation of resources and in the ‘over-use’ of the subsidized good. The Arab uprising delays any plans of energy pricing reform and subsequently, the opportunity to contain the growth of oil consumption in the region.

The Egyptians, shocked by the revolution and the counter-revolution, live again under an army-supported government, on the path carved out by the republican tradition so far.

Since energy security requires long term planning, instability is harmful, especially for renewable energy installations. 

Anyway, the atmosphere of unsteadiness is not confined to the Southern and Eastern  Mediterranean. The Euro-zone is experienced a deep economic crisis and countries like Greece, Portugal, Spain and Italy are still in difficult waters. The economic crisis has subsequently curbed the margin to manoeuvre for financing cooperation projects in energy sector, especially, in the research field.  

 

Sustainability

Two interrelated factors stands out in this paper, concerning with the Southern Mediterranean countries’ energy security: the expectation of a growing energy demand and the need of a higher energy consumption to develop the economic system and to produce wealth. As a result, on the one hand it will be critical for those countries to guarantee energy supplies and, on the other, it would imply an intensive exploitation of the current fuel fossil energy sources. How can this model be considered sustainable in the future?

Above all, the prospect of exhaustion of fossil fuel reserves, especially of oil, is ever more concrete in the mid-term, and the growing energy demand, resulting from the high population and economic growth rate but even from inefficient consumption trend supported by the already mentioned ‘cheap price’ policies, have driven Southern Mediterranean countries to recognize the significance of the MSP in terms of diversification of their economy, development of internal green energy industries, attraction of external investments.

The problem with this plan is that it seems to be very expensive. Public funds, private funding and international financial institutions will unavoidably have a crucial part in the financing of the project.

The MSP definitely shows its enormous potential in addressing challenges like energy security, economic diversification and climate change. Mediterranean Solar Plan stresses the role that energy sector restructuring may have on improving generation capacity for both energy self-sufficiency and energy exchange between the two shores of the Mediterranean Sea.

The other side of the coin discloses obstacles which only a stronger commitment in the Euro-Mediterranean cooperation could overtake.

The current framework of cooperation, the UfM, may favour overcoming member states’ different interests and the persistence of national sovereignty in energy supply decisions by focusing on functional integration at the level of sectorial issues of cooperation (Cambini et al., 2013).

MSP could contribute to put forward a sustainable energy security model but the question concerns whether the economic and political actors are willing and capable of bearing the burden of this sustainability.

 

 

REFERENCES:

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WEBLIOGRAPHY:

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