On March 5, just as Russia had invaded Ukraine, Ursula von der Leyen made a mistake – which wasn’t one: “The EU needs to get rid of its dependency on fossil fuels,” tweeted the EU Commission President, concerned that Russia could damage Europe turn off the gas tap and praised that “Spain is a pioneer with its high share of renewable energies and LNG capacities”.
The problem: LNG, so-called liquid gas, is also a fossil gas. It is pumped out of the ground, partly fracked and finally burned in a way that destroys the climate. This is also known from the Leyen. Nevertheless, the inventor of the European Green Deal, with which the continent is supposed to decarbonize itself, keeps mixing the topic of LNG with the topic of renewable energies.
This climate fib could still be expensive for Europe – ecologically and financially. Because infrastructure, in which Europe is investing billions, will soon become useless or much more expensive if the EU does not want to further exacerbate the climate crisis.
The largest gas consumer in Europe is Germany, followed by Italy, the Netherlands, Slovakia and France, according to Eurostat. These countries in particular are trying to replace their gas imports from Russia with supplies from other sources.
“Since the war began, LNG exports to Europe have increased by 58 percent,” says Paula Di Mattia Peraire, gas analyst for the Independent Commodity Intelligence Service (ICIS). Germany, Greece and Italy in particular, but also Ireland, France, the Netherlands and Poland are expanding their coastal infrastructure.
“There is currently a lot of investment in LNG in Europe,” says analyst Peraire from ICIS. “If all these projects are realized – we are talking about 15 new ones by the end of 2024 – the regasification capacity will increase by 70 billion cubic meters per year.”
A particularly large amount of state money is currently flowing into coastal terminals, where the cooled liquid gas is unloaded and heated until it is fed back into the pipeline network in gaseous form. There are currently too few available – especially in the North and Baltic Seas – to cover Europe’s gas needs.
However, there is not just one, but two other bottlenecks in the import of gas in addition to the terminals.
If Russian pipeline gas is to be replaced, gas from other sources must first be shipped to Europe in tankers. These LNG tankers, easily recognizable by the typical spherical tanks, hold up to 175,000 cubic meters of liquid gas, which corresponds to 90 million cubic meters of less dense pipeline gas. To replace the annual 167 billion cubic meters of Russian gas, around 1,800 shiploads are needed for Europe – or five per day.
According to the Institute for Shipping Economics and Logistics, this would require 160 new tankers. At a unit price of 220 million US dollars, an investment of 35 billion US dollars.
In addition, in future LNG gas will have to flow from Spain, France and the Netherlands to Central and Eastern Europe, instead of from East to West as has been the case up to now. However, since long-distance gas pipelines are mostly one-way streets, a “reverse flow” is only possible to a limited extent. According to the Fraunhofer Institute, the current German capacities, which are central to Europe, would have to be at least doubled.
All of this is in stark contrast to the EU’s climate goals. The block wants to become climate-neutral by 2050, Germany from 2045. If the EU burns more LNG, emissions will increase.
“We have a climate emergency,” says energy expert Ganna Gladkykh at the European Energy Research Alliance (EERA). “Even the IEA says there should be no investment in fossil fuels from now on. Only then can we achieve the climate goals.” Nevertheless, the EU is now investing billions in gas infrastructure. “It makes no sense to invest in LNG, especially in Europe.”
Gases that are produced in a climate-friendly manner are intended to solve the problem. Instead of fossil natural gas, ammonia and above all liquid hydrogen are to be processed in a few years. Only then could the otherwise useless tankers, terminals and transit lines continue to be used – at least that is the hope.
But Gladkykh has doubts about the changeover. “Politicians say the infrastructure is ready for hydrogen to reassure the public. The story that decision makers are selling is that while we are investing in fossil LNG, those investments will not go to waste if we switch to greener hydrogen technology.”
“However, the conversion has not been clarified,” says Rainer Quitzow, research group leader at the Potsdam Institute for Transformative Sustainability Research (IASS). Hydrogen will not even be shipped today, 2022.” According to Quitzow, other alloys and materials are needed for this, because hydrogen is more explosive and therefore more dangerous: “It will require significant additional investments.”
The International Renewable Energy Agency estimates the additional cost of replacing pumps, valves, instruments and safety systems at up to 20 percent of an LNG plant. Hydrogen has to be cooled down by a further 100 degrees than LNG, which is already at minus 160 degrees. The current LNG tankers and terminals could not be used for this.
In addition, all hydrogen must first be produced sustainably by wind power or solar energy and transported to Europe. Because to quench Europe’s thirst for energy for hydrogen, solar and wind energy in this country is not enough.
“In view of all this, I would say that it is an overinvestment,” Gladkykh criticized the European and especially the German energy policy. IASS expert Quitzow also sees “a risk if we build infrastructure that does not make sense if we want to achieve our climate goals.” However, he suspects that “once you have terminals and facilities, it will be difficult to get away precisely because you have invested heavily”. The planet would lose out.
But the climate damage is already increasing: in principle, the production of conventional, for example Russian, natural gas releases fewer emissions than fracking. Unlike Russian pipeline gas, gas from Qatar or the USA must first be liquefied in order to be transportable. To do this, the gas is strongly compressed by pressure and then “relaxed” again, cooling down each time. Eight to 25 percent of the energy yield is lost through the operation of the compressors.
In the end, the fuel still has to be shipped across the world’s oceans. The longer the route, the worse the climate balance. For example, gas from Australia would have “climate transport costs” five times higher than gas from Algeria.
But not only the EU is plagued by problems in the LNG economy: Russia would also like to liquefy and sell its gas. But even in the event of a quick end to the Russian invasion of Ukraine, Russia’s share of the European gas market is likely to decrease for political reasons. As a result, the country has to largely write off its multi-billion dollar pipeline infrastructure towards Europe. In addition, the need for liquefaction plants and terminals in Russia is increasing in order to find buyers outside of Europe, especially in China and Japan.
However, experts doubt whether Russia can muster the necessary technology without help from the West. As a result of the sanctions, most western partners gave up their cooperation with Russia.
But the future of the new EU LNG plants is also being discussed. In two reports by European think tanks such as the German Agora Energiewende and E3G, scientists calculate how Europe could reduce its gas requirements within “one to four years” and become independent of Russia. 20 percent could be replaced by implementing the EU Commission’s “Fit for 55” plan. Another 45 percent could be achieved through heat pumps, insulation and an expansion of green energies. Only a third still has to be imported from other countries. The existing infrastructure is sufficient for these 50 billion cubic meters of gas.
The scientists receive support from the highest level. At the Economist Sustainability Summit, UN Secretary-General António Guterres called fossil fuels “a bad investment that results in billions of dollars in worthless assets.” Countries must “accelerate the phase-out of coal and all fossil fuels,” said the Secretary-General. Anything else is insane. Dependence on fossil fuels is mutually assured destruction.”
Author: Michel Penke, Julia Merk
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The original of this post “A lot of money for nothing?” comes from Deutsche Welle.
