Above Photo: Senegalese President Macky Sall addresses a press conference with German Chancellor Olaf Scholz at the Palace of the Republic of Senegal on May 22. Seyllou / AFP / Getty Images.
Wealthy European Countries That Sought To Halt Funding Of Fossil Fuel Projects Across Africa Are Now Scrambling To Secure The Continent’s Oil And Gas.
Note: Russia is demanding payment for gas in rubles because the US stole (‘seized’) its assets. It is not trying to deprive Europeans of gas. Moon of Alabama explains the situation in more detail here.
It is interesting that the EU is experiencing what it is like to be on the other end of the weaponization of energy.
The EU is urging its member states to immediately start rationing natural gas, warning that Russia may further cut supplies. “Russia is blackmailing us. Russia is using energy as a weapon,” said the European Commission president, Ursula von der Leyen. https://t.co/0HEXi0gzTK
— The New York Times (@nytimes) July 20, 2022
Europe, one of the largest consumers of Russian gas, is scrambling to find African alternatives as Russia threatens to permanently turn off the taps.
Russia’s gas supply to Germany via the Nord Stream 1 pipeline was halted for routine maintenance last week, and there are concerns that Russia may not restart it. Moscow has already cut natural gas supplies to Poland, Finland, and Bulgaria, which refused Russia’s demand to pay in rubles. The Bavarian Industry Association forecasts that Germany could lose almost 13 percent of its economic performance in the latter half of this year if Russian gas stops flowing.
Facing an energy crisis, German Chancellor Olaf Scholz went to Senegal in May to pursue the development of a gas field that’s expected to open next year. European Union diplomats began talks with Nigerian officials in April, seeking to tap the country as an alternative gas supplier. Meanwhile, Italy has struck agreements with Algeria, Angola, and the Republic of Congo.
This month, Italian President Sergio Mattarella visited the Mozambican capital of Maputo to discuss energy collaboration. The Italian energy company Eni announced recently that its floating liquefied natural gas (LNG) plant off the coast of Mozambique’s insurgent-plagued Cabo Delgado province is expected to achieve its first LNG cargo in the second half of 2022.
As Europe scrambles for energy supplies, observers and Africans themselves are denouncing what they see as energy hypocrisy, considering that most African countries live under regular power shortages and are severely impacted by climate change. African governments have sought to develop new fossil fuel projects to meet local needs, but Western governments have demanded that multilateral lenders such as the World Bank stop funding those projects to reduce global carbon emissions.
“Our countries cannot achieve an energy transition and abandon the polluting patterns of the industrialized countries without a viable, fair, and equitable alternative,” Senegalese President Macky Sall said in a defiant speech at last year’s meeting of the U.N. General Assembly. “Stopping funding for the gas sector … would be a major obstacle.”
A report released last week suggests some African countries will have to cut public spending elsewhere to meet the cost of adapting to a warming planet, which will eclipse their spending on health care. The entire continent is responsible for just 3 percent of global carbon emissions. That figure is far lower when coal-intensive South Africa, the biggest carbon emitter in Africa, is excluded. The average European uses more than six times as much electricity as the average African consumer.
Nigerian Vice President Yemi Osinbajo in a recent op-ed in the Economist called out Europe for its insistence that poorer nations freeze their carbon emissions, which richer countries in real terms have not committed to doing, “because of a naive belief in leapfrogging, the assumption that, like skipping landlines for mobile phones, Africa can ‘leap’ to new energy technologies.” African leaders say those requests amount to a wish to keep the continent poor.
One argument against fossil fuel-dependent industrialization is South Africa, where scheduled power cuts, known as “load-shedding,” could rise tenfold by 2026 unless the country adds renewable energy sources, according to a study by Meridian Economics. The state-owned utility Eskom, whose aging coal plants have become unreliable, supplies 90 percent of the country’s energy. At the U.N. COP26 climate conference last year, Western nations pledged $8.5 billion to help the country transfer to greener energy.
But in the immediate term, Verner Ayukegba, a senior vice president at the Johannesburg-based African Energy Chamber, points out that South Africa should be exploring a whole mix of energy sources, including gas, because while greener sources are important, it is those living with lights on in New York or London who have the luxury of thinking about renewable energy. “If you are in a maternity ward in a hospital in the outskirts of Maiduguri [in northern Nigeria], it really doesn’t matter if your hospital is powered using coal. … What you need is power,” he said.
Despite Nigeria being Africa’s second-largest oil producer, 85 million Nigerians—almost half of the country’s population—live without grid electricity. Nigeria has the largest known gas reserves in Africa and, due to Russia’s invasion of Ukraine, has seen the revival of stalled projects such as the trans-Saharan gas pipeline, which would run through northern Nigeria to Niger and Algeria and then on to Europe.
Ayukegba argues that African governments need to focus on infrastructure investments for local rather than European and Asian markets. He noted that because the Russia-Ukraine war pushed oil prices, which had been originally forecast at $50-$70 per barrel, above $120 a barrel, Nigeria made significant unexpected profits this year, which he argues should go toward infrastructure investments for local electricity needs.
“One thing which we need to start looking at is, what is the Senegalese demand for power going to be? What is the regional African demand for power going to be?” he told Foreign Policy. “We should be looking at ourselves and saying, what are the priorities that we want to spend if we want to develop power capacity on the continent?”
Ayukegba envisioned an agreement like that which created the African Continental Free Trade Area with “a bigger focus in that sense on investment rather than just on trade.” For example, the African Export-Import Bank recently signed a memorandum of understanding with the African Petroleum Producers’ Organization with the aim of creating an energy bank to support new and existing oil and gas projects.
As it stands, North African countries are the only ones in a position to immediately benefit from an increase in European gas deals. On Monday, Italian Prime Minister Mario Draghi arrived in Algeria to sign an agreement that aims to secure additional gas supplies for Italy.