How could Africa become an alternative energy supplier for Europe?

As Europe struggles with an energy crisis and prepares for winter, Africa could be a source of energy security.

The European Council decided in May 2022 to ban more than 90 percent of all Russian oil imports by the end of 2022, with a temporary exception for crude oil delivered by pipeline. This was part of a sixth EU sanctions package. It followed a ban on Russian coal.

With less than six months to go before winter, it is more important than ever for European nations to find alternatives to Russian energy imports.

THE ENERGY SECURITY CRISIS IN EUROPE

In May, Ukraine suspended a gas transit route to Europe, citing the intervention of Russian occupation forces. The country stopped delivering gas to many European countries after it refused to comply with a new payment rule.

In June, Kremlin-controlled energy giant Gazprom reduced its gas exports via Nord Stream 1 to 40% of capacity, blaming delays in the return of a turbine that Siemens Energy was repairing in Canada. Nord Stream 1 was only supplying gas at 20% of its capacity at the end of July. Siemens Energy and the German government say the returned turbine is ready and waiting to be deployed.

In late July, EU energy ministers agreed to cut natural gas consumption by 15 per cent over the winter to avoid an energy crisis, fuelled by fears that Russia could potentially cut off all gas supplies to the Union. A race against time is underway to replenish gas supplies before winter.

Germany has activated the second stage of its emergency gas plan, and the country's economy minister, Robert Habeck, has warned that if Russian supplies remain as low as they are today, Germany will face a gas shortage, forcing businesses to close this winter.

According to a recent German poll, 58% of the population currently supports sanctions against Russia, despite the potential negative consequences for Germany. Russian President Vladimir Putin aims to reduce this number to the point where it becomes untenable for German leaders to advocate for policies that help Ukraine.

ALTERNATIVE GAS SOURCES

European countries are looking around the world for alternative sources of gas to reduce their overwhelming and increasingly troubling dependence on Russian gas, particularly Gazprom. Norway, Europe's second largest supplier after Russia, is already exporting at full volume. There have been new political agreements for more liquefied natural gas (LNG) from the United States and neighboring states such as Azerbaijan and Qatar, as it is one of the main suppliers.

"The energy relationship between the EU and Russia has undergone a sea change," says Raj Shekhar, oil and gas analyst at GlobalData.

"The War has shaken Europe's relationship with Russia and therefore forces us to look for other alternatives. Europe is trying to prepare to make arrangements for floating storage and regasification units [LNG]," he noted.

He added that this could be advantageous to the U.S. in the short term. "North American-based LNG projects, particularly on the East Coast, have suddenly begun to attract a lot of interest as suppliers to continental Europe," he said.

However, while additional LNG imports could temporarily fill a gap, analysts believe there is not enough LNG to cover all of Europe's energy needs, with Russia exporting about 72% of its natural gas to Europe.

According to documents from The GuardianAfrican leaders are likely to use the upcoming UN climate summit, COP27, in November to push for substantial new investments in fossil fuel resource development in Africa.

Rising gas prices have made the potential of African supplies even more attractive to their owners. Wealthier countries, including EU members, have signaled that they could support such developments in the context of the current gas shortage.

AFRICAN OIL AND GAS IMPORTS TO EUROPE

Several African countries have emerged as potential sources of additional gas supply for Europe. Mozambique, for example, is one of the most attractive LNG prospects in the world. Mozambique's National Hydrocarbons Company has recognized that it could help meet Europe's increased gas needs.

Mozambique's National Petroleum Institute sees the potential for 14,000 new jobs in four key gas extraction projects already underway that could generate gas supplies for Europe. But there are obstacles. These LNG projects involve the construction of gas liquefaction units on the Afungi Peninsula in the district of Palma, a town on the northeast coast of Mozambique. However, this work is currently at a standstill, with no clear timetable for the resumption of operations, due to attacks by Islamist terrorists.

Matthew Baldwin, deputy director general of the European Commission's energy department, said the EU is also seeking additional gas supplies from Nigeria. However, as in Mozambique, domestic threats may hamper production. Oil and gas production in Nigeria is being stifled by pipeline theft and vandalism; Nigeria LNG's Bonny Island facility is currently operating at 60% capacity.

"If we can get Bonny Island above 80%, there could be additional LNG available for future spot cargoes in Europe," Baldwin said.

ENERGY SECURITY AND NET ZERO

For years, new field development and pipeline construction projects have been hampered by the reluctance of Western banks and governments to finance new fossil fuel projects as the fight against carbon emissions has intensified.

Today, Europe, which previously advised African countries to focus on renewable energy and leave oil and gas in the ground, is demanding more gas.

Yet recent extreme weather conditions, such as heat waves and forest fires in Europe and North America, are also fueling fears that the climate catastrophe is worsening faster than expected. African countries are likely to be among the hardest hit by climate change. Drought is already affecting much of the Horn of Africa, and millions of people are "walking toward starvation," according to the World Food Programme.

Mohamed Adow, director of the think tank Power Shift Africa, says Africa would be making a mistake if it chose to prioritize fossil fuels over renewables for investment. "Africa is endowed with abundant renewable energy in the sun and wind," he said. "Africa should not be chained to expensive fossil fuels for decades."

Yet soaring gas prices are leading many African governments to view untapped African fields as a possible gold mine, regardless of the environmental consequences.

African environmentalists fear that the continent's gas-rich states will fall into the trap of stranded assets. European governments will have to counter this fear and show a willingness to invest in countries like Nigeria, Senegal, Angola, Equatorial Guinea and Mozambique to monetize their resources.