Energy policy causes gas leak

2 mins read

Now the football season is coming to a close with a few finals left to be decided in Europe; nothing is more entertaining than the government trying to sell its shiny new energy policy.

The government’s repackaged strategy looks good on paper, but like Chelsea’s season, it promises much but delivers bad results and little return on your investment.

This week, a workshop was held in Nicosia to get feedback from investors and industry experts on how Cyprus can best utilise its energy wealth.

Cyprus has long branded its energy card like a high-stakes roller at a poker tournament, bluffing as if it has the aces to trump everything else.

Surely it has a winning hand with so many oil and gas majors swarming around the island’s exclusive economic zone, hoping to strike it rich.

There have been encouraging finds touted as the next big thing in the East Med, but the first gas discovery was 12 years ago (Aphrodite), and the natural gas has remained firmly under water.

So, while Nicosia heralds itself as Europe’s answer to energy security, it has no gas in the tank ready for supply.

And nobody is really asking the government what happened to previous plans to import gas before we start producing our own.

We should already be using gas as a cleaner alternative to diesel-fired power stations that are costing the taxpayers millions in fines for polluting the atmosphere.

Natural gas is supposed to be a transitional fuel bridging the gap until Europe gets comfortable with renewable energy sources.

When Cyprus becomes a gas importer and exporter, it should be time for it to be phased out under the green master plan to save the planet from climate disaster.

Under a new policy strategy, authorities want to transport gas via pipeline from fields in the eastern Mediterranean to Cyprus for domestic conventional power generation, with an additional LNG facility to process for European markets.

Energy Minister George Papanastasiou said the companies operating in Cyprus and the Israeli EEZ “have the know-how to help us with our strategy”.

Big hitters

He also had to publicly dismiss unkind reports that big hitters attending the workshop smashed the government’s ideas into the long grass.

The minister declared that Cyprus’ strategy coincided with the thinking of energy firms to have cheap electricity via a low-cost natural gas pipeline from Israel.

Papanastasiou will travel to Israel this month to draft a deal for constructing a pipeline and LNG plant costing in the region of €1.5 bln.

But the companies operating Aphrodite natural gas field want to connect it to an existing processing and production facility in Egypt via a subsea pipeline.

Chevron, Shell and Israel’s NewMed Energy submitted a development plan for government approval.

US firm Chevron expects the new plan to lower the estimated development costs and bring forward the production start of natural gas from the reservoir by using existing infrastructures in Egypt.

The original development plan would have involved the construction of a floating independent production facility near the Aphrodite reservoir.

This isn’t going to happen, and now the government has some number crunching to do because – if its gas ever comes out of the ground – it is going in different directions.

Despite the government championing cheap electricity for the mass, it is coming up against corporate greed and profit margins.

I’m not buying the story that huge corporations are falling over each other to sink millions into a pipeline to give Cyprus cheap gas.

Not unless they are selling our gas back to us and can skim off enough to sell to Europe.

Cyprus holds the hydrocarbon licenses, but geopolitics and economic fundamentals will decide what happens next.

Critics would argue these scenarios are so last century when the climate clock is ticking.

And who’s to say that Turkey might decide to spoil the party and blow the pipeline out of the water?

It’s a possibility that can’t be ruled out, but Ankara will throw a few dummy grenades before it gets to that point.