Olaf Scholz And The Iberian Pipeline

While politicians in the UK begin to face up, with varying degrees of reluctance, to the prospect of imminently higher energy prices, and how the problem might be alleviated, if not averted, German Chancellor Olaf Scholz is facing up to the prospect of his country’s energy supply being severely curtailed, whatever the price, and despite all the warnings.

Now on the same page: German Chancellor Olaf Scholz ...

His country’s dependence on gas supplies from Russia had been known about, and his predecessors warned about, for some years, especially given the, shall we say, unpredictable behaviour of Vladimir Vladimirovich Putin and his gangsterist régime in the Kremlin. One way of alleviating that problem would have been to interconnect the French gas grid with that of Iberia.

This, with some strengthening of the pipeline grid between Portugal’s western Atlantic coast and north-west Spain, would enable liquified natural gas to be offloaded at the deep water port of Sines (that’s pronounced Sin-esh) and piped across Europe - rather faster than other permutations of sea routes and pipelines. But the Germans were not bothered. So the inevitable happened.

As energypost dot eu told back in 2016, “The French energy regulator has recently said that a long-awaited gas interconnector between Spain and France, which the European Commission says would help reduce Europe’s dependence on Russian gas, is not needed and too costly in the current market environment”. The Pyrenees were a barrier. Or were they?

“The Pyrenees, which are the natural border between France and Spain, were not a barrier to the railway system, even if Spain had decided to use a different gauge than the rest of Europe, for the unjustified fear that France would steal their hardware. Cars and trucks also go freely across the many highways that today crisscross the range between the Atlantic Ocean and the Mediterranean Sea. The boundary literally disappears”. Indeed.

Russia had made supply cut-off and restriction noises in the past; it had then failed to follow through, most likely because it needed the money. The country’s economy was increasingly dependent on extractive industries - in other words, oil and the by-products that came with it. Like gas.

... and António Costa, Prime Minister of Portugal

Also, the French regulator CRE appeared to be engaging in creative accounting: “It states that the cost of the pipeline would be around €3bn; but Enagas, the Spanish system operator, has reported that the capex for the 222 km to the French border, and on to Carcassone, would be a total of €471mn”. All the while, Germany sat on the sidelines. Until last week.

As CNN Portugal has reported, “[last] Thursday, the German chancellor [Olaf Scholz] asked for the construction of a gas pipeline from Portugal, passing through Spain and France, and reaching the centre of Europe to reduce energy dependence on Russian gas. António Costa [Prime Minister of Portugal] took less than 24 hours to say yes”. I’ll bet he did.

There was more: “[by] Friday, the Prime Minister guaranteed that the Portuguese route of the gas pipeline to the centre of Europe has already been defined, with the ‘work being very advanced’, and assured that the Iberian Peninsula can replace ‘a large part’ of gas imported from Russia”. The new pipeline would run from Celorico da Beira, crossing the Spanish border at Vilar de Frades, and continuing on to Zamora in north-west Spain.

Completion should be just 30 months away. The cost would be between €150 and €244 million, to which would be added the cost of the interconnecter between the Spanish and French gas grids. All of which shows which country needs to be on board to drive forward EU-wide projects (that answer could have included the UK, but our politicians think we’re above such things).

The German Chancellor has spoken. The French are no longer indifferent, making excuses, accounting creatively or objecting. A route to reducing European dependence on Russian gas will be opened up. And a lot of pundits are going to have to learn how to pronounce Sines correctly.

But British politicians need not worry. They no longer have any influence.

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