Coal Increasingly Seen As Option For European Energy Security

  • Date: 28/04/14
  • Nick Cunningham, Oil Price News

For a continent that is sceptical of fracking, turning away from nuclear, and looking to replace Russian gas, coal may end up having a longer shelf life than those hoping to address climate change previously thought.

 

The crisis in Ukraine has thrust energy security to the top of the agenda in European capitals. With Russia accounting for almost one-third of Europe’s natural gas, the prospect of the conflict escalating has stoked fears of a supply disruption. At the time of this writing, Ukrainian officials said that any crossing of the border by Russian troops would be viewed in Kiev as an “invasion,” suggesting that the conflict could come to a head in the coming days or weeks.

While Europe’s dependence on Russian gas has been on the decline for years, it is obviously not free of Russia’s grip just yet. The standoff over Crimea, and now the eastern provinces of Ukraine, has Europe looking for alternatives. Ukraine is at the crossroads for a significant portion of European energy flows – Europe gets 16 percent of its natural gas from pipelines that pass through Ukraine.

Major Gas Pipelines Through Ukraine

 As a whole, the EU gets about 40 percent of its gas from Russia, and 20 percent of its oil.

Replacing Russian gas will likely include some combination of greater pipeline and electrical grid interconnections between countries, more LNG imports, renewable energy, and a push for the development of European shale gas.

But a campaign to improve energy security could have coal at its core, despite many European governments’ long-held goals to reduce greenhouse gas emissions. Coal is still a low cost energy, and countries like Germany and Poland are major producers. And although Europe has made major progress in its use of renewable energy, it’s done so while keeping an increasingly nervous eye on Russia. As Ladka Bauerova writes in Bloomberg News, the energy security that coal provides may trump Europe’s climate goals.

The Polish government, in particular, is pushing hard to expand Europe’s consumption of coal. Polandproduces 158 million tons of coal per year and consumes nearly as much, second only to Germany in both categories. And with coal accounting for 75 percent of Poland’s electricity, it is not nearly as vulnerable to Russia’s manipulation of energy supplies as other Eastern European countries are.

Polish Prime Minister Donald Tusk recently touted his country’s relatively secure energy position to other European heads of government, as he tries to make coal a key plank in Europe’s energy strategy. “We want the whole of Europe to acknowledge coal as a legitimate energy source,” he said on a TV appearance on March 29. “Poland has been consistently proving that it can guarantee energy security.”

With few other short-term options, chances are his viewpoint will hold sway in Brussels as the EU cobbles together its energy security roadmap, due out in June.

When U.S. President Barack Obama visited Europe in late March, it appeared that European policymakers were pinning their hopes on the U.S. exporting large volumes of LNG to undercut Russia’s position. EU leaders, including German Chancellor Angela Merkel, pressed Obama to green light LNG export terminals. Obama suggested that the EU could smooth the way to greater American LNG exports if a free trade agreement with the U.S. could be agreed upon. But beyond that, he advised Europe to do more to develop its own energy, reportedly saying, “You cannot just rely on other people’s energy.” In any event, liquid natural gas from the U.S. is years away from becoming a significant export and is more likely to be destined for Asia when it does.

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