The Pyrenees gas pipeline highlights the energy divisions of the EU

By: News Team

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French skepticism over a new gas pipeline through the Pyrenees highlights conflicting views on Europe’s future energy mix, as the continent urgently grapples with an energy crisis.

The MidCat would be a third gas connection between France and Spain that, according to its main proponents, Madrid, Lisbon and more recently Berlin, would help Europe reduce its dependence on Russian gas.

However, French President Emmanuel Macron has bluntly told his partners that he sees no point in the billion-euro project.

France claims that MidCat would take too long to build to alleviate the looming energy crisis, would be costly for France and run counter to ambitions to shift to a green economy.

Representatives from Spain and Germany, who spoke on condition of anonymity, told Reuters they believe France is acting to protect its own struggling nuclear industry and fend off competition from Spain as a starting point for imported gas.

“Macron is under pressure at home from different groups, who don’t like the pipeline project, the biggest one is certainly the nuclear power sector,” a senior German government source said.

Spokesmen for the French energy ministry and EDF which operates France’s nuclear reactors, declined to comment.

Russia supplied 40% of Europe’s gas before its invasion of Ukraine. Now the region is striving to diversify its energy sources, and MidCat was one of the projects EU ministers discussed at an emergency meeting in Brussels last week.

Last month, German Chancellor Olaf Scholz described the pipeline as “dramatically absent” from the European network, and last week he raised the issue with Macron during a video call.

Immediately afterwards, Macron said that there was spare capacity in the pipelines already linking Spain and France and that the MidCat could not be built quickly enough to alleviate the crisis this winter.

“I don’t understand what short-term problem this would solve,” Macron said.

However, while it may not provide immediate relief, Spain and Portugal say they have a solution with new gas routes, and Madrid said it was willing to persuade Macron about MidCat.

Both have large gas import capacity, with seven liquefied natural gas (LNG) terminals converting LNG tankers back to steam for use by industry and households, if the infrastructure was in its place so that it was driven to other countries such as Germany through France.

The French president has declared that he doesn’t understand all the fuss over MidCat, telling reporters last week: “I don’t understand why we jump like goats over the Pyrenees on this issue.”

This has led Madrid officials to question whether Macron might be asking for something in return, be it EU funding or support for another project. And despite Macron’s statements, French officials have left the door ajar for new talks.

However, in a show of Spanish frustration, one source said France needed to demonstrate how it was contributing to European “energy solidarity” given that half of its nuclear reactors are out of service and it relies on others for power.

However, Macron has said plans to revive a disused interconnector in eastern France so that Paris can pipe its own gas directly to Germany if needed is proof of his commitment.

This will allow France to supply Germany with up to 20 terawatt hours (TWh) of gas during the winter, roughly 2% of the gas needs of Europe’s largest economy. A German official said the deal would not solve Germany’s crisis, but would send a message to the markets.

CONFLICTING INTERESTS

The energy regulators of both countries rejected in 2019 a joint proposal for a new trans-Pyrenean gas pipeline that would have a capacity of more than double the volume of gas channeled between Spain and France.

The project was proposed by Terega, a gas network company partly owned by Italy’s Snam and EDF, and its Spanish counterpart Enagás (BME: ENAG ) at an estimated cost of €3bn.

While the French regulator said the economic benefits would be tipped towards Spain, Madrid says Moscow’s moves to cut off gas supplies mean MidCat’s advantage would now extend well beyond Spain’s own borders.

However, France has terminals on its Atlantic and English Channel coasts and also wants a share of LNG imports.

“France has (LNG terminals) that can process gas for all of Europe,” a French government source said.

In the longer term, however, France is betting heavily on reviving its troubled nuclear industry in its quest for carbon neutrality, and Paris has questioned MidCat’s green credentials.

Those responsible for the French Ministry of Energy affirm that it will be necessary to wait at least until the end of the decade for the MidCat to be finished.

“At that point, the priority will be to decarbonize the economy, not use more gas. So we are somewhat taken aback,” a ministry official told Reuters.

THE HYDROGEN OPTION

Berlin’s main interest in MidCat lies in green hydrogen rather than short-term LNG supply, two senior German officials told Reuters.

Authorities in Madrid and Berlin say the pipeline could be reused to transport zero-emission hydrogen fuel made in the Sahara desert or elsewhere to the industrial heartland of Europe.

However, France prefers to produce hydrogen locally than to rely on imports. In addition, he doubts the short-term viability, according to a French government source, of the German vision of hydrogen, which is notoriously more difficult to transport than natural gas.

Faced with French resistance, Madrid and Berlin explore alternatives. Plan B could bypass France and build a gas pipeline under the Mediterranean to Italy.

Madrid is speeding up a feasibility study for a gas pipeline from Barcelona to Livorno, on the Tuscan coast. A Spanish official said that its construction would take more time, but that it had the political backing of the outgoing Italian government.

A senior official from Spain’s autonomous region of Catalonia, which supports MidCat, said an underwater gas pipeline to Italy would be more expensive and carry greater environmental and other risks.

One of the problems is the flammability of hydrogen, which also leaks more easily than gas because its molecules are smaller, and can also embrittle certain types of , the official said.

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