Tue. Oct 19th, 2021

Newsletter: Europe Express

Sitting in a cozy European home, you can drink organic tea in the evening and watch dystopian American politics unfold on television.

Of course much sadder if the lights and television would go off and the kettle stay cold. This is not a far-fetched risk, thanks in part to European geopolitical energy. By this time, everyone had heard of a pressure on European gas supplies benefiting the Russian group Gazprom and the influence of Moscow.

Less discussed is how conflicts in North Africa are likely to reduce Spain’s winter gas supplies, while possibly contributing to upward pressure on power prices for the rest of Europe.

On October 30, Algeria plans to close a pipeline transporting Algerian gas to Morocco, Spain and Portugal. It is part of a long-simmering feud between Algeria and Morocco that probably began with the former’s independence from France in 1962.

Morocco is angry with Algeria for supporting it Polisario Voor, which wants independence for Western Sahara. Morocco insists it has sovereignty over the long disputed territory. Relations deteriorated further this summer when Algeria accused Morocco plays a role in the outbreak of several serious forest fires on its territory.

The tension has reached the European Court of Justice, which this week hand over a legitimate victory for the Polisario Front, which ruled that a broad economic treaty between the EU and Morocco could not be automatically extended to Western Sahara.

Spain is the European country most affected by the decision of the HvJ. Western Sahara is a former Spanish colony. Some Polisario members have Spanish passports. And in recent decades, the Spanish fishing fleet has relied on up to a third of its catch on the waters of Western Sahara (and Moroccan licenses).

European ties with Morocco extend far beyond fish. There are migration flows, European investments, including car manufacturing, sometimes rocky security measures, tourism and the supply of Moroccan vegetables to European tables.

France and Spain have special legal relations with Morocco that go beyond the scope of other EU treaties. Algeria also has many ties with Europe, but they are slightly apart. His struggle for independence from France from the colonial period is part of his national identity. His army buys a lot of kit from Russia and China.

And Algeria sells a lot of gas to Italy, Spain and Portugal. The gas to Italy passes directly through a submarine pipeline. The gas to Spain and Portugal flows through two other underwater pipelines. The first, built between 1996 and 1997, runs through Morocco, which uses part of the gas for its own generators. The second, introduced in 2011, goes directly from Algeria to Spain.

This is where foreign relations between the EU and Spain are now becoming even more problematic, especially in a now international gas market insufficient European energy storage before winter.

On 29 September, the day the HvJJ’s decision on Western Sahara was announced, Josep Borrell, the EU’s foreign policy supremo, announced a joint statement confirmed a strategic partnership with his Moroccan counterpart. They also swore ‘to take the necessary measures to ensure the legal framework’ for trade relations. It could contradict Algeria and harden its determination in its dispute with Morocco.

The next day, Spanish Foreign Minister and Secretary of Energy Algeria meetings with their counterparts over, among other things, the impending expansion of 25 percent of Algeria-Spain’s direct gas pipeline. Even with the additional gas, Spain will struggle this winter to import gas supplies through its LNG terminals.

Spanish consumers are already furious about high power prices. This prompted Madrid to € 3 billion raid on profits from Spanish energy companies, such as the renewable star Iberdrola.

With the closure of the pipeline, Morocco will have to find ways to go completely without Algerian gas, even though the energy sector has already planned it. It has coal-fired power plants that can use it, and can switch to other imported fossil fuel sources for its gas generators.

Europeans would mistakenly think that Algeria and Morocco define this dispute around economic and technical factors. There are deep feelings about sovereignty, military balance and culture here. It will not be easy for the EU to navigate in such an environment to secure supplies.

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