October 27, 2021
When it comes to gas the rivalry between Algeria and Morocco affects Spain directly. What happens beyond our border is extremely relevant and it often gets overlooked. In addition to the ongoing migratory flows we now have to face uncertainty regarding energy supply caused by the upcoming expiration of the concession for the gas pipeline that runs through Morocco – “Maghreb-Europe” – on November 1st.
The causes for this strategic dependency, which equally affect Portugal, do not lie solely on geopolitical reasons. They are also the result of poor national regulation of the energy market which is influenced by the European Union (EU) regulations.
It is not likely that Algeria will renew Morocco’s concession which allows Algerian gas to reach European ground through its neighbor’s border; with its corresponding fee. This could represent up to 8% of the total gas volume that circulates through Morocco.
The bad relationship between Rabat and Algiers motivated by historical, economical and political reasons has always affected Madrid. Spanish diplomacy is often forced to seek balance between both countries through demand satisfaction, despite its political cost, given that the border between both countries is heavily militarized.
Argelia is the main voice defending the Polisario Front and the independence of Western Sahara as a vital issue for the Alawite kingdom’s sovereignty. It is precisely because of this that Morocco established formal relations with Israel in exchange for the United States’ (US) recognition of Morocco’s sovereignty over Western Sahara. The US, alongside Russia and China, is also present in Morocco’s defense industry given how significant the contracts of the main programs regarding weapons as well as land, naval and aerospace systems are.
Spain is highly dependent on Algerian natural gas, a strategic raw material that arrives through two pipelines: i) “Medgaz” which reaches European soil directly from the Mediterranean Sea and; ii) “Maghreb-Europe” which was previously mentioned. The uncertainty surrounding energy is increasing given the upcoming arrival of winter. Last year the electricity bill rose considerably right after Filomena, a sudden and heavy storm, and it is increasing to this day reaching record highs. It is worth mentioning that around 50% of electricity consumption is from renewable origin and, therefore, of national generation. Nonetheless there is still a long way to go to achieve full independence.
To this day fossil fuels represent 75% of the Spanish demand. This significant dependence increases our vulnerability resulting in a constant need for alliances and price-balance with producers. The latter is especially delicate if we take into account that the fossil fuel market is currently under transformation making it more difficult to ensure an income. Nigeria is an example of it.
With the upcoming closure of the “Maghreb-Europe” pipeline Spain and Portugal lose a critical supply route. Increasing the supply by 10 billion cubic meters per year will not be enough. Moreover, having to use other means of transport – i.e.: marine transport – will increase the price of gas and electricity. This makes maritime routes a matter of priority for national security.
Furthermore, we need to consider China’s presence given that the Asian giant is also a buyer of Algerian natural gas. Taking into account that China needs to recover its internal demand as well as its industrial production after the pandemic whilst simultaneously dealing with the transformation of its energy model to overcome the substitution of coal we can only expect that it will do everything possible to secure its position as the main customer. The OBOR strategy reaches both the Spanish port of Algeciras and Algeria.
From an European Union perspective it should be mentioned that an increase in demand has not been followed by an increase in supply, especially if we take into consideration that countries of Northern Europe had restrictions on gas supply coming from Russia. It is understandable then that France has described its nuclear capacity as “green energy” highlighting the breach that exists between the ideological climate change narrative and real needs.
Spain has a vast amount of resources for the exploitation of renewable energies, a sector that now represents 1% of its national GDP. Aiming for energy neutrality cannot be the result of ideological narrative but of a credible capacity and a realistic strategic planning. It is evident that at present Spain depends on external energy resources. This should be addressed through reforms, development of technologies and the establishment of measures that protect our sovereign interests.
Juan Ignacio Gaya
Responsibility for the information and views set out in this publication lies entirely with the author.
English version: Valeria Nadal