Geopolitical tensions and energy

The rivalry between Algeria and Morocco directly affects us in terms of gas supply. What happens on the other side of our border is extremely relevant and, in general, tends to be played down. In addition to the crisis of irregular migratory flows, there is now uncertainty over energy supply. The problem is that the concession for the gas pipeline that runs through Morocco, known as the "Maghreb-Europe" pipeline, will expire on 1 November 2021.

The causes of this strategic dependence, which also affects Portugal, are not only geopolitical. They are also the result of deficient national regulation of the energy market, which is influenced by EU regulations.  

All indications are that Algeria will not renew Morocco's concession to allow Algerian gas to flow across its neighbour's borders to the European continent, subject to a fee. The figure could be 7-8% of the volume of gas flowing through its territory.  

For historical, economic and political reasons, the poor relations between Rabat and Algiers have consequences for Madrid, whose diplomacy is forced to constantly seek balances and satisfy demands, despite the political cost. The reality that explains it all is that our neighbours' border is one of the most militarised in the world.

Algeria is the main supporter of the Polisario Front and the independence of Western Sahara is a vital issue for the sovereignty of the Alawite kingdom. For this reason, the US recognised Rabat's sovereignty over the Sahara in exchange for Morocco initiating relations with Israel. Contracts for major land, naval and aerospace weapons and systems programmes are significant and explain the presence of the Russian, Chinese and US defence industry.

Spain is highly dependent on Algerian natural gas, a strategic raw material that arrives via two pipelines: the 'Medgaz', which arrives directly via the Mediterranean Sea, and the aforementioned 'Maghreb-Europe' pipeline. It is the arrival of winter that accelerates the uncertainty. Last winter, after the Filomena storm, the price of electricity shot up to record highs, and we continue to see increases, practically on a daily basis. Around 50% of the electricity generated is of renewable origin, and therefore of national generation, but there is still a long way to go to achieve a 100% electrified economy.

Dependence on fossil fuels (75% of demand) implies a vulnerability for our interests and, therefore, a constant need for alliances and balances with producers, a market that is known to be in transformation and that needs to secure income. Nigeria is a case in point.

With the closure of the Maghreb-Europe pipeline, Spain and Portugal lose a critical supply route and it will not be enough to increase supply with 10 billion cubic metres per year. And what does not arrive by land has to arrive by ship, which increases the price of gas and electricity. This makes maritime routes a priority issue for national security.

China's presence is relevant because it is also a buyer of Algerian natural gas. The need to recover its domestic demand and industrial production after the pandemic, as well as the transformation of the energy model through the replacement of coal, will do everything possible to lead its position as a major customer. The OBOR strategy reaches the port of Algeciras, but also Algeria.  

From the European Union's perspective, it should be added that the increase in demand has not been matched by supply, and that the countries of Northern Europe have had restrictions on the supply of gas from Russia. Given this situation, it is understandable that France has described its nuclear capacity as "green energy", a decision that expresses the huge gap between the ideological narrative of climate change and real needs.

Spain is a country with a wealth of resources for the exploitation of renewable energies, a sector that represents 1% of GDP. Desiring energy neutrality cannot be the result of an ideological narrative but of credible capacity and realistic strategic planning. Energy dependence on the outside world is a fact and this implies tackling reforms, developing technologies and establishing measures to protect our sovereign interests.