Pandemic shocks and the war in Ukraine are rewriting the future of the energy sector across Europe. While environmental objectives have previously come first, energy security now takes centre stage. Energy supply, which was seen as a given, is now seen as less secure, and the key question is how Europe will meet its energy needs and from what sources, while limiting the growth in emissions. In all this complicated landscape, there is no silver bullet. What is needed is flexibility and a mix of technologies, with countries relying primarily on what they already have. Romania has a resource that offers solutions to both the energy and environmental crises and which is even more valuable in the current context: natural gas.
On the other hand, the fact that resources exist in the ground does not mean that we have them, and massive investment is needed to bring them to the surface. Under the illusion that we can be a regional energy hub because of existing resources, the legislative framework has for years delayed or even blocked investment in the development of new deposits and new gas-fired power plants to replace old polluting coal-fired plants and balance the variability of renewable energy in the national energy system. Thus, every winter we have become increasingly dependent on natural gas imports, and Romania has gone from being an electricity exporter to a net importer.
Now, while European capitals are struggling to cope with one of the most disruptive energy crises in the history of the Union, it is also the increase in domestic production that will help Romania get through this winter. This is about the additional volumes that have recently started to be extracted from the Black Sea by Black Sea Oil and Gas (BSOG) - a production that has been delayed for several years also due to unfavourable legislation.
This winter, Romania will be able to cover its gas consumption from domestic sources, even on cold days, without the need for imports, said Niculae Havrileț, former secretary of state in the Ministry of Energy and president of the National Energy Regulatory Authority. According to him, In winter, imports are no longer a reliable source and we can even consider that there will be none at all.
"Fortunately, an operator producing natural gas from the Black Sea, Black Sea Oil and Gas, launched production in June and we could effectively shut down domestic consumption completely independently on a day of extreme cold in Romania without the help of imports", said Niculae Havrileț, according to Agerpres.
The Federation of Oil and Gas Employers (FPPG), the umbrella organisation for the main natural gas producers, covering over 98% of domestic production, has declared its support for a safe winter.
"The FPPG aims to be Romania's main ally for increasing energy production in emergency mode, in order to face this year's cold season in a position of strength both within the Union, but especially in relation to the negotiations that will follow in the East", said FPPG Executive Director Cătălin Niță.
The energy crisis is expected to last for several years, so solutions to ensure energy security must be thought of in the medium and long term. Moreover, they must meet the needs of decarbonising economies, but also protect the energy system from the already visible effects of climate change. Romania therefore needs to rethink the energy sector from a complex perspective, taking into account all risk factors.
"The last two years have shown that the global energy system is vulnerable to extreme weather events. The frequency of extreme weather events is expected to increase due to global warming and it is essential to design the energy system to withstand such extreme events. Energy security must remain a priority through the energy transition. The energy industry and policy makers should seek the right balance between a feasible energy transition and an energy system that is resilient and safe"says the International Gas Union, in Global Gas Report 2022.
Are we waiting for the perfect ideals of the future or are we seizing existing opportunities?
In terms of achieving the environmental targets of net-zero emissions by 2050, a balanced portfolio of technologies is still needed to enable us to navigate the ups and downs of different energy sources.
"The Paris goals are achievable with the technologies that exist today, but we must recognise that none of us can do it alone. If we wait for silver bullet solutions, we may miss opportunities to make progress with what we already have. And while we sit and wait for game-changing solutions to fix everything, it will eventually lead to <>"says Iman Hill, Executive Director of the International Association of Oil and Gas Producers (IOGP).
According to it, the portfolio of low carbon technologies may change as technology advancesso we need to monitor and adapt to them continuously.
"The transition remains a challenging task, but I am confident that if we stick to our principles and we focus on delivering great solutions already available to us, instead of waiting for the perfect ideals of the future, we will get there much faster", added the IOGP representative (details, HERE).
Realistic and achievable strategies are needed in the limited time available
To achieve the Paris Agreement's goal of limiting global warming to well below 2°C and reaching net-zero emissions by mid-century, it will be necessary to greenhouse gas emissions to peak before 2025. In this context, natural gas can make a major contribution to decarbonisation.
"In the limited time available, governments, policy makers and industry will need to develop realistic and achievable strategies to reduce emissions all sectors"says the International Gas Union (IGU), in an analysis published in the latest issue of Global Voice of Gas magazine, launched under the title "Managing transition in an energy crisis". "Natural gas, together with decarbonised and low or zero carbon gases, will play a key role in supporting these decarbonisation initiatives", says the IGU.
Next, the energy system needs to better prepare for external shocks and a combination of unusual events, especially in the power generation sector, a key part of the energy system.
"This includes investments in technologies that allow the power system to cope with increased intermittency, a role usually taken over by natural gas plants. Accelerated investment in clean energy technologies, but also in energy efficiency, is needed", the analysis states Radiography of the energy crisis. How did we get here and how can we get out?" published in Global Voice of Gas.
One of the technologies of the future is blue hydrogen.
"It is likely to be produced in countries with an abundance of cheap natural gas and where carbon capture and storage (CCS) technology is available. This is key to being competitive with green hydrogen in the future", according to the quoted source.
Thanks to the available domestic resources, Romania can become an important regional player, both in terms of blue hydrogen production and CCS development - a proven and globally available climate technology that will be developed on a large scale in the coming decades. With a rich history in the oil industry, Romania has the opportunity to be an important regional player in this sector, thanks to its many depleted deposits. These can now be given a 'new life' and reused to reduce carbon emissions through storage.
Precisely to explain the potential development of this technology in Romania, FPPG has recently launched a dedicated information platform: https://ccs.fppg.ro/.
So the challenges for the energy sector are many and everyone needs to come together and play their part, including gas producers.
And as every crisis creates opportunities, Romania has the chance to rethink its energy system to adapt it to the energy transition and the increasingly visible effects of climate change, keeping security of supply at the forefront. And in this overall picture, harnessing domestic natural gas resources plays a key role in providing the energy we need today, while helping society for the transformations of tomorrow.
