Page 9 - EurOil Week 16 2022

EurOil COMMENTARY EurOil

that the US is best placed to serve as the main conclude that LNG is unacceptable. Ireland’s
supplier of LNG to Ireland. However, support- Minister for the Environment Eamon Ryan
ers of LNG imports note that Ireland already as recently as earlier this month declared that
indirectly imports some shale gas that has been LNG would not be “Ireland’s great saviour.”
imported as LNG in the UK. Ryan notably intervened directly in the plan-
The government’s reconsideration of LNG ning application for Shannon LNG in Janu-
comes after chair of Ireland’s Commission for ary, telling local authorities in Kerry that the
the Regulation of Utilities, Aoife MacEvilly, project should not be permitted “under any
made the case for importing the super-cooled circumstances.”
fuel at the end of March. Speaking to local press, Ryan is a member of the Greens, which are
she said that developing LNG facilities did not urging the government not to reverse course
lock Ireland into fossil fuel use for longer, as on LNG. After all, it was the Greens that fought
those facilities could be adapted at a later stage hard to get a commitment in the programme
to import green hydrogen instead. for the coalition government that states: “As
“LNG should be considered in the context Ireland moves towards carbon neutrality, we do
of energy security … There are insufficient safe- not believe that it makes sense to develop LNG
guards at present,” she told the Irish Times. gas import terminals importing fracked gas.”
MacEvilly pointed to recent shortfalls in wind They also succeeded in getting Shannon LNG
power generation. On March 29, she noted, Ire- removed from the EU’s Projects of Common
land’s 5,000-MW of wind power capacity actu- Interest (PCI) list.
ally delivered only 19 MW because it was a calm So while Fianna Fail and Fine Gael are now
day. As a result, gas and coal plants were provid- looking more favourably at LNG, they may be
ing the majority of power. Decarbonisation is reluctant to support it fully, through fear that a
critical but gas needs to serve as a back-up when row with the Greens could cause the coalition
renewables output is low, she said. to collapse. Relations between the parties have
However, the government could still already been very strained at times. ™

POLICY

Romania drafts new offshore law

ROMANIA ROMANIA’S three-party ruling coalition sub- However, under special situations (energy
mitted the so-called Offshore Law to parliament crises), the government “may take measures for
on April 15. the sale with priority in Romania, of the quanti-
The draft law is a set of amendments expected ties of natural gas extracted from the respective
to unblock investments in the Black Sea perim- perimeters.”
eter by sweetening the taxation regime and Separately, bilateral contracts involving gas
removing trading restrictions previously aimed extracted from the offshore perimeters should
at providing higher energy independence. be notified to and cleared by the national mineral
However, there has been no reaction from resources agency NAMR. The state holds preemp-
investors yet and experts question the taxation tive rights over the gas sold under such contracts.
level that remains high and the complexity of the USR, the main opposition party in Roma-
regulations — which may explain investors’ cau- nia, invited the ruling coalition to come up with
tious attitude. Under the worst-case scenario, the more details about the scenario behind the Off-
investors may not have been consulted. In any shore Law draft including the details about the
case, the opposition parties were not consulted negotiations with the investors.
by the ruling coalition — and this opens the door The deputy head of the industry export com-
to fierce debates in the two chambers. mittee in the Chamber of Deputies, the USR’s
The leaders of the three parties sent the bill Cristina Pruna, criticised the idea of using the
along with an optimistic message stating that royalties to develop the gas distribution network
the new regulations unblock the investment pro- (a network that may soon become obsolete), and
jects, secure the country’s energy independence came up with the highly unrealistic alternative
and establish a “competitive” fiscal regime. of somehow handing the money to the Pillar II
When it comes to about unblocking the fund managers (or recipients), who later would
investment projects and the “competitive” wisely invest it in the energy and chemistry
sharing of the benefits (between the state and industries for the benefit of Romanian farmers.
the operator), none of the key investors such as Not only is this idea a legal nightmare, it is also
BSOG and OMV Petrom have commented on economically and morally questionable.
the new Offshore Law’s provisions yet. A more economically sustainable option for
Separately, the claims about Romania’s the state would be to invest the revenues from
“energy independence” secured by the new law offshore royalties in companies such as Hidro-
are purely petty politics as long as the provisions electrica or Romgaz — or any other energy
about the mandatory and transparent sale on or chemistry companies — as capital injec-
national centralised trading platforms (included tions aimed at helping them develop specific
in previous legislation) are abrogated. projects.™

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