Where should the European energy crisis be solved?

According to the statistics of Rystad Energy, a Norwegian energy information company, in 2022, there will be only 44 oil and gas leases in the world, which is the smallest year since 2000, down about 60% from 105 in 2019 before the epidemic.

Rystad added that as of the end of August this year, only two new blocks in the United States had obtained drilling permits. However, the Biden government did not actually provide new offers for oil and gas leasing, and the few auctions conducted during Biden's tenure were actually policies left over from Trump's time.

This fact is contrary to Biden's attitude of repeatedly urging American oil companies to increase production, but echoes the outrageous high prices in the global oil and gas market this year. Of course, this is also the most intuitive result of Biden's long-term suppression of the fossil fuel industry.

The domestic energy market of the United States is still beset by supply and demand, not to mention its assistance to other countries.

In fact, the proven reserves of large western oil companies are declining. The EU, which is suffering from the energy crisis, is really hard to expect to get supplies from mature markets.

Reserves are worrying

A year ago, Rystad warned that the proven reserves of oil might be exhausted in less than 15 years, mainly because there was no new capacity to make up.

It also said that the proven oil and natural gas reserves of large oil companies, namely ExxonMobil, BP, Shell and Chevron, were declining rapidly.

Due to the fierce development momentum of global new energy, policy bias and the loss making lessons from the disorderly expansion of the previous few years, energy companies are not interested in exploring new fossil fuel deposits.

In 2020, the capital expenditure of large energy companies will be reduced by 34%. Although the expenditure will start to rise in 2022, it will only increase by 12%, which is still a huge difference compared with the decline.

In terms of reserves, the proven energy reserves of ExxonMobil in 2020 decreased by 30% compared with 2019, equivalent to 7 billion barrels of oil equivalent. Shell's reserves decreased by 20% year-on-year in 2021, equivalent to 9 billion barrels of oil equivalent.

In the past decade, only Total and Eni among the world's major oil and gas companies have avoided the reduction of proved reserves.

African resources

Vijaya Ramachandran, director of energy and development at the African Breakthrough Institute, said that if Europe's energy security goals were serious, it should go to Africa for more development.

According to the proven situation, Africa has a large amount of natural gas reserves, but few of them are developed for consumption or export. So far, Algeria and Libya are actively building pipelines connecting with the European continent to export oil and natural gas.

However, Africa's largest energy treasure is located in sub Saharan areas, including Nigeria and Tanzania, which have about one-third of the reserves of the African continent. In addition, Senegal has recently discovered new offshore oil fields.

Ramachandran said that the construction of a trans Saharan pipeline will probably transport as much as 30 billion cubic meters of natural gas from Nigeria to Europe every year, which is equivalent to two-thirds of Germany's natural gas imports from Russia in 2021.

The trans Saharan pipeline will be 2500 miles long, but slightly shorter than the Yamal pipeline between Russia and Europe (2607 miles).

Or Europe can import African energy through LNG, which Mozambique has already started this year.

Last year, experts estimated that Mozambique could earn US $12 billion a year by exporting 30 million tons of LNG, and the entire project could bring in more than US $100 billion.

The only problem is that Europe needs a pipeline or more LNG receiving ports.

From the perspective of Germany alone, these two plans need more policy support, but the policy is just one of the most time-consuming projects of EU countries.