Developing an energy strategy by completely abandoning the use of Russian gas in Bosnia and Herzegovina and turning to the far more expensive American liquefied gas is absurd and akin to economic suicide.
This is the view of energy and gas sector expert Vojislav Vuletić, commenting on the efforts of certain Bosniak politicians, including Željko Komšić, a member of the BiH Presidency, to rid BiH of its supposed dependence on Russian gas and switch to North American liquefied natural gas (LNG) at any cost. According to Vuletić, Komšić’s claims, expressed in a recent article published in an American journal advocating for the energy stability of Europe and BiH to be built on American LNG, are inaccurate. He points out that some European countries that have followed this path have already felt the negative consequences.
Vuletić argues that these are politically motivated decisions rather than rational economic ones. This can be seen from Komšić’s messages to U.S. Secretary of State Antony Blinken, thanking him for everything Washington is doing regarding BiH. Blinken, along with the U.S. Ambassador to BiH, Michael Murphy, is a strong advocate for the construction of the South Interconnection gas pipeline, which aims to connect BiH with the Krk terminal in Croatia, where American LNG is predominantly imported. For years, American officials have been warning Europeans, including BiH authorities, that they must eliminate their dependence on Russian gas. Meanwhile, the U.S. continues to purchase uranium from Russia in large quantities, meeting 24% of its current needs despite all the sanctions imposed.
Vuletić believes that if BiH does not want to jeopardize its energy stability, it should not easily abandon existing supply routes and the talks about connecting to the “Turkish Stream” pipeline, which supplies the region through the Black Sea, Turkey, Bulgaria, and Serbia. He explains that Komšić’s energy strategy has several significant flaws. Firstly, LNG is several times more expensive than natural gas due to the costs of processing, transport, and storage. Secondly, there is a lack of sufficient storage capacity. Thirdly, the amount of LNG that the U.S. can supply to European consumers can only meet minimal needs. Lastly, any issues at American facilities, from faulty valves to dense fog, can affect this supply, which is not the case with natural gas. Additionally, even with plans for new storage capacities in the U.S., this will not significantly change the situation. Vuletić is adamant that for the next ten to fifteen years, due to the lack of other alternative and realistic supply sources, European countries will not be able to easily give up Russian gas.
“Relying solely on LNG and building politically motivated pipelines is truly absurd, akin to suicide. The potential construction of the South Interconnection pipeline to connect BiH with Croatia and the Krk terminal is a waste of money. Those who follow the gas market know that even the U.S. does not have enough LNG. For example, Biden recently halted the shipment of 20 billion cubic meters of LNG to Europe. Another critical issue is that environmentalists are strongly opposed to the construction of new LNG terminals in the U.S., which they call ticking ecological bombs,” Vuletić says.
He also notes that the idea of relying on Azerbaijani gas via the Trans-Adriatic Pipeline is not a viable option for BiH. The gas comes from the Shah Deniz field, producing about 14 billion cubic meters annually, all of which goes to Italy under a long-term contract with Baku. When asked about other realistic sources of supply, Vuletić mentions Russia, Iraq, Syria, and Iran, which has one of the largest gas fields that can produce amounts to meet Serbia’s annual needs in just seven days.
“But even in this case, excluding Russian gas, new transport routes and pipelines would need to be built. As far as I know, Israel recently discovered some gas fields in the Gaza Strip. Romania found rich gas fields ten years ago, but not a single cubic meter has been extracted yet. To conclude, countries seeking energy security will have to continue relying on Russian gas, whether they like it or not. Komšić’s strategy is absurd and unrealistic even in the distant future,” Vuletić concluded.
Consequences
A pause in the supply of American LNG to Europe will be another blow to the already unstable energy supply of the continent. Another potential blow could be Ukraine’s announcement that it might soon stop transporting Russian gas through its territory. The cessation of this transit would leave Europe with only the “Turkish Stream,” from which it tries to distance itself. Some experts are increasingly warning that Europe is too reliant on American LNG and that companies are beginning to feel the negative effects of such a policy. Germany’s chemical industry, which generated sales of around $230 billion last year, has plunged into a deep recession caused by the loss of cheap Russian gas, a key raw material for fertilizers and a vital energy source for heavy industry.
Source: Glas Srpske
