The European Union reaffirmed its opposition to Arctic oil and gas development on Tuesday, even as the bloc prepares for another expensive winter with depleted gas storage and prices approaching levels last seen during the 2022 energy crisis.
The European Commission’s new Arctic strategy calls for keeping oil, coal, and gas reserves in the ground, including in Arctic regions, and preventing hydrocarbon developments that threaten the Arctic ecosystem.
Brussels did make one concession. The new strategy drops a 2021 pledge to pursue an international legal ban on new Arctic drilling and refuse purchases from those developments. An EU official acknowledged that convincing other countries to cooperate has become increasingly difficult.
Europe’s current energy situation makes the timing particularly interesting.
EU gas storage stood at just 74% of capacity on October 14, compared with a five-year average of roughly 86%. Benchmark Dutch TTF gas prices reached €86.03 per megawatt-hour last week, near their highest since December 2022.
Middle Eastern LNG flows remain approximately 80% below year-earlier levels, with disruptions through the Strait of Hormuz continuing to constrain supplies. Europe has already paid an estimated additional €100 billion for oil and gas this year.
Norway, Europe’s largest gas supplier, has urged Brussels to reconsider its Arctic drilling opposition. Norwegian production is expected to decline during the 2030s unless companies including Equinor make new discoveries beyond existing mature fields.
New Arctic developments would not solve Europe’s immediate winter supply problems. Exploration, development, and infrastructure construction take years. But Norway’s concern extends well beyond this heating season.
Europe’s gas supply outlook has already deteriorated enough for EU energy commissioner Dan Jorgensen to propose delaying methane emissions requirements on imported energy to ease pressure on the market.
Brussels is apparently willing to reconsider the timing of its emissions rules, but not its opposition to new Arctic oil and gas development.
Norway’s existing fields, meanwhile, will continue aging whether Brussels approves of new Arctic drilling or not.
By Julianne Geiger for Oilprice.com
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