European Commission President Ursula von der Leyen attends a press conference on the 'Save gas for safe winter' package at the European Commission in Brussels, on July 20
European Commission President Ursula von der Leyen attends a press conference on the 'Save gas for safe winter' package at the European Commission in Brussels, on July 20 Photo: EPA/STEPHANIE LECOCQ

Portugal stands its ground over European gas deal

European deal – likened to “Emmental cheese” – frees Portugal from 15% cut in consumption

Portugal’s minister of environment Duarte Cordeiro – as well as the wider government – is celebrating the fact that the country ‘got what it wanted’ from Europe’s gas demand reduction plan – created to (try and) deflect Russia’s blackmail over supplies through the coming winter.

Portugal stood its ground in the face of Ursula von der Leyen’s initial outline of an across-the-board 15% reduction in consumption and has emerged ‘victorious’ in that cuts now are being left to its discretion.

But the reality is the deal reached in Brussels on Tuesday was more a patchwork quilt of compromises, which one EU diplomat has described to looking like “Emmental cheese”.

If Russia, for example, reduces gas supplies any further than it already has (see below), Brussels will have the power to trigger a state of emergency, making its plan mandatory, not discretionary.

And this is where it all gets a little vague: Duarte Cordeiro suggests that even with a mandatory position on gas consumption, Portugal (among other countries, including Ireland, Malta and Cyprus) would be exempt.

The exemptions come due to none of these countries being connected to the EU gas pipelines – and in Portugal’s case, because of gas being pivotal when it comes to the generation of electricity, particularly for industry.

But this is all visiting a situation of ‘worst case scenario’.

For now, this week the mood is positive: Portugal has the leeway it wants, assures Duarte Cordeiro, and “will do its work” to reduce consumption without crippling the economy.

He told reporters on Tuesday: “The approval today of this deal is a very important response by the European Union, a response of solidarity, united, in the face of the aggression we all feel from Russia, and the impact this blackmail that is being done with gas is having on prices, and our ways of life, our democracies and our liberty.”

And while Europe itself seeks to source alternative sources of gas, Mr Cordeiro stresses Portugal is ready and willing to become part of a new supply chain, using the port of Sines as point of entry for LPG (liquified petroleum gas) for example.

Potential new suppliers include countries like Azerbaijan, the United States, Canada, Norway, Egypt and Israel, Europe’s energy commissioner Kadri Simson has explained to the BBC, whose Brussels’ correspondent Jessica Parker has admitted that the whole deal may well have been “rushed ahead of the August break”. Ministers were under pressure to act, and this is what has emerged: a lot of people congratulating each other over an agreement full of grey areas.

Russia reduces gas flows into Europe to fifth of total capacity

As if to underline the rather wobbly base of the deal, Russia cut its supply of gas to Germany through Nord Stream 1 on Wednesday by another 20%. The latest reduction – on the basis that one turbine needs maintenance (another is ‘held up in Canada’…) means ‘only’ 33 million cubic metres of gas is flowing in per day, which is a fifth of the total capacity and half the flux previously sent to the European Union.

In the mindsets of European leaders, the “technical problems” cited by Russia for failing in programmed supplies are simply more of the Kremlin’s ‘war strategy’, designed to wear Europe down and barter for the lifting of sanctions imposed as a result of Russia’s constant military bombardment of Ukraine.

Portugal’s position in this part of the battle is very much as a bystander. The question citizens may be asking is why is it that a country that has boasted so fulsomely of its advances in the field of renewable energies is still so dependent on other countries’ gas?

This is the irony: if it wasn’t for the drought, the country might be a great deal more energy self-sufficient. But because of the drought, the dams used for creating hydropower have run too low, and the production of hydroelectricity has had to be drastically cut back.

Gas is the only ‘alternative’ driver to create the electricity the country needs and thus the ‘perfect storm’: Portugal, like every country in Europe and indeed many beyond, is intricately bound up in the conflict in Ukraine, even though in reality this country has never depended on imports of Russian gas.

 “This was not Mission Impossible!”

This was the jubilant tweet from the Czech Republic which ‘hit the ground running’ when it took over the rotating EU presidency at the beginning of the month; its focus to “support the efforts of the EU in defending the sovereignty and territorial integrity of Ukraine, using all instruments and programmes offered by the EU, including the reinforcement of sanctions”.

Czech minister of industry and trade Josef Síkela was the man responsible for encouraging dissenters like Portugal into accepting the European gas demand reduction plan and, as such, he believes the decision “has clearly shown member states will stand tall against any Russian attempt to divide the EU by using energy supplies as a weapon. Adopting the gas reduction proposal in record time has undoubtedly strengthened our common energy security. Saving gas now will improve preparedness. The winter will be much cheaper and easier for EU’s citizens and industry”.

And that is really all one can hope for, as there are no assurances.

Bottom line, this new deal is meant to start from August 1 (next Monday), ending on March 31 next year.

One country (Hungary) is unlikely to make any changes in its gas consumption; others like Portugal will “use their best efforts to meet reductions”, and all will very probably be crossing fingers behind proverbial backs.

A preliminary text released by the Czech Republic on Tuesday stressed that the “regulation is an exceptional and extraordinary measure, foreseen for a limited time. It will, therefore, apply for one year and the Commission will carry out a review to consider its extension in light of the general EU gas supply situation, by May 2023”.

By NATASHA DONN

natasha.donn@portugalresident.com