Even as Egypt Hosts Climate Summit, Selling Fossil Fuels Is a Priority

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CAIRO — Walking home from the downtown Cairo restaurant where he works late one recent night, Ahmed Ali did a double-take: Tahrir Square, home to the famed Egyptian Museum and multiple revolutions, was almost entirely dark.

Usually it dripped with golden light. But that night, practically its only illumination came from the red subway stop sign.

Had there been a blackout? Mr. Ali asked his fellow waiters. No, they said.

In August, at the height of the Egyptian summer, the government had ordered government offices, stadiums, hotels and malls to turn down the air conditioning and turn off the lights to conserve power. The natural gas savings would be sold to Europe at a hefty markup, helping Egypt weather an economic hurricane and Europe survive an energy crisis brought on by Russia’s invasion of Ukraine.

“The more we export to Europe, the more we’re going to have electricity shortages here,” said Mr. Ali, 21. “It’s a good thing for Europe, but it’s not a very good thing for us.”

To the government in Cairo, however, a Europe in sudden need of natural gas is a very good thing.

And even as Egypt hosts the annual United Nations conference on combating climate change, known as COP27, this week, selling fossil fuels has been among its top priorities.

Critics have questioned Egypt’s fitness to host the summit over other aspects of its environmental record, including lackluster emissions-cutting targets and massive infrastructure projects that are destroying green space across Cairo and sucking water from the already-stressed Nile, its main water source.

But gas is in the spotlight.

While Egypt is desperate for cash as fallout from the Ukraine war batters its debt-ridden economy, Europe is desperate for natural after spurning Russian energy because of the war.

Enter Egypt and its two gas liquefaction export plants — just across the Mediterranean from Europe.

Since Egypt began pumping from the enormous Mediterranean natural gas field known as Zohr in 2017, the country has sought to position itself as a major energy hub. By January, it hopes to sell $1 billion of natural gas a month, some its own, some imported and liquefied for re-export.

A direct gas pipeline from the southern Mediterranean to Europe is impractical, experts say. That means natural gas pumped from elsewhere in the region must first head to Egypt for liquefaction before being re-exported north to Europe by ship.

“The financial situation we’re in has put us in a ridiculous position, cutting off energy from Egyptians to sell to Europeans,” said Ahmed El Droubi, Greenpeace’s Middle East regional campaigns manager.

But for Egypt, the benefits of positioning itself as an energy hub go beyond the financial.

Egypt already uses its geopolitical leverage on two other major issues, illegal migration and terrorism, both of which it has promised Europe to help counter. Energy has given it a new card to play in the face of scoldings from the West over its human rights record.

Egypt is also profiting from L.N.G. shipments passing through the Suez Canal, on which the government recently raised fees, said Richard Probst, the Egypt representative for Friedrich-Ebert-Stiftung, a German social democratic political foundation.

“With Europe in need, not many will push back,” he said.

The European Parliament voted in July to label natural gas as a “green” fuel, opening the door to a flood of new investment. Western energy companies are striking gas deals with governments across Africa to supply Europe.

The European Commission’s president, Ursula von der Leyen, has said that a June deal between Israel and Egypt to export a steady stream of natural gas to Europe would “contribute to our E.U. energy security.”

Egypt has dismissed warnings from climate experts that no new gas fields should open if the world is to have a chance of limiting warming to 1.5 degrees Celsius, the level experts say is necessary to prevent the worst impacts of climate change.

Egypt’s petroleum minister, Tarek el-Molla, recently called gas “the cleanest hydrocarbon fuel,” saying it will continue to play a key role in the energy mix.

But environmental groups warn that gas investments risk locking developing countries into decades of fossil fuel dependency.

“Instead of putting these really expensive large investments into dead-end projects, they should be shifted into clean-energy projects” that would eventually cost far less than fossil fuels, said Rachel Cleetus, the climate and energy policy director at the Union of Concerned Scientists.

“But richer countries are not in a position to wag their fingers,” she added. They too are expanding fossil fuel investments. “And it is a much harder challenge for low-income countries to make that transition.”

There are, however, serious doubts that Egypt can continue covering its own gas needs, let alone Europe’s.

“Talk that Egypt can supply Europe with bountiful gas is, for lack of a better word, a myth,” said Peter Stevenson, the east Mediterranean editor at MEES, an oil and gas analysis firm.

Even if Egypt’s two L.N.G. plants were running at full capacity, they could export only about 11 percent of what Europe used to get from Russia — assuming Europe can afford every drop of Egyptian gas, the majority of which goes to the highest global bidder.

But the plants have operated well below capacity, pointing to a deeper issue: Despite the windfall of the Mediterranean gas field, Egypt has barely any surplus gas of its own to sell.

Domestic demand for power has soared nearly 35 percent since 2015, driven by a rapidly growing population, while gas production has dropped steadily since last fall, thanks in part to overdrilling.

To close the gap and free more gas to sell, Egypt is fueling some of its power plants with mazut, a low-quality fuel oil that burns dirtier and shortens the plants’ life spans, said Mohamed El Sobki, an energy engineering professor at Cairo University. Thanks to mazut, Egypt’s electricity sector has begun emitting carbon dioxide at steeply higher rates.

“This is a double-edged sword, really,” Professor el-Sobki said. “We are increasing the economic prospects for natural gas, but also, we’re hurting the environment.”

Egypt managed to export two cargoes of L.N.G. to Europe in August after increasing gas imports from Israel and burning more mazut at home. Without such measures, however, Egypt would have had nothing to sell and would even risk blackouts, Mr. Stevenson said.

Ordering electricity cutbacks in the heat of August, when domestic demand usually peaks, may have helped as well.

But the rush to make Egypt a gas hub appears to have diverted attention from its huge clean-energy potential, which needs more investment and better government regulations, analysts say.

Despite its vast deserts, windy coastlines and year-round sunshine, just 4.9 percent of Egypt’s power came from renewable sources in the most recent fiscal year, far short of its goal of 20 percent by 2022.

The Climate Action Tracker rates Egypt’s emissions-cutting pledges, which until recently did not even include a numerical target, as “highly insufficient.”

Some energy experts agree with Egypt that gas can play a crucial role in keeping the lights on and homes warm while the world moves toward clean energy, as long as fossil fuel investments are retired quickly. Long term, they say, Egypt is geographically well situated to export clean energy from the renewables-rich Middle East to Europe.

As some African countries have pointed out, Egypt and other developing countries can hardly be faulted for trying to profit when wealthy nations got rich off fossil fuels first.

There’s a “rising tension between developed and developing countries that’s going to be on full display” at the climate conference, said Jason Bordoff, the cofounding dean of the Columbia Climate School. “Low-income countries are saying, ‘We did not cause the problem, yet you’re asking us to not industrialize in the same way that developed countries were able to.’”

Ahead of the climate conference, Egypt’s clean energy investment has picked up, with Mr. Sisi saying recently that green projects now account for about 40 percent of total public investment. Egypt plans to unveil a national strategy to make green hydrogen, a clean-burning but energy-intensive fuel produced from renewable sources, at the summit.

For now, gas is king.

Mr. el-Sisi was set to meet with Ms. Von der Leyen of the European Commission at the summit on Monday, though the meeting was later canceled. On the agenda: gas for Europe.

Sumber: www.nytimes.com

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