Why high natural gas prices could benefit democracy

As Russia’s war on Ukraine has disrupted global energy supplies, the focus on renewable and sustainable energy is becoming sharper than ever.

With natural gas prices going through the roof, alternative and renewable energy sources are having their day.

One such source of energy is biomethane – the gas produced by the fermentation of organic matter (often garbage, agricultural waste and food waste), also known as the “renewable natural gas.”

Russia’s war on Ukraine pushed natural gas prices five times higher, to above €100/Mwh this year compared with the beginning of 2021.

“As a result, biomethane that costs c.€80-90/MWh to produce (down to €70/MWh for the largest units) is competitive and could strive without state subsidies… for now,” write analysts at French bank Societe Generale after hosting an even focused on biomethane last week.

The future of this gas seems assured. The French government decided recently to pave the way towards asking gas suppliers to mix natural gas with biomethane – a bit like ethanol is mixed with “classical” petrol in petrol stations across Europe.

When natural gas prices hovered just above €20/MWh at the beginning of 2021, biomethane production had to be heavily subsidised and therefore the gas was not seen as a viable solution to the climate change crisis.

However, Russia’s attack on Ukraine has changed things substantially. Europeans, for whom Russia covers 40% of their gas needs, are now scrambling to buy their energy from somewhere else.

By insisting on being paid in roubles and cutting off gas supplies for European Union member states Bulgaria and Poland, Russia may have rushed its own demise.

Source: Pixabay

With all eyes on alternative supplies now, biomethane’s advantages are clear for all to see: the gas is contributing to reducing carbon emissions, while the sludge that remains after the methanisation process is a natural fertiliser.

On the financial front, producing biomethane locally means fewer energy imports, therefore a healthier balance of payments for the country producing it.

And last but not least, of course, security of supply is assured if the biomethane is sourced locally.

The only major impediment to using this gas was its relatively high cost, but perhaps voters can now be persuaded that it is worth paying it.

There may be an argument that learning to live with high natural gas prices would benefit not just the planet, but democracy itself. European politicians will have to find a way to persuade voters of it.

@AntoniaOprita

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