The US strategy regarding Greece and its energy policy is structured around three main points

By Vangelis Chorafas

The US strategy regarding Greece and its energy policy is structured around three main points. First, Greece must continue to be an energy hub and a guarantor of European energy security. Second, support for the energy transition from coal to renewable energy sources. Third, the exploitation of hydrocarbon deposits will be decided by the market itself.

THE STRATEGY

A few days ago, US Ambassador Geoffrey Pyatt gave an interview to “Greece Investor Guide” magazine. Among other things, he referred to Greece’s energy issues. In this interview he explained the US strategy regarding energy in the wider region.

First, Greece as an energy hub.

“There’s been a rapid evolution of the regional energy map driven by policy investments that Greece has made in recent years, including in gas infrastructure. There’s the TAP pipeline – the first new energy infrastructure built in Europe, specifically to bring non-Russian gas to European consumers and the largest single foreign investment in Greece of the crisis decade. There’s the expanded terminal at Revythoussa, and the new floating regasification unit at Alexandroupolis – that has U.S. investment through BlackRock, and which the United States government has strongly supported as an opportunity to diversify energy sources and routes in Southeastern Europe. And there’s also the new agreement between Greece and North Macedonia for a gas pipeline connecting both countries, which, again, will help to unlock the Balkan energy island, bringing gas to North Macedonia, Kosovo, and even Serbia”.

Second, the support for the transition from coal to renewable energy sources.

“President Biden has made clear that the climate crisis is one of his administration’s number one priorities, while Prime Minister Mitsotakis has also prioritized the challenge of climate change. And indeed, our special presidential envoy for climate, John Kerry, has made the point that the kind of ambitious goals that Prime Minister Mitsotakis has set – phasing out coal-based power by 2025 and using the European Recovery Funds to support the rapid deployment of sustainable green energy options – all fit very well within the priorities of President Biden and his administration. The lignite phase-out is exactly the kind of bold, ambitious goal setting that the United States government has called on all of our allies to adopt”.

Third, the market will decide on the exploitation of Greek hydrocarbons in areas where American companies are involved.

“So, whether Greece continues upstream gas and oil exploration is something that the market is going to be deciding”.

The US ambassador stresses that natural gas is a fuel that will play a key role in the energy transition, and the big question is where it will come from.

SHALE 3.0

As for the shale hydrocarbons, the Shale 1.0 and Shale 2.0 phases reshaped the world energy map. US-produced shale hydrocarbons changed the global hydrocarbon market and shifted the geopolitical influence of oil demand and supply. The United States, formerly an oil-importer country, became an exporter and gained advantages in the exploration, extraction, and production of hydrocarbons. It now exploits these advantages by exporting them, so as to change the global energy landscape. All American companies are adapting to this strategy.

The Shale 3.0 phase is accompanied by pressure on the hydrocarbon industry to reduce its negative environmental footprint, while also calling for improved corporate governance and fiscal responsibility. The ESG criteria are at the heart of investments in the hydrocarbon industry.

Geoffrey Pyatt reminds us of these ESG criteria in his interview, emphasizing that even Greek companies, and particularly ELPE (Hellenic Petroleum S.A.), are looking for ways to make their portfolio “greener”.

Under said circumstances, the American ambassador considers the issue of hydrocarbons in Crete to remain open, but not as a priority.

“I think, ultimately, the bankability of these big offshore exploration projects is going to depend on the decisions of the license holders. I know that ELPE has already surrendered some of its licenses. I know that Exxon Mobil, which is a partner with ELPE and Total in the fields offshore Crete, is continuing to look at this issue. But I think for the United States, the priority is to see both that Greece continues to play this role as a guarantor of European energy security, but also that we continue to do everything we can to support the bold energy transition that Prime Minister Mitsotakis has committed himself to”.

Concerning the region west and southwest of Crete, there is specific evidence, which quite possibly indicates the existence of a large gas field. The consortium, consisting of Total, ExxonMobil, and ELPE, is called upon to decide whether to proceed with the seismic surveys required under the concession agreement. In particular, the timeframe that is scheduled for these surveys ends this winter (end of 2021 – beginning of 2022). There is a possibility of extension, but this is not the issue. The real issue is the stance of ExxonMobil.

ExxonMobil, despite being the largest private energy company in the world, is nevertheless seen as representing the financial interests of the United States. It will therefore move within the framework set by the Biden government.

At the current junction, the US strategy for Greek hydrocarbons is under constant evaluation until the final decisions are made.