Our View: Electricity costs can’t wait for gas pipelines
The disappointing results of the gas drilling at the Elektra-1 well in Block 5 of the Cypriot EEZ may have caused some surprise, bearing in mind ExxonMobil’s earlier assessment of its prospects, but it is nothing that really affects Cyprus at present. It is possible the government would have made a big issue out of positive drilling results, but even in such a case it is unlikely it would have impressed the public.
People, with ample justification, have become rather cynical about gas exploration, hydrocarbon reserves, gas pipelines and the so-called exploitation of gas resources, which remains nothing more than a theoretical concept, more than 13 years after the first discovery at the Aphrodite gas field. No gas has yet been extracted and the soonest this might happen would be in three years, although nobody would guarantee it. Other discoveries have been announced after exploratory drilling in other blocks, but exploitation is not even a topic of discussion yet.
Everyone in Cyprus has learned that the oil industry, because of the huge investments needed for the extraction of gas and the volatility of the energy market, operates at a much slower pace than other businesses. In Cyprus’ case there are also the geostrategic aspects, with Turkey making claims and issuing threats which further complicate matters for oil companies. So why would anyone be disappointed that the drilling at Electra-1 found natural gas but not in marketable quantities? It would not have made any difference to people’s daily lives, even if marketable quantities were found. Still, the drilling on behalf of the Exxon Mobil and Qatar Energy consortium will not move to Pegasus-1 site in Block 10.
The reality is that the only thing that is of interest to people and businesses today is neither the drilling nor the pipelines, but when electricity costs would be reduced. There are no answers from the government about this. Energy Minister George Papanastasiou, speaking at a conference in Nicosia on Tuesday, said the reduction of energy costs was vital for the development and competitiveness of the economy and that the government’s strategy was based on three pillars. He gave no indication, however, when these pillars would be implemented.
The main pillar involves the importation of LNG for the power stations but nobody can say when this will happen, even though the FSRU is supposedly ready for action. The use of renewables has also been a bit of a disaster because the electricity grid cannot take the energy being produced while storage facilities are still at the planning stage. As for the third pillar – the sea interconnector – it is not something that will happen any time soon.
People have had enough of hearing grandiose energy plans when faced with unaffordable electricity bills every two months. Cutting energy costs must be the government priority now and not in three or four years’ time.