Yes, it can but it will take time. Expanding Caspian natural gas pipeline supply can greatly benefit EU’s energy security in the 2030-time horizon and beyond. As an immediate measure, the EU has focused on increasing access to Liquefied Natural Gas (LNG). However, in the medium and long-term, priority should be given to developing new natural gas pipelines from the Caspian.

EU has recently recognized that it needs to reduce dependence on Russian gas. In addition to geopolitical considerations, there is a strong economic rationale for why the EU needs to proactively diversify natural gas supply. There is a high degree of market concentration, with three suppliers responsible for over 80% of natural gas imports to EU in 2021. Such a high degree of concentration exposes EU consumers to a greater likelihood of supplier strategic behavior and disruptions as well as increases probability that the market will be underserved.

Non-Russian countries of the Caspian basin and Central Asia have about a quarter of the world’s natural gas reserves. Tapping into new Caspian gas is more cost-competitive compared to new LNG sources. In fact, natural gas production cost modeling commissioned by the UK Department of Business, Energy & Industrial Strategy identified development of new gas pipelines from the Caspian as one of the most cost-competitive options for the European market.

A Veritas Global study on the economics of natural gas supply diversification estimates that EU consumers would have seen lower wholesale gas prices by 24% in 2021, had the European market secured better access to Caspian gas. This could have saved EU consumers between €24 billion to €48 billion in 2021. These benefits could be realized by implementing the White Stream project, which would bring Caspian gas to EU. This shovel ready project was put on the backburner due to misplaced concerns over climate change and a lack of political will. Reviving this strategic project today would meaningfully contribute to improving European energy security in the 2030-time horizon and beyond.

A well-functioning and competitive natural gas market also supports the green transition in two important ways. First, it offers an immediate opportunity for reducing greenhouse gas emissions. Burning natural gas instead of coal produces roughly half the carbon dioxide emissions to generate the same amount of energy. Second, natural gas offers a flexible and reliable source of balancing capacity to manage fluctuations in energy supply, which enables achieving a higher penetration rate of renewable energy. Except for nuclear power, electricity generated through natural gas currently offers the most viable and low-carbon alternative to coal-based power as a solution for intermittency. Over the long-term, renewable hydrogen has the potential to become a substitute to natural gas. However, even if the EU hydrogen strategy is fully implemented, only modest quantities of renewable hydrogen are expected to be available over the next two to three decades. Therefore, better access to Caspian gas is an essential complement to EU’s hydrogen strategy and key to supply diversification.

Crucially, burning natural gas can be compatible with EU’s net carbon neutrality targets. Several options exist for neutralizing greenhouse gas emissions associated with natural gas use. Options include deploying carbon capture and storage technology, purchasing international offsets, and using direct air carbon capture processes. While all options offer technically viable solutions, the progress achieved in recent years in direct air carbon capture processes has the potential to generate near endless opportunities for emission reductions at a reasonable cost. Therefore, tapping into more Caspian gas is a solution that strengthens EU’s energy security and can be fully compatible with net carbon neutrality targets.