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Removing Support for the EastMed Gas Pipeline: A Strategic Decision

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Guillermo Abio

In the first days of 2022, the Biden administration withdrew its support for the EastMed gas project, which aims to connect the gas fields in the Eastern Mediterranean to Greece, and then to Italy and potentially to the rest of the European peninsula. This pipeline is one of the EU’s cornerstone projects on its search for greater source diversification and reducing its dependency on Russian gas, which makes up for around 30% of consumption and 50% of Europe’s gas imports. Indeed, the European Commission included EastMed on its list of projects of common interest in November 2021.

Washington argued that regional tensions were behind its policy shift, as well as environmental concerns, which have become the ‘go-to’ argument to legitimise decisions on the international arena, even when the rationale behind them never ceases to be geopolitical. Such is the case with this project. Turkey has repeatedly voiced its opposition to avoid sharing its current monopoly on gas pipelines entering the EU through the European south-eastern flank, and so has Russia to avoid greater competition as a gas importer for Europe.

Critics of the US decision argue that, by hindering greater interconnections within the European energy market, it could lead to a potential reinforcement of European dependency on Russian gas imports in the medium and long term. It also hinders Israeli gas from reaching the European market, undermining Tel Aviv’s potential as a regional energy hub, and reduces the potential of gas fields operated mainly by Chevron, a US company.

While these claims are legitimate, Washington understands that the benefits of removing its support outnumber the costs under current circumstances. To understand why, one must look further up north, to the Ukrainian border, where tensions fuelled by the deployment of Russian troops have created a perfect moment in Washington’s eye to change its stance towards EastMed: It makes a concession to Moscow with low political cost (the decision has gone unnoticed to most of U.S. public [e.g. neither the Wall Street Journal nor the N.Y. Times reported about the policy shift]), and makes a rapprochement to Turkey in a geographical area of the outmost interest for Ankara. It does so in a moment when ensuring allies in and around the Black Sea has become critical for the US amid tensions with Russia. With its decision, Washington also profits and throws itself into the new regional dynamics of détente, which have spread from the Middle East, with the end of Qatar’s blockade by GGC countries and the reestablishment of communications between KSA / UAE and Iran, to the Eastern Mediterranean, where Turkey and Egypt have begun a fast process of cooldown.

The costs? Also, not too high. At maximum capacity, EastMed would run at 10BCM, which is less than 2% of Europe’s annual gas consumption (541 BCM), less than 6% of Europe’s annual imports from Russia (167 BCM), and five times less than the annual capacity of Nord Stream I (around 55 BCM). It is fair to say that EastMed would not be as much a game changer for Europe’s energy supply as we usually think.

Furthermore, Washington’s ‘no’ does not imply a straight up cancellation of the project. The final word rests upon the results of a report commissioned by the European Commission as a follow-up to a 2019 report, which already confirmed the technical, environmental and financial feasibility of EastMed. If the project ends up going through, US would get the benefits of a less Russian-dependent Europe (however small the improvement is), while having scored positive points with Ankara and Moscow. If it does not go through, as the latest reports suggest, the loss would not be as significant.

What seems evident is that the US has chosen the shot-term ‘win’ over a slightly better longer-term position for its allies. This is not necessarily a regrettable choice. In this particular situation, benefits in the short term seem to considerably outnumber those that could be ripped in the long run by supporting EastMed.

With US liquified natural gas (LNG) exports to Europe hitting a maximum in 2021 and no American firm involved in the process of construction and operation of EastMed, it seems clear that the decision is not based on environmental or financial concerns, but rather geopolitical. As such, it entails drawbacks and benefits. In this case, the latter have been maximised by implementing policy shifts at the most appropriate moment and by correctly assessing short and longer-term trade-offs. While the faith of the project remains to be seen, EastMed provides another example of how developments in the Ukrainian border and Turkish isolation complaints are affecting regional calculations in Washington.