Algeria struggles to meet Europe’s rising demand for gas

This is an audio transcript of the FT News Briefing podcast episode: Algeria struggles to meet Europe’s rising demand for gas

Marc Filippino
Good morning from the Financial Times. Today is Thursday, April 21st, and this is your FT News Briefing.

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We’ve got an update on the war in Ukraine. We’ll find out about Algeria’s struggle to supply more energy to Europe, and Mexico’s populist president failed to get state control over the electricity industry. So we went for another resource. Plus (cheering in the background) there were celebrations in US airplanes after a judge struck down the government’s mask mandate for transport. We’ll look at the fallout. I’m Marc Filippino and here’s the news you need to start your day.

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Ukraine has access to 20 more warplanes, thanks to a transfer of spare parts facilitated by the US. This will boost Kyiv’s firepower against Russia, and it comes as Moscow has launched a renewed offensive in eastern Ukraine. Here’s our defence and security correspondent, John Paul Rathbone.

John Paul Rathbone
We haven’t seen Russia yet unleash the full forces of its army, and there are several reasons for that. But some of the shelling has been really intense. Both of the Ukrainian armed forces’ positions and also in the west, around Lviv, and other areas where Russia is trying to stop the supply of western arms getting through to the Ukrainian army.

Marc Filippino
So John, in the first stage of this war, Russian forces were, as you put it, they were moult, there was low morale among troops and in Moscow was going to reboot its forces. What’s happening with that now?

John Paul Rathbone
Well, there’s there are a lot of questions here about whether Russia can unleash the full force. And the idea was the one theory was that the Russian forces, which are now unified under a single command, they’d get their forces together, they’d move them south to the Donbas and launch this full scale offensive. Instead, what seems to be happening is the Russian forces are being filtered in piecemeal into this new offensive, and how effective these fighting forces will be remains an open question. But what there has been, in a worrying sign that the Russians have got their logistics and their tactics a bit better sorted out, is some very heavy shelling and an air-to-ground fire, which has made life for the Ukrainian forces often hellish.

Marc Filippino
So what’s Russia’s new strategy in Ukraine going to mean on the ground?

John Paul Rathbone
Yeah. So the first phase was sort of guerrilla-style attacks on the Russians. And lightning raids by the Russians, which were then attacked by guerrilla-style forces by the Ukrainians. And this is more going to be artillery, lots of tanks manoeuvring against each other, air cover, fixed positions, trenches. You’ve got all types of drones. You’ve got those that can target and fire on ground forces. You’ve got loitering munitions, so-called, which can hover over a potential target for 40 minutes or so and then do a kamikaze dive and they blow up whatever is below them. It’s too early to say what the lessons of this war will be, but one has been the importance of drones and the importance of anti-tank weapons, and how Russia has failed to tactically rearrange their approach to dealing with that kind of threat.

Marc Filippino
John Paul Rathbone is the FT’s defence and security correspondent.

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Europe’s plan to wean itself off Russian energy has put a spotlight on Algeria. Earlier this month, foreign leaders, including Italy’s prime minister Mario Draghi and the US secretary of state Antony Blinken, visited Algiers to discuss energy security. The FT’s Heba Saleh reports it won’t be easy for Algeria to increase supplies.

Heba Saleh
Algeria does not have extra supplies of natural gas that it can send to Europe, or it does not have sizeable quantities of extra gas. It has, of course, the potential to produce more gas, but it can’t step in right now and fill the gap.

Marc Filippino
Heba right now, is Algeria seeing any benefit from higher energy prices, higher gas prices?

Heba Saleh
Algeria can get higher prices for the oil and gas that it already exports. So it does benefit, of course, because of the increase in prices. And it benefits in another way in that people are looking at Algeria again as a potential place for investment to develop its oil and gas resources or its natural gas resources, more specifically to supply Europe. So there will still be interest in Algeria. The issue is, can companies work there with relative ease? It has been difficult for companies to invest in Algeria in the past, and that’s one of the reasons why Algeria doesn’t have extra gas to import is that we’re talking about years of under-investment in its resources and of course, its own consumption of natural gas. Domestic consumption has been rising, so reducing the quantities available for export.

Marc Filippino
Heba Saleh is the FT’s north Africa correspondent.

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In the US this week, a judge struck down the Biden administration’s mask mandate for public transportation. It was meant to stop the spread of Covid. The ruling led to scenes like this one posted on Instagram. Here’s a Delta Air Lines pilot announcing the news.

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The Biden administration announced that the Transportation Security Administration will no longer enforce a federal mandate requiring masks in all US airports and on foreign aircraft. (cheering in the background)

Marc Filippino
Now, if passengers were relieved, so were airlines. Here’s our Washington correspondent, Kiran Stacey.

Kiran Stacey
There is not a single airline that I can see that has kept any kind of mask mandate in place. Everywhere has taken them off right now. They were all lobbying very heavily to have the mandate taken off, so they were ready to get rid of it as soon as it came. But it will be interesting to see what happens because if we do see another spike in the next few months, it could well be airline crews that suffer. And are they gonna suffer staffing shortages right at the beginning of peak season? That’ll be very difficult for them.

Marc Filippino
Now, we should say last night the Centers for Disease Control and Prevention, the CDC, announced that it was going to appeal. It was gonna challenge the ruling by the judge. So this story isn’t over yet. But in the meantime, do airlines expect that lifting the mask mandate will mean more people flying, less people flying? You know, what do they see is the benefit?

Kiran Stacey
I assume they expect more people to fly, which is why they’ve been lobbying so heavily to get rid of it. I’m not sure why they expect that, to be honest, because I think people who want to and need to fly are flying now, and the fact that every airline had to do it meant that there was no point of differentiation. It was not like people were flying Southwest because Delta had a mask mandate and Southwest didn’t. So I’m not sure why they think that this is going to necessarily improve their business. Perhaps they think it’ll improve relations with their staff because this has been a very, very tense thing to have to police for a long time. But I, yeah, I guess that the airlines think this will be good for business. I don’t entirely see how, but it will certainly make flying, I think for a lot of people, more pleasant. But for some people, less pleasant.

Marc Filippino
Kiran Stacey is the FT’s Washington correspondent.

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One last bit of news: earlier this week, we spoke to our correspondent in Mexico about the president’s effort to boost state control of the electricity industry. Lawmakers shut that plan down. But yesterday, Andrés Manuel López Obrador responded by quickly nationalising the country’s lithium reserves. It’s unclear how large Mexico’s lithium reserves are. The only project under way right now has been run by a China-owned British mining company. It’s unclear what will happen to that investment.

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You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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