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Jaanus Karilaid: Let us fix things and build an LNG terminal in Estonia

Jaanus Karilaid.
Jaanus Karilaid. Source: ERR/ Hege-Lee Paiste

Let us try and leave old traumas in the past, straighten up and execute a cross-border public and private sector cooperation project of constructing an LNG terminal in Estonia, Center MP Jaanus Karilaid writes.

We did not build an LNG terminal in Estonia in 2014. Instead, we voluntarily handed the initiative to the Finns who haven't done as much as put a project on paper in eight years. History has given us a chance to fix these mistakes. Let us seize it and deliver additional momentum for the Estonian economy, in addition to ensuring energy security. We have no reason to surrender a good idea, say in the matter and taxpayer euros just like that.

Do you still recall the 1990s? A lot of things were surrendered for next to nothing. Functional companies and brilliant ideas were basically given away. We had managed on our own for years but suddenly couldn't. A foreigner had authority simply because they were from somewhere else and we bowed to them. The effects of this voluntary serfdom echo to this day: we often trust strangers over Estonians, forgetting that strangers will always consider their own interests first should things go south. Something which recent crises have demonstrated.

Thinking only in terms of the domestic market is another vestige from the previous century. Ask a budding young entrepreneur about their plans. They would never think to limit their plans to Estonia, thinking either regionally or globally. Their customer can be anywhere. We all have reason to learn from the young and aim higher.

A measure of mistrust between the public and private sectors makes for a third such legacy from the near past. One reason is the ease with which the sides turn to labels, where the public sector is slow and the private one greedy. In truth, both are strong and effective when seen separately. If only we could build a stronger bridge of trust between the two and carry a few joint ventures to fruition. Unfortunately, Estonia seems to believe more in competition than in cooperation.

We have local examples. [Paldiski LNG terminal developers] Alexela and Infortar already have a success story working with the public sector and are producing green gas with state support in three plants. The result of this cooperation is that biomethane production volumes have tripled in Estonia. Many cities' public transport has switched to local green gas that has led to cleaner air, while use of local fertilizer has helped meet environmental requirements.

In truth, the specific nature of work and intensity of required investments mean that cooperation is inescapable in the field of energy. When it comes to the LNG terminal, maritime and logistics know-how is needed next to how to handle gas, which knowledge and experience need to be merged.

Economic growth and wellbeing rely on investments. The latter require confidence the main components in which are energy and supply security. All aspects of the economy need power and fuel. Successful execution of the energy project would boost confidence in us and create opportunities in foreign policy. The greatest beneficiary would be Estonian industry in the form of a local competitive edge.

We need a solution by fall. Other than constructing an LNG terminal in Paldiski, we have no other way of ensuring gas supply security. There is also no viable alternatives for gas – especially at peak winter consumption. Switching to alternative fuels in such a short time seems unlikely.

We would need to fill Estonia with new boiler plants, while switching to heat pumps would put additional strain on our [power] transmission networks. Replacing gas with heating oil would take us back in time 10-15 years and cross out the green turn for a long time.

We all remember the energy crisis around the turn of the year and how difficult it was for Estonian families and businesses, as well as how much the government had to dish out in support measures. It is likely we cannot escape the energy crisis, while we should do everything in our power to curb its effects. It is impossible to play favorites – just as important as heating in winter is keeping industry going and maintaining jobs to make sure people can pay their bills.

Perhaps we should try and leave old traumas in the past, straighten up and execute the cross-border public and private sector cooperation project of constructing an LNG terminal in Estonia. The terminal is all of those things. Another option is to stubbornly try to save face and keep arguing, adding to uncertainty in already uncertain times. I urge arriving at an agreement as both sides stand to gain, not to mention the Estonian economy.

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Editor: Marcus Turovski

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