West Africa's European Pipe Dream

Struggling with high energy prices, Europe continues to seek alternatives to Russian gas — and perhaps Africa will be its answer. Sixteen West African nations and Morocco have signed a “Memorandum of Understanding” regarding the creation of a strategic Nigeria-Morocco gas pipeline, intended to better service African states while also facilitating exports to Europe through the existing Maghreb-Europe pipeline. According to the Economic Community of West African States (ECOWAS), the new pipeline, which will span 6,000 kilometers (3,728 miles) and cost an estimated $25 billion to build, will assist countries such as Ghana and Senegal in exporting their “surplus” natural gas. ECOWAS Commission President Omar Alieu Touray said in a statement that the project “holds great promise, and we will spare no effort for its success.”

Nigerian businessman and economist Tope Kolade Fasua told OZY that the pipeline project represents an “economic escape route” for Nigeria, where the petroleum sector — crucial to the country’s economy — has been plagued by corruption and mismanagement. According to ECOWAS, public and private funding sources will be sought to finance the pipeline, while participating countries will be asked to provide “technical and feasibility support.”

The world’s second-largest copper producer, Peru, will resume movements of its copper after Indigenous communities lifted a weeklong blockade of a key transport route. Protesters caused the blockade while demanding government intervention regarding new plans by multinational commodity company Glencore to develop a new copper-mining project known as Coroccohuayco. This recent blockade is the latest in a series of cease-and-desist cries from local residents, who have voiced concern over the environmental impact of ongoing mining as well as trepidation about the new project. According to Reuters, Peruvian Prime Minister Aníbal Torres agreed to meet with the protesters, who then lifted the blockade. In 2021, Peru exported $20.7 billion of copper, which is used in electrical wiring, plumbing and industrial machinery. (Source: Reuters)

According to The Wall Street Journal, natural gas prices have more than doubled this year due to supply shortages and war in Ukraine. In the U.S., this will translate into a 7.5% average increase in the price of electric bills, as compared to last year. The U.S. Energy Information Administration indicates that natural gas comprised 34% of total power consumption by U.S. industry last year, and 23% of the country’s residential consumption. (Source: The Wall Street Journal)

U.S. bank regulators are considering new rules in an effort to ensure that large regional banks can wind down their operations during a financial crisis without causing harm to the financial system or requiring a government bailout. The largest U.S. banks, such as Bank of America and JPMorgan Chase, are already subject to such rules, which were developed following the 2008 financial crisis; regulators are now considering guidelines that would also affect regional players like PNC Financial Services Group Inc. and U.S. Bancorp. This prospect, however, is unpopular with the banking industry. “The agencies have yet to articulate a clear or meaningful benefit that would offset these significant costs for end users and the financial system,” said Lauren Anderson of the Bank Policy Institute. (Sources: The Wall Street Journal, Forbes)