93 MARTINDALE CENTER FOR THE STUDY OF PRIVATE ENTERPRISE Figure 2 Counterfactual and observed energy prices post-2021 Sources: Author’s calculations; Eurostat, 2026. the largest portion of domestic gas is used for electricity generation. Examining the terminal’s impact on electricity costs is complicated by the 2022 Russian gas crisis, which spiked prices across Europe (Stelzenmüller & Gross, 2024), and by the subsequent European push to reduce gas consumption (Jugé et al., 2026). Croatia’s consistent gas utilization and the relative inflexibility of regional energy markets further complicate isolation of any terminal-specific effect. Using EU energy and demographic datasets, Appendix 1 shows a preliminary model controlling for gas import quantities, macroeconomic variables, and demographic variables. Because unit production costs are not published, wholesale prices serve as a proxy. As Figure 2 shows, the results suggest that although prices spiked across CEE after 2021, the Krk terminal may have absorbed some of the shock relative to comparable nations—price-saving effects that were obscured by pandemic-era inflation and the energy crisis. This preliminary study estimates an average of €676M savings in electricity costs per year since 2021, but with a broad range of uncertainty (€272–€1082). The difference between the lower bound of the confidence interval and the observed costs in Figure 2 strongly supports shock-absorptive effects of the terminal. The savings are a positive signal for the terminal’s effectiveness, though low domestic absorption means precise quantification remains elusive. If renewables’ proportion of the energy mix increases, these price savings’ effects may become less relevant. Trilemma vertex 3: Climate LNG historically has been characterized as the ideal transition fuel: It burns roughly half the carbon dioxide and one quarter of the nitrogen oxide of coal, and the North American shale gas revolution reinforced its reputation through sheer abundance. However, developments in emissions measurement have substantially complicated this picture. Fugitive methane emissions Methane, the primary component of natural gas, has a greenhouse gas potential approximately 80 times greater than carbon dioxide for a 20-year period and is responsible for 25% of global warming (United Nations Environment Programme, 2022). Estimated lifecycle leakage rates for conventional natural gas range from 1.7% to 6.0%. At the higher end, the greenhouse gas footprint rivals or exceeds that of coal in a 20-year horizon (Howarth et al., 2011). Shale gas carries even greater fugitive emissions potential than conventional gas due to the nature of its extraction (Jenner & Lamadrid, 2013), and Croatia’s LNG imports are substantially sourced from American shale (China-CEE Institute, 2025; International Trade Administration, 2025). Croatia’s domestic infrastructure further compounds this risk. The Clean Air Task Force [CATF] optical gas imaging survey found significant methHigh sensitivity band Counterfactual Low sensitivity band Observed prices
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