Europe depends on Russian natural gas to help heat millions of homes and generate electricity and power plants. With Russian forces massed on Ukraine's borders, the continent's heavy dependence on Russia limits its diplomatic options and threatens its energy supplies in the event of a conflict.

What if Russia stops the flow of gas to Europe?

Russia supplies Europe with about 40 percent of its natural gas supplies. Escalating tensions with Moscow over Ukraine have raised concerns about Russian gas flows to Europe, prompting the European Union to review its contingency plans to address supply shocks, and prompting bloc and US officials to search for alternative supplies.

Some European politicians and experts accuse Russia of using its energy supplies as a political tool, calling for less dependence on commodity exports from Moscow.

Gas prices have soared on the continent, as supply shortfalls and rising demand in economies recovering from the COVID-19 pandemic last year collided with lower-than-expected imports from Russia.

And if the flow of gas stops, either as collateral damage from the war or as a negotiating tactic for Russian President Vladimir Putin, experts worry that prices, already high in an ever-changing global market, could rise dramatically, The New York Times quotes them .

Businesses may also have to close temporarily. If the influx continues, families, already facing exorbitant bills, will experience a painful winter.

European Commission President Ursula von der Leyen said the EU would be able to deal with a partial disruption of gas imports from Russia.

Von der Leyen told reporters in Strasbourg on Tuesday that the European Union had spoken with the United States, Qatar, Egypt, Azerbaijan, Nigeria and South Korea about increasing shipments of gas and liquefied natural gas, either through additional shipments or contract exchanges.

“We also spoke with the major LNG ask if we could swap contracts for the EU,” von der Leyen said, adding that Japan was ready to do so.

"These efforts are now clearly paying off," she added.

And she confirmed, on Wednesday, that the European Union is able to dispense with Russian gas this winter, after diversifying its sources in recent weeks.

Last week, Japan said it would divert some LNG shipments to Europe in response to requests from the European Union and the United States. 

European LNG imports hit a record high of about 11 billion cubic meters in January, just under half of which came from the United States. Gas storage levels in Europe are currently around 34 percent.

Von der Leyen said a complete halt to Russian gas supplies would require additional measures.

She added that the Russian military build-up near Ukraine's borders confirmed Europe's need to reduce its dependence on Russian gas, and the planned shift to renewable energy would help it.

Does Putin do it?

Some analysts and industry executives doubt Putin's willingness to cut off gas supplies, in part because of how important gas exports are to his country's economy. 

On Tuesday, Putin reiterated that Russia is ready to continue gas exports to Europe via Ukraine after 2024, when the current agreement for the passage of gas expires, but only if there is demand for gas in Europe and if the route is economically viable.

The tensions between Russia and Ukraine come at a pivotal time for many European countries that have turned to natural gas to help them bridge their transitions from fossil fuels to wind, solar and other clean energy sources.

To counter the Russian buildup, diplomatic proposals focus on sanctions that could curb energy trade. 

This could result in billions of investment losses and jeopardize oil and gas contracts, especially for countries that rely more on Russian gas than others, such as Germany and Italy.

After meeting with German Chancellor Olaf Scholz in Moscow on Tuesday, Putin said the Nord Stream 2 gas pipeline was a "purely commercial" project that would enhance Europe's energy security.

The $11 billion pipeline, which faces strong opposition from the United States and some European countries, was completed last September, across the Baltic Sea from Russia to Germany, but is stalled pending approval from regulators in Germany and the European Union.

"This is one of Europe's largest infrastructure projects, which aims to significantly enhance energy security on the continent," Putin said.

"I said more than once that this project is purely commercial and there are no political considerations or any political overtones."

Nord Stream 2 will double the current annual capacity of the existing Nord Stream pipeline, across the Baltic Sea, to 110 billion cubic meters of gas, or more than half of Russia's current gas exports via pipelines to Europe.

But both projects are designed to circumvent Ukraine, a major route for Russian gas exports to Europe, which would deprive Kiev of billions of dollars in toll revenue.

Post a Comment

Previous Post Next Post