What it will mean for Europe to free itself from Russian energy

Europe has benefited from a supply of relatively cheap natural gas from Russia for decades.

Despite all the talk today about diversifying this supply, the reality is that it will not be easy to find alternatives.

It will be a multi-year mission.

Gazprom Germania, the German subsidiary of the Russian gas giant. Photo by John MACDOUGALL / AFP.

The continent imports about 40 percent of its natural gas from Russia.

That is a huge amount.

The liquefied natural gas of the global market would be the main substitute, but the competition it will be intense and prices are likely to rise and remain high.

Consumers will have to bear the burden.

However, even if an additional amount has to be paid for energy security, one of the added benefits could be a accelerated transition towards cleaner fuels.

The dominant position that Gazpromthe Russian-owned energy giant, as the region’s main gas supplier was causing problems even before the invasion of Ukraine.

The company’s decision to no longer offer gas on the day-ahead energy market (which refers to one-off deals rather than deliveries of gas under contract with set terms) in the fourth quarter of last year helped push prices up rapidly.

Now, Russia’s demand that customers pay for their gas in rubles It could imply that the gas cuts start from May, since some European countries reject this unilateral change of the terms of the contract.

The European Commission wants to cut two-thirds of its Russian imports by 2022 through alternative supplies and a general reduction in gas demand.

However, even a cursory analysis of this decision reveals that the short-term impact will be strong (for consumers not only in Europe, but also worldwide).

Some European politicians argue that this is the price to pay for upholding European values ​​in the face of Russian hostility.

The bottom line, however, is that a full embargo on Russian gas this year would lead to severe financial hardship for many countries on the continent.

There simply isn’t enough alternative gas available.

Even so, the European Union’s plan is ambitious; this year, search reduce more than 100 billion cubic meters of the 155 billion cubic meters of natural gas that Europe imported from Russia last year.

Regardless, European Union countries would still have to swallow their pride and buy about a third of what they buy from Russia now to run industries and keep the lights on.

How would this reduction be achieved?

Regarding supply, the main objective of the commission is to obtain 50,000 million additional cubic meters of liquefied natural gas.

That will be a difficult thing to achieve.

With new projects and a return to the supply market that was interrupted by technical and production problems in 2021, around 40 billion additional cubic meters should be available on the global market, but Europe will not be the only potential buyer.

Growing demand in Asia will continue to funnel liquefied natural gas eastward, meaning perhaps only 30 billion cubic meters will be available to Europe.

To get another 20 billion cubic meters, Europe will have to compete for them and that means two things: there will be higher prices and other countries will end up with less, so they will have to resort to fuels less clean like coal.

Europe also expects to receive 10 billion cubic meters through gas pipelines from places like Norway, Algeria and Azerbaijan.

This could be possible if gas field infrastructure maintenance is delayed and production is maximized, but it may only be a short-term solution.

At some point, the fields will have to be repaired, or the pipelines will reach full capacity, or both.

What’s more, the rebound in liquefied natural gas supply will slow down over the next two years.

Even though new supply has been promised, it will take years to develop these multi-million dollar projects.

The years 2023 and 2024 could be just as challenging, if not even more so than 2022, for gas supplies.

As a result of this, Europe will only get about half reduction of Russian imports through non-Russian gas suppliers, so gas consumption must also be cut.

The strategy of the European Union is reduce 38,000 million of cubic meters of consumption, which represents nine percent, during this year.

The strategy that the European Union uses to achieve this could have important long-term implications.

The main focus is on electricity providers, which would try to cut gas demand by 20,000 million cubic meters with the installation of a greater capacity of solar collection y wind.

Greater use of coal could also be a near-term necessity and is already happening in some countries, but the increased focus on renewables could hasten a shift to more carbon-free energy use across the region by 2030.

Indeed, some countries are also reconsidering their aversion to nuclear power, which was repudiated by many European nations after Japan’s Fukushima disaster in 2011.

This would not only advance European efforts towards energy independence, but also reduce emissions in line with Europe’s goals to achieve carbon neutrality by 2050.

Consumers are also being encouraged to use energy wisely. more efficient.

Lowering the temperature of thermostats across Europe by 1 degree Celsius would save an estimated 10 billion cubic meters of gas, according to the International Energy Agency, though success would also depend on how cold the following winter is.

Increasing the use of solar panels on roofs and installing heat pumps in homes can save another 4 billion cubic meters of gas, although the governments of the European Union would have to provide incentives for that to happen.

The European Union will also try to increase the production of biomethane (natural gas generated from waste) by 3.5 billion cubic meters, an increase of 120 percent compared to 2021.

This will be difficult to achieve, but record highs in gas prices should at least help encourage investment in a more expensive but greener alternative.

So while near-term prices are likely to be a hit to the pocketbook as Europe prepares to divorce its dependence of Russian natural gas, the European Union’s strategy may lead to deeper pockets in the long run.

As for morale, Europe will defend its values ​​and demonstrate its strength in the face of Russian aggression.

In addition, the emphasis on reducing demand for natural gas and accelerating green energy development will help Europe reduce its greenhouse gas emissions, an increasingly urgent imperative as the world continues to warm.

James Henderson is the chair of the natural gas program and director of the energy transition research initiative at the Oxford Institute for Energy Studies. He is also a visiting professor at Masaryk University in the Czech Republic and at the College of Europe in Warsaw.

c.2022 The New York Times Company

By Editor

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