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Page added on June 8, 2018

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Europe is still addicted to Russian gas

Public Policy

Try as it might, Europe just can’t dump Russia.

President Vladimir Putin was given a warm welcome in Vienna on Tuesday, the 50th anniversary of Austria becoming the first western country to import Soviet gas during the Cold War.

It’s a rare visit: The European Union imposed sanctions on Russia over Moscow’s actions in Ukraine in 2014, and has condemned its connection to the poisoning of former Russian spy Sergei Skripal in the United Kingdom.

“It is unusual for any European leader to receive President Putin for a state visit in the capital given the current tensions between Russia and Europe,” said Kristine Berzina, senior fellow at The German Marshall Fund of the United States.

But the hostility ends when it comes to energy, as European leaders are well aware that millions of homes would be without heating if Russia turns off the gas taps.

Imports from Russia are rising

The European Union imports 69% of its natural gas, according to the European Commission. The latest available data shows 37% of the imported gas comes from Russia, about 33% from Norway, and 11% from Algeria.

And while the European Union vowed to cut its dependency on Russian gas after the crisis in Ukraine, Russian exports to Europe have risen to record levels in the last two years.

Austrian imports of Russian gas nearly doubled in the first quarter of 2018, compared to last year.

“There are many reasons for this, namely the decline of production in the Netherlands, the fact that some [liquified natural gas] developments have been delayed, and also the fact that Russian gas is very competitive in terms of price,” said James Henderson, director of the Natural Gas Research Programme at the Oxford Institute for Energy Studies.

“In reality, Russian gas is the best option,” he added.

Related: OPEC and Russia to pump more oil ‘in the near future’

A number of EU countries, particularly those closest to Russia, are still almost completely dependent on Moscow for their gas.

What’s more, much of Russia’s natural gas is pumped through Ukraine, a risky route given the conflict between the two countries.

Russia needs Europe, too

baumgarten austria natural gas
A gas hub in Baumgarten in Austria.

Russia has in the past used Ukraine’s dependency on its energy as a way of exerting pressure on the country. Some European leaders are worried that Russia could adopt the same strategy towards the European Union in retaliation for sanctions.

“But this has not really happened,” said Marco Siddi, senior research fellow at the Finnish Institute of International Affairs.

“Sixty-seven percent of Russia’s tax revenues comes from energy exports, Russia needs this trade even more that the European Union,” he added

Plans for a new gas pipeline that would bypass Ukraine have been in the works for years, but Europe is deeply divided over the project.

Opponents say the Nord Stream 2 pipeline would only increase the European Union’s dependence on Russian energy. But Germany and some other countries argue that it would give Europe more energy security.

“The political weight that is given to the gas relationship differs from country to country,” said Berzina. “I would argue in Austria, and in Germany … the economic ties around energy are given outsized political weight.”

Dependent for decades

Still, the European Union has taken some steps to wean itself off Russian gas. It has invested in liquefied natural gas import terminals in Poland and Lithuania, making it possible to use other suppliers.

American producers have been trying to export more natural gas to Europe, but they mostly haven’t been able to offer prices that can compete with Russia.

Europe has also built better pipeline links between nations, so it can send gas back and forth where needed, while keeping prices competitive.

However, Europe is likely to remain dependent on Russian gas for decades to come.

“Europe is a major energy importing region. There aren’t many options apart from reducing gas usage overall,” said Henderson.

CNN



111 Comments on "Europe is still addicted to Russian gas"

  1. JuanP on Tue, 12th Jun 2018 12:39 pm 

    Hares are a native pest in Uruguay, too, because all their predators were hunted to extinction. Down there we hunt them after dark using spotlights to blind them and shooting them using .22lr rifles. The government pays a reward.

  2. GregT on Tue, 12th Jun 2018 1:39 pm 

    “Mr prick”

    Name calling.

    “Lol, got the dumbass attention.”

    Childish rhetoric.

    “to get him all stirred up”

    Delusional accusations.

    Nothing more can be expected from you Davy.

  3. GregT on Tue, 12th Jun 2018 1:45 pm 

    “Your stupid article means nothing here in the country.”

    It isn’t my article Davy, and calling the Missouri Department of Conservation stupid, doesn’t exactly add anything more to your already complete lack of credibility.

  4. Anonymouse1 on Tue, 12th Jun 2018 3:05 pm 

    Greg, the exceptionalturd does not have to move anywhere if he prefers to live in a hermit-like, brutal dictatorship that monitors, censors and controls its serfs every thought and action.

    He lives in the uNited SnAkes of duhmerica.
    It has all his police state suppression of free speech and dissent needs, in one convenient corporatocracy.

    Of course, he would like imagine this forum run along the same lines as uS media, or uS gov’t run their own propaganda machines, with the exceptionalturd the one in charge naturally. The top turd as it were. Since it is not and he is not, a recurring feature of his insane rants, is to attack facts presented by others that he find objectionable. Which is just about any fact that collides with his beloved uS, israel first(only) world view.

  5. Davy on Tue, 12th Jun 2018 4:00 pm 

    LMFAO, I flushed a covey of ugly canadians!!

  6. GregT on Tue, 12th Jun 2018 4:32 pm 

    “I flushed a covey of ugly canadians!!”

    Tell everyone Davy;

    In your deluded sick and twisted little mind, what does a flock of birds have to do with individuals commenting on an open unmoderated internet discussion forum?

  7. MASTERMIND on Tue, 12th Jun 2018 4:42 pm 

    The Republican Party has sacrificed all their core beliefs for Trump: Family values, free trade, defending our allies, vigilant defense against hostile undemocratic states, keeping deficits low. They’ve strip mined the very bed rock of their identity for the worst man ever elected to this office. When his administration is over all they will have left is their fearful nativism and cynicism.

  8. GregT on Tue, 12th Jun 2018 4:54 pm 

    “The Republican Party has sacrificed all their core beliefs for Trump”

    Both Trump, and Hilliary, are signs of a nation gone completely bat-shit insane. I mean seriously, out of 325 million people, that’s the best the US can come up with?

    The cream of the crop.

  9. MASTERMIND on Tue, 12th Jun 2018 5:13 pm 

    Greg

    To be fair, Hillary was the most experienced candidate to ever run for president..She just has a god awful personality..I think the dems really wanted the first female president and got ahead of themselves after they got the first African American president elected..And this might not sound PC, but the first female president needs to be at least somewhat attractive for most men to vote for them.

  10. Makati1 on Tue, 12th Jun 2018 5:15 pm 

    Guys, Davy has no ammunition to protect his deluded support of the terrorist government he tries to defend. The Us has no good points left to support his claim. none. It is fast sliding into the 3rd world.

    The Great Leveling his masters are causing is becoming more and more evident. Stump is the wild bull in the china shop. Crashing sounds are all around him. (TPP, NAFTA, NATO, etc.) Must be very frustrating and all Davy can do is try to bully and deny.

  11. Makati1 on Tue, 12th Jun 2018 5:23 pm 

    MM, ALL of the current government “leaders” are mafia thugs, Immoral, bought and paid for leeches. There is no “Republican or Democratic parties. The distinction disappeared in everything but name long ago.

    Hillary should be in jail, not running for office. Likely Trump also, if the truth be known. But “truth” is also absent in present day America.

    The Us military is led by politicians in uniform, not admirals and generals. It’s ALL about money and power. Logic and common sense are long gone in the Us.

    If you think the Us is not a 3rd world banana republic, you need to open your eyes and get some historical education. It is obvious from outside the box.

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