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Can Europe cope without Russian gas?

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“The EU and Russia are mutually dependent on one another respectively as buyer and supplier of energy.”

The Russian invasion of Ukraine, which started on February 24, and the following sanctions imposed by the European Union seem to be threatening the future supply of energy – in particular of gas – leaving everyone with doubts and questions. In the event of less – or even zero – natural gas coming from Russia, is Europe going to survive? Could alternative ways to supply gas be enough? What are the contingency plans available?

The Soviet Union began developing oil and gas pipelines to supply satellite states, mainly through Ukraine. Up until the 1960s and 1970s, the majority of European countries didn’t need Russian gas because they were able to produce their own natural gas supplies,  through the Netherlands. It was only in the 80s that, despite President Reagan’s opposition to a new gas pipeline from Siberia to Western Europe, Germany, France and other nations decided to sign contracts with the Soviet Union, in order to bring the West closer to the Kremlin. 

Nowadays, Europe imports 90% of its gas and 40% of it comes from Russia, making it the largest supplier of natural gas for European countries (especially for Central and Eastern European countries), only followed by Norway and Algeria, which respectively supply 30% and 10% of gas. In particular, according to the International Energy Agency, in 2021 the EU imported around 45% of gas from Russia and it has been noted that the flows have stayed steady in the last few weeks after the start of the war.

In the aftermath of the Russian invasion in Ukraine, the European Union kept its word and imposed a series of sanctions on Moscow. Diplomatic measures, blocking Russian banks from the SWIFT, as well as individual restrictive measures were introduced on members of the State Duma of the Russian Federation and on Putin and Lavrov as well. Also, the EU decided to halt economic relations with the non-government controlled areas of Donetsk and Luhansk and to restrict Russia’s access to the EU’s capital and financial markets and services.

What is worrying is that Western States have also expressed their intention of distancing themselves from Russia and not rely on its gas supplies anymore.

The liberal party at the European Parliament, Renew Europe, has recently called for a complete economic blockade, aiming at banning all imports, including oil, gas and investments. On Tuesday, the EU presented a plan to reduce its dependence on Russian energy and to stop buying fossil fuel before 2030. Within the plan, the European Commission also pledged to reduce its purchases of gas by two-thirds before the end of 2022. 

Distancing itself from Russian energy and finding alternatives, now more than ever, would give Europe the possibility of acting more freely and stop being so dependent on the Kremlin. 

So, what are the alternatives available for European countries? And, more importantly, can they work?

The president of the EU Commission, Ursula von der Leyen, said in a statement that it is important for countries to have contingency plans to respond to a possible gas supply crunch. The European Commission proposed a plan called REPowerEU that aims at increasing the resilience of its energy system and at diversifying gas suppliers; the EU is also working to boost the use of biomethane and renewable hydrogen as well as to increase LNG imports, which would be crucial. In recent months, the Commission had the chance to engage with new and different partners around the world like the United States, Qatar, Egypt, Azerbaijan, Nigeria and Japan about increasing gas and liquefied natural gas (LNG) deliveries. The latter announced that it will divert some LNG cargoes to Europe.

REPowerEU would also create a Hydrogen Accelerator that would develop integrated infrastructure, storage facilities and port capacities. According to the Commission, by 2030, 25-50 bcm of Russian gas could be replaced by 15 million tons of renewable hydrogen.

In addition to the plan published by the European Commission, the International Energy Agency presented “A 10-Point Plan to Reduce the European Union’s Reliance on Russian Natural Gas”, proposing a series of immediate actions needed to reduce countries’ reliance on Russian gas. 

What emerged from this plan is that, first of all, EU countries could diversify their gas suppliers with new contracts, taking advantage of the soon-to-be expired long-term contracts with Gazprom. Another option could be replacing Russian supplies with alternative sources of gas, involving imports from other countries like Azerbaijan and Norway. According to the IEA, as for the EU Commission plan, the increase of LNG imports could be key. Furthermore, it would be important to accelerate the deployment of new wind and solar projects. Relying on more renewable resources could thus bring down gas demand and use. However, in contrast with the EU Commission’s plan, the IEA recommends States to keep existing nuclear plants in operation, despite several reactors are scheduled to shut down by the end of 2022.

Consumers are also advised to speed up the replacement of gas boilers with heat pumps, because they can offer a very efficient way to heat homes, replacing boilers that use gas and other fossil fuels. According to the plan, this could save an additional 2bcm of gas use within the first year. 

Single States have already announced internal plans to try and become more independent.

Germany, one of the biggest importers of Russian gas, decided to stop certification of the NordStream 2 pipeline and to diversify its energy supplies by commissioning to buy 1.5 billion euros of non-Russian LNG. The German government has been also forced to reconsider its coal exit and the transition toward carbon neutrality for now, because it has to be ready to reactivate old coal power plants, to make sure the country has the needed electricity, in the event that Russia halts exports.

Similarly, in a recent speech President Macron said that France will have to go back to the nuclear industry, an energy source that provided at least 70% of the country’s electricity since the ‘70s. He also outlined an ambitious plan to build more than a dozen new nuclear plants by 2035. 

Another country ready to end its reliance on Russia is Italy. On Tuesday, the country’s major manufacturer and distributor of electricity and gas, Enel Energia, announced its plan to resume a liquefied natural gas plant project in Porto Empedocle, in the south of Italy. According to the Energy Transition Minister, Roberto Cingolani, Italy can easily become independent of Russian gas imports within 24-30 months. In addition to this, the country is trying to boost bilateral energy cooperation with Qatar, a LNG-rich country.

In spite of the disruptions caused by the present conflict in the energy field, there seem to be different alternatives that have the potential to become effective solutions. 

Nevertheless, the possible alternatives available for European countries to end their reliance on Russian gas are complicated and it will take time to develop all the plans outlined during the last few days. With the coming spring, the potential short-term impact of an interruption to exports from Russia has eased for now, especially because the demand for gas-fuelled heating usually declines from May to September. But if the halt of Russian gas is prolonged into next winter, States will need to be able to cope. The processes entailed in building renewables and all the needed infrastructure, or electrifying heating are costly and time-consuming and these solutions cannot be implemented overnight. The plans released by the European Commission and the International Energy Agency should be applied sooner rather than later, ideally, “in the coming months” as recommended by the IEA. 

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