Bad news for Putin: How the EU is getting rid of Russian gas

The coming weeks will be significant for Europe in addressing the issue of "de-Russification" of gas supplies

By: Mykhailo Gonchar, Oksana Ishchuk, Igor Stukalenko

This article was written for website of the Mirror Weeky (Dzerkalo Tyzhnia), where it was originally published. 

 

Russian fossil fuels are becoming increasingly toxic amid the Putin regime's war crimes in the war against Ukraine.

Statements about the need to abandon Russian oil and gas are heard even by those who until recently spoke of "reliable Russian partners", "effective joint business", construction of "purely commercial" offshore gas pipelines and gas liquefaction facilities in the Arctic. However, at the same time, we are watching Putin's Trojan horse, Orban, torpedo the EU's oil embargo during internal discussions. As a result, the sixth package of sanctions may be without it or with a very time-consuming process with numerous exceptions that may offset its effect.

What is the state of affairs with gas in the seventh package?

Awareness of the threat of energy dependence

The pumping of the EU, especially its largest economy, Germany, with "cheap gas" from Russia has led to excessive dependence on one source, which is now evident both economically and politically. Arguments about the dangers of such dependence have not been accepted until recently. And explanations about the harmfulness of Russian gas pipeline projects, the main purpose of which was the unarmed occupation of Europe, were rejected as Russophobic. Like 40 years ago, when a prophetic caricature appeared in the Chicago Sun-Times in 1982 (!) with the German question "Why so much noise around a simple pipeline?"

The EU's position is currently undergoing dynamic change. Russia's outright blackmail of the EU is finally opening the eyes of European politicians who, since February 2014, have questioned Russia's nature of the "conflict in and around Ukraine." On February 24, 2022, with the beginning of a new wave of Russian aggression against Ukraine, Brussels spoke of the need for radical measures. "By the end of the year, we can replace 100 billion cubic meters of gas imported from Russia. That's two-thirds of what we import. This will put an end to our over-dependence," said Frans Timmermans, vice-president of the European Commission in March.

The Kremlin's demand for ruble payments, the cessation of gas supplies to Poland and Bulgaria, threats to cut off supplies to other EU countries, and the destruction of Ukraine's gas infrastructure prove to the EU that the European Parliament's April 7 resolution must be complied with. And it provides for an "immediate full embargo on Russia's imports of oil, coal, nuclear fuel and gas."

The need to get rid of Russian gas in the European energy balance is becoming an increasingly acute problem, which can be solved through:

  1. increase in imports of pipeline and liquefied gas from other (non-Russian) sources;
  2. reduction of total gas consumption (where possible).

As early as March 3, 2022, the International Energy Agency (IEA) with the participation of the European Commission presented possible steps to reduce the EU's dependence on Russian gas imports.

First of all, it is recommended to refrain from concluding new and prolonging existing contracts for the import of Russian gas and to reverse the transition from natural gas to coal and petroleum products in the generation of electricity. Such a replacement as a temporary measure would make it possible to quickly abandon large volumes of Russian gas, although it increases harmful emissions.

The temporary transition from gas to coal and oil products, according to the IEA, would reduce the need for Russian gas to generate electricity by about 28 billion cubic meters.

Some increase in pipeline gas supplies is possible from Norway and Azerbaijan, as well as from the Netherlands. For this purpose it is necessary to use free pipeline capacities, to improve the summer schedule of maintenance of gas pipelines. Imports from other regions require time and investment in gas infrastructure.

Increasing the supply of liquefied gas is a quick way to replace Russian raw materials. The EU already has LNG regasification facilities that can accept more than 200 billion cubic meters of gas per year. Although there are some infrastructure constraints on imports from individual LNG terminals to other European countries, the main thing that is needed is new contracts to import additional LNG in the face of significant competition for resources on the world market.

Dialogue with producers on increasing imports to the EU is already intensifying. The United States is working to provide at least 15 billion cubic meters of LNG for the EU market by 2022, with an expected increase in the future. Experts from the Centre for Global Studies Strategy XXI  have been writing about the need for a kind of LNG analogue of the Berlin Airlift of 1948-1949 since the autumn of 2021, when Russia launched a special operation to escalate the price on the EU gas market.

Additional generation from new renewable energy projects in 2023, including a € 3 billion grant program to install solar panels in households, will help reduce gas consumption by 6 billion cubic meters per year.

According to the IEA, maximizing nuclear and biogeneration is a quick way to reduce gas consumption. The return to operation of nuclear reactors in the near future after maintenance and safety testing will increase nuclear generation. And the temporary postponement of the closure of nuclear power plants in Germany, according to IEA estimates, could reduce demand for Russian gas by 12 billion cubic meters per year.

Public support for the strategic decision to abandon Russia's energy is important. Encouraging the population to temporarily reduce the regulated temperature in buildings is another way to act quickly. According to the IEA, lowering the average heating temperature by one or two degrees will reduce the use of Russian gas by 10 or 20 billion cubic meters per year, respectively.

The logic of accelerating the achievement of climate goals

The European Commission is preparing a detailed plan to avoid dependence on Russia and the maximum substitution of Russian gas. EU Commissioner Kadri Simson said on 5 May at the opening of a new gas pipeline between Poland and Lithuania: "We are in the last weeks of preparing the REPowerEU plan, which will be published by the end of May to fully control our energy future. "

Finally, there are reports that the final version of REPowerEU will be presented on May 18. Aimed at:

  • increase to 45% (now 40%) the target of the share of "green" energy in the EU energy balance for 2030;
  • reduce energy consumption by 13% (it was 9%) compared to 2020 estimates;
  • strengthen the use of renewable energy sources and energy saving measures;
  • diversify energy import sources and increase investment to obtain gas from non-Russian sources, including pipeline and LNG infrastructure, and investment in the oil infrastructure of countries that are currently unable to obtain non-Russian oil;
  • increase production (up to 10 million tons) and imports (up to 10 million tons) of "green" hydrogen;
  • promote the Green Deal, which will save 97.7 billion euros on procurement, including 80 billion euros on gas, 12 billion euros on oil and 1.7 billion euros on coal.

It will be clear in a few days what the final version of the plan to abandon Russian energy will look like. But the time factor is of special importance for Ukraine. Every day the aggressor receives huge funds, which he spends on the war. However, the logic of the EC is somewhat different. The European Commission is guided not so much by the logic of wartime as by the logic of accelerating the achievement of the EU's climate goals.

Last year, the EC proposed raising the EU's renewable energy target to 40% by 2030 from the current 32%. The proposal is part of a package of climate legislation introduced in July 2021 aimed at reducing EU greenhouse gas emissions by at least 55% by the end of the decade. Now, in the context of Russian aggression, the Commission is considering ways to speed up these plans by making the abandonment of Russian gas a focal point for fossil fuel withdrawal in general to achieve climate goals.

Of course, the prospects for the transition to clean renewable energy are important, but giving up Russian fossil fuels must be accelerated, because the cost of procrastination is tens of thousands of lives, hundreds of thousands of Ukrainian deportees forcibly deported to Russia and new billions in Kremlin aggression!

However, the shredded and urbanized European politicum resists, acting in its inherent style of "pragmatism." The indicator is the growing number of companies that have opened ruble accounts with Gazprombank for Russian gas purchases.

"The sudden cessation of supplies of Russian natural gas could provoke a recession in Germany, comparable to the economic crisis of 2020 and 2009, if not worse," - such and similar conclusions of various centers of expertise are currently spreading in the EU. Germany's gross domestic production is projected to fall by 3-8%. Goldman Sachs estimates that a full embargo on Russian gas could cut eurozone GDP by 2.2% this year. Is it okay that Ukraine is losing almost half of its GDP?

European Parliament President Roberta Mezzola has spoken openly in her dialogue with climate activists. She said Germany should target Germany because the EU banned Russian gas imports, as the German government was heavily influenced by industry lobbyists and stuck in a money-focused technocratic debate instead of prioritizing saving lives.

It seems that German wartime morality for the EU is immoral comfort and the pocket of the burgher über alles. That is why Russia is developing a gas attack on the European Union, feeling its internal weakness. Therefore, Gazprom does not use the opportunity to transfer transit volumes from Sokhranivka to Sudzha, despite the fact that the technical capacity of Sudzha is more than sufficient to continue transporting contracted volumes of gas. The military logic of "squeezing Europe" dictates that the Kremlin stop it altogether, despite imminent lawsuits.

However, bad news awaits Putin. He has already angered even his loyal Austrians, who are threatening to confiscate the gas storage facility in Salzburg if Gazprom does not fill it. And German Chancellor Scholz is increasingly taking into account the proposals of his deputy Robert Habek to radically reduce gas imports from Russia and its de-Russification. Next is Italian Foreign Minister Di Mayo, who, in the context of European discussions on the oil and gas embargo against Russia, is proposing that the EU Council abandon the principle of consensus, which allows states to use veto power to block a decision that everyone else agrees with.

The coming weeks will be significant for the EU in deciding where to put the coma in response to the problem with Russian gas: "You can not refuse to buy." Probably without the "American cowboy" transatlantic baton, wandering "European cows" will search for a long time and are unlikely to find consensus with Putin's Trojan horses like Orban.



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