Russia is the European Union’s main supplier of natural gas, and Vladimir Putin has failed to deliver on promises for more transparency. The EU fears that Russia may use its monopoly as a weapon to interfere with Ukraine’s democratic elections next year. But now Europe must also watch out for American interests in protecting itself from Russian meddling.
Russia is a large country that has been around for a long time. Russia’s economy is also very strong, and it has a lot of natural resources. The U.S. would like to help Europe secure its gas supply, but the U.S. doesn’t have enough people or ships to do this on their own.
BRUSSELS— European officials are scrambling to secure the energy supplies they’ll need to keep their economies humming if hostilities in Ukraine jeopardize natural gas pipelines from Russia, and they’ve turned to the United States for assistance in locating alternative energy sources outside of Moscow’s control.
As Russia has positioned more than 100,000 soldiers near Ukraine in recent weeks, European Union energy officials have met with their American counterparts and are flying to gas suppliers such as Azerbaijan and Qatar to look for backup supply.
The European quest started in the autumn, when the worldwide economic recovery from the Covid-19 outbreak drove up gas and power rates. The attempts have stepped up in recent weeks, as Moscow’s escalation with Kyiv has forced European nations to consider the once-unthinkable possibility of a war disrupting Russian gas supplies, which account for around 40% of the 27-country bloc’s natural gas. Few authorities anticipate this to happen, despite the fact that enormous amounts of Russian gas are unlikely to be replaced in the near future. However, the threat has sparked a search for back-up supplies to protect an economy that can’t run otherwise.
Officials in the United States and Europe are now rushing to find short-term options to replenish dwindling stocks. More than a dozen tankers are on way from the United States to Europe, attracted by the EU’s high gas costs. According to oil analytics company Vortexa Inc, another 33 tankers that haven’t verified their destinations are also expected to travel there. If all Russian supplies were destroyed, “they would barely cover a percentage,” according to Clay Seigle, managing director of Vortexa.
Officials from the Biden administration have been holding marathon video calls with officials from around the world in recent days, attempting to persuade buyers in South Korea, Japan, and other countries that have already paid for their imports to allow the US to reroute those shipments to Europe, according to people familiar with the discussions. European officials have flown to Doha and Baku, Azerbaijan’s capital, to attempt to secure supplies.
Officials in the United States, Europe, and the Middle East have interpreted the initiatives as an attempt to diminish what has long been Moscow’s biggest leverage over Europe: nuclear weapons. The continent’s largest and most convenient gas supply comes from Russia, through a network of pipelines that run via Belarus and Ukraine. This gas is used to heat houses, create energy, and power industrial. Germany and Austria, for example, have long resisted switching to alternate, more costly gas supplies outside of Russia.
A 3.6 magnitude earthquake struck the Netherlands in 2012. Groningen, one of the world’s biggest gas fields, triggered a cascade of events that contributed to today’s astronomically high energy costs. Shelby Holliday of the Wall Street Journal explains. Sebastian Vega’s illustration
“This is just another excellent example of phony hysteria,” President Vladimir Putin’s spokesperson, Dmitry Peskov, said on Jan. 24 in response to reports that Moscow might restrict gas shipments.
At a time when supplies are few and costs are high, EU and partner authorities are looking for stopgaps. Russia has mostly refused to sell any gas beyond what its long-term contracts demand, upsetting purchasers who had hoped Moscow would be more accommodating. Beyond Russia, producers such as Qatar claim they are at capacity, with the majority of their liquefied natural gas shipments going to Asian clients. Qatar must also reassess its ties with Moscow, according to a top Qatari advisor.
“Politically, we are eager to assist both the US and Europe, but we cannot just walk away from our long-term obligations to Asia, even if only for a short time,” the advisor added. “The US and other European players will have to persuade a lot of people here.”
While the United States and other countries are physically capable of generating more natural gas, they are limited in their ability to transfer it outside. There are just a few LNG export facilities in the United States that can transform the gas into a liquid and transport it across great distances. As countries progressively recover from the epidemic and demand roars back, U.S. LNG export plants have been operating near capacity for months amid tightening supplies of the fuel throughout the globe.
Not all European countries are concerned in the same way that Washington and Brussels are. German authorities have said that they are not collaborating with the US on market actions to secure alternative gas supply and that the country’s supplies are safe.
Many officials in the United States and Europe believe Russia would not limit Europe’s supply dramatically because it would hurt Moscow financially and strengthen European political determination to pursue other gas suppliers. Unless there is a catastrophic break in economic relations, Russia is very set to remain Europe’s primary gas supplier. Even if gas stopped flowing tomorrow, experts in Germany believe the nation would be able to get through the winter by relying on reserves and, if required, rationing gas.
Officials from the EU, on the other hand, believe there is no space for complacency. Reduced Russian gas supply at a time when energy costs are high and inflation is high would be a further blow to the economy and consumers who are still recuperating from the plague. Europeans are particularly sensitive to gasoline costs, which are expensive in comparison to those in the United States due to taxation and restricted local supply. The yellow vest protest in France began in 2018 after President Emmanuel Macron proposed additional gasoline levies that would affect motorists. Elections are looming in France, Austria, and Hungary.
According to Gas Infrastructure Europe, an organization of enterprises in the industry, the EU’s gas reserves are already low, averaging approximately 42% of capacity. The reserves of Germany are significantly smaller. They cover around 20% of Europe’s yearly gas usage when they’re full.
“Every few years, when Russia and Ukraine clash, everyone in Europe is reminded uncomfortably just how reliant they are on the overland route of Russian gas,” said A. Wess Mitchell, a former assistant secretary of state for European and Eurasian Affairs who spent years trying to persuade his European counterparts to diversify their gas supply. “It’s rather astounding in hindsight.”
Following Russia’s 2009 cutoff of gas supplies to Ukraine, the EU began to make its continent-wide pipeline network more flexible, enabling gas to travel in numerous ways. However, the network still has flaws and is reliant on Russian supply.
Europe has appealed to Washington for assistance in coordinating the complicated global diplomacy required to reroute massive LNG supplies previously bought by US partners to Europe.
European policymakers are scrambling to locate short-term natural gas supply.
Michal Fludra/NurPhoto/Getty Images/Michal Fludra/NurPhoto/Getty Images
Officials in Europe think they could potentially increase the amount of gas piped from Azerbaijan to southern Europe through a pipeline that runs via Turkey. This would need the installation of more powerful pumps along the canal, which could be built swiftly provided European demand could be guaranteed. Kadri Simson, the EU’s energy commissioner, will be in Baku on February 4 for a gas conference.
Some observers doubt that the present enthusiasm for non-Russian gas will persist long.
“I’m not sure what’s genuine and what’s part of everyone’s mindset right now,” Aleksandra Gawlikowska-Fyk, head of the electricity sector program at the Warsaw think tank Forum Energii, said. “How much of this will go when the prices fall in the spring?”
According to one source informed on the preparations, Biden administration officials seek to obtain more than 10 billion cubic meters of LNG for Europe. Several experts predicted that the gas, which accounts for around 6% of the total yearly LNG spot market, would be difficult to come by.
American exporters, while eager to help, have told U.S. officials during talks that they are already sending as many cargoes as they can to Europe without breaking long-term supply contracts with other customers. Europe is already receiving 70% of America’s LNG cargoes, according S&P Global Platts. Further discussions on European supply will take place during an EU-U.S. energy meeting on Feb. 7, European officials say.
Closer to home, Algeria has recently begun pumping more gas to Spain, and Norway agreed in September to allow state-controlled company Equinor AS A to supply an additional 2 billion cubic meters over the next 12 months by increasing production in two large gas fields, according to a senior EU official. According to a senior EU official, European partners’ measures have included seeking more supplies or postponing scheduled maintenance work to guarantee that the enhanced supply reaches Europe soon.
Even if Europe is able to bring in backup LNG supplies, moving the gas throughout the continent would be a logistical nightmare. Spain has a large number of LNG port terminals but minimal pipeline links to the rest of Europe. Germany, the continent’s biggest economy, lacks the port infrastructure to import LNG, forcing it to rely on France, Poland, or other nations that have developed LNG terminals in part to lessen Russia’s dependency.
A considerable decrease in Russian gas supplies, according to a senior EU official, would force Europe to take extreme steps. This may involve governments extending the life of nuclear power facilities and possibly dramatically increasing the usage of coal, a carbon-intensive energy source that the EU had hoped to phase out gradually.
“We can only say, ‘We told you so,’” said Witold Waszczykowski, a former Polish foreign minister, whose country aims to be completely self-sufficient in Russian gas imports within a year. “It should’ve occurred a long time ago.”
—This paper was co-written by Summer Said, Benoit Faucon, Christopher M. Matthews, and Collin Eaton.
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