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Page added on September 21, 2014
Sapping Europe’s Energy Security
The European Union’s energy security is under threat — one of its largest suppliers of natural gas has gone rogue. If Vladimir V. Putin’s efforts to destabilize Ukraine had culminated in an invasion, up to 15 percent of Western Europe’s total supply would have been immediately cut off.
Ukraine has the world’s largest gas-transit system. Even if the risk of a conflict there eventually dissolves, Mr. Putin’s Kremlin still presents the European Union with a major energy security problem. The European Union needs to develop emergency plans that focus on quick replacement of lost energy sources — and long-term strategies that free it of dependence on Russia.
In all, Gazprom provides 27 percent of Europe’s gas supply. Fifteen percent via Ukraine, and the rest through the Nord Stream pipeline under the Baltic Sea and the Yamal pipeline through Belarus and Poland. That 15 percent is much more significant than it might appear because some European Union member states, such as Bulgaria, Romania and Slovakia, are largely isolated from the rest of the market and would have difficulty replacing any losses quickly. Moreover, supplies cannot easily be redirected to the Yamal and Nord Stream pipelines. Even if that were so, they would not be able to replace all 80 billion cubic meters transited across Ukraine in 2013.
Russian gas supplies to Europe have always been based upon mutual dependency. But given the annexation of Crimea, the threat to Ukraine and the prospect of further aggression, mutual dependence is no longer a reliable principle for the European Union to count on. An aggressive Russia may begin to see natural gas more as a political lever than a source of revenue. During his annual phone-in program last month, President Putin himself pointed out that 2013 budget revenues from oil were $191 billion, whereas gas revenues were only $28 billion. This willingness to use European gas supplies as a political lever will have only been reinforced by the China-Russia gas agreement announced last week, which provides the Kremlin with an alternative customer for Russia’s huge gas supplies.
In the short-to-medium-term there are only a few options for new supplies. The largest new source for Europe in the next five years is likely to be from the Trans-Anatolian and Trans-Adriatic pipelines running from Azerbaijan’s offshore Caspian fields. Construction of the network, which would bring 10 billion cubic meters of new gas into Europe every year, is scheduled to begin next year and it can always be expanded. The European Union, with American support, would need to negotiate with Azerbaijan and Turkmenistan to gain access to further Caspian offshore resources and to Kurdish northern Iraq. An additional 10 billion cubic meters from any of these sources could undermine Gazprom’s pricing power and market dominance.
Complications from other potential sources abound: The Cyprus conflict and continuing tensions between Israel and Turkey mean that there is little hope of significant gas supplies from the east Mediterranean region before 2025. American liquid natural gas derived from fracking is unlikely to reach European shores in large quantities much before the middle of the next decade.
To obtain significant new energy supplies in the midterm, the European Union has three major options.
The easiest — and potentially most polluting and controversial — is to make a dash for coal. There is plenty available from America, due to its displacement by shale gas. Coal-fired power stations that have been progressively taken out of service under a European Union directive to shut down the most polluting coal-fired power stations could be refurbished and brought back online. France and Britain, for instance, are in the process of closing down between approximately 3 to 6 gigawatts of coal-fired capacity. (Average British electrical power consumption in 2012 was 35 gigawatts.) Across the European Union, emergency reactivation of coal-fired power stations would add significantly to Europe’s supply options. There would be tremendous political opposition but it could be overcome if the public can be convinced of its urgency.
The second option, also politically challenging, would be to reverse the trend against nuclear power, particularly in Germany, where Chancellor Angela Merkel has made the decision to close the country’s nuclear power sector. This too, is a matter of convincing wary citizens of its necessity.
The third and most green option would be to develop both domestic shale gas production and wind power. Both these sources face significant permitting and planning restrictions. But the European Union and its member states could opt for streamlined procedures on the grounds of energy security.
There is an understandable reluctance in parts of the political and business establishment to disrupt economic ties in a period of economic austerity. There is also the belief that, just as the Soviet Union did not disrupt energy supplies to Europe during the Cold War, the Russian Federation would not do so now. Though those views are understandable, they do not take account of Mr. Putin’s penchant for regional destabilization to meet his own domestic ends. The Russian Federation sees benefits in a destabilized Europe. This may take the form of “soft” leverage — low gas prices for those who take a pro-Kremlin line, while squeezing those states it finds less amenable.
In any case, Europeans can no longer rely on the comfortable principle of mutual dependence. The European Union has to focus sharply on supply security and take the right steps to protect all Europeans, and its own energy future.
Alan Riley is a professor of energy law at The City Law School at City University London.
18 Comments on "Sapping Europe’s Energy Security"
Feemer on Sun, 21st Sep 2014 4:54 pm
I definitely agree that Europe needs to lessen its dependence on Russian gas, but this article made a mistake. Coal and Nuclear power-and wind- would only make up for electricity currently being generated by gas. The main use of natural gas in Europe is for heating and industry, and to a lesser extent, electricity. More wind power seems like the most sensible thing to do, but I also read that if the EU raised its efficiency and insulation up to 40%, it would reduce imports of Russian gas by 25-30%. Increasing insulation and efficiency is the easiest solution to this problem. While doing that, they should also make more wind turbines and biomass to gas plants. All the food waste in Europe could supply a lot of natural gas, expensive yes, but it would be domestic and renewable.
Davy on Sun, 21st Sep 2014 5:39 pm
Feemer this sounds great and should be pursued but diminishing returns are creeping in both for the capital available for such a major undertaking and the times needed to transition. It is the same old story for so many other efforts “no money no time”.
Makati1 on Sun, 21st Sep 2014 8:33 pm
Stopped reading when they called Putin a ‘rogue’. Obviously a propaganda piece. No facts just fancy.
I’m surprised that the West is still drinking the anti-Putin cool aid after all the Western lies became obvious to anyone with two operating brain cells. ‘PUTIN’ is obviously the flavor of the year in the US.
The Syraq flavor is now 2nd but the new flavor, China is still being formulated for presentation as soon as they can figure out how to get China to finance it’s debut using USD.
redpill on Sun, 21st Sep 2014 9:11 pm
Mak, you’re reply to my question about cashing in S.S. benefits was reasonable and thought out. I’m still paying into the Ponzi and don’t expect to receive the benefits my parents did.
But that leaves me scratching my head as to why you take such an off-putting demeanor when you post on articles. The value that can be created on a blog like this comes through encouraging discussion. The West isn’t perfect, and neither is current leadership in Moscow.
Be well.
Plantagenet on Sun, 21st Sep 2014 10:42 pm
Europe not only needs a supply of energy that doesn’t come from Russia—they need a CHEAP supply of energy to keep their economies competitive with the US and China. Right now the youth unemployment rates in the stagnant economies of the EU are a disgrace.
dissident on Sun, 21st Sep 2014 10:57 pm
Any piece that ignores the obvious and brazen support from NATO for the overthrow of the duly elected leader of Ukraine is simple garbage. According to Pew and Gallup polls from the last three years, 51% of Ukrainian citizens did not want to join NATO. But somehow everyone is supposed to now believe that they were all 100% in favour of joining. Half the country does not get to decide for the other half. There was due process before, but after the February 21st coup there was nothing but dictatorship.
The west is afflicted with the Putin derangement syndrome. Every complex issue is trivialized on one man. This is nothing more than the two minutes’ hate from Orwell’s 1984. The people of the Donbas (Donetsk and Lugansk) have a right to self-determination. They were robbed of representation by the coup regime, which is composed of western Ukrainian ethnic chauvinists and Bandera lovers. If Putin helps these people, then all power to him. He is doing the right thing.
NATO, on the other hand, is supporting a military suppression campaign against these people where the regime forces indiscriminately shell and rocket villages, towns and cities. Over 4,000 civilians have been killed and 830,000 (according the UN) are now refugees in Russia.
Makati1 on Mon, 22nd Sep 2014 12:02 am
redpill, I enjoy pushing against the “exceptional’ patriots here who put down the rest of the world as if it wasn’t ‘up to par’. The USSA has been destroying the rest of the world since at least WW2 and deserves some negative (factual) press. I enjoy providing it.
If there is only positive comments here about the ‘exceptional’ country, then it is nothing more than an ass kissing contest. Real debate involves both sides of the issue. Most articles here are presented in a US positive mode, and no negatives are even mentioned. That is not reporting, that is an arm of the Ministry of Propaganda. Feel good ‘news’ supporting our blind view of the world.
I read most everyone’s comments, even the long, poorly written, ones. They are often more interesting and educational then the Articles. After a few years, you get to know the personalities behind them and their education or lack thereof.
I’m retired and spend a few hours everyday reading news from around the world. I know most countries lie, and none are perfect, but one country is so blatant that the leader cannot speak without lying and contradicting previous stories. That the rest of the world is now recognizing them for what they are is a good thing.
Thanks for the complement and sorry for the rant. Have a great day!
Makati1 on Mon, 22nd Sep 2014 12:08 am
dissident, you might be interested in this article:
“Obama Is Defeated in Ukraine. Status-Quo Truce-Lines Agreed.
Posted on September 21, 2014 by Eric Zuesse.”
Russia’s Leader Putin Rejects Ukrainian Separatists’ Aim to Become Part of Russia.
But Separatists Will Almost Certainly Receive Reconstruction Aid from Russia.
http://www.washingtonsblog.com/2014/09/obama-defeated-ukraine-status-quo-truce-lines-agreed.html
Davy on Mon, 22nd Sep 2014 6:22 am
Diss, what is your take on the Russian anti-war street protests? This must be another anti-Putin Nato instigated action No doubt……… I find it hard to believe we are dealing with the devil incarnate and angels like you would leave me to believe. This is what it sounds like the anti-westerners here are trying to relate. The separatist are freedom fighters and Russia a benign country selflessly seeking only the best for this region and world. Very few wars have a side that can be considered above the nasty and dirty wars involve. Both sides here are in the dirt. I agree the Nato supported Kiev regime is dirtier and nastier than the other side. But come on please Diss, any praise for czar Putt and his rebel cabal is getting into the same bed as the western MSM is in.
ulenspiegel on Mon, 22nd Sep 2014 8:18 am
P wrote:”Europe not only needs a supply of energy that doesn’t come from Russia—they need a CHEAP supply of energy to keep their economies competitive with the US and China.”
What a crap. Not energy prices are the problem (see Germany, Austria, Switzerland), but other structural problems. OTOH countries with low efficiency (like the USA) need lower prices to be competitive.
Feemer wrote: “More wind power seems like the most sensible thing to do, but I also read that if the EU raised its efficiency and insulation up to 40%, it would reduce imports of Russian gas by 25-30%.”
Correct. Onshore wind is cheap, insulation even cheaper. Actually, 40% better insolation would kill 20% of NG demand or 60% of imports from Russia (in Germany and some other countries).
GregT on Mon, 22nd Sep 2014 9:29 am
Excellent comment by Dissident,
The violent and bloody coup in Kiev was fomented by Hillary’s girl, Victoria Nuland and the US State department. This was clearly in violation of the Budapest memorandum which states:
“Russia, the U.S., and the UK confirmed, in recognition of Ukraine becoming party to the Treaty on the Non-Proliferation of Nuclear Weapons and in effect abandoning its nuclear arsenal to Russia, that they would:
3: Refrain from using economic pressure on Ukraine in order to influence its politics.”
Russia under Putin may not be angelic, but in this instance, the US makes Russia look like the Christ Child.
Kenz300 on Mon, 22nd Sep 2014 11:49 am
Energy security can not be secured by importing it.
Every country needs to develop a plan to become more energy secure and economically secure. That means providing locally generated distributed energy sources like wind and solar which also happens to provide local jobs that the economies need.
Biofuels can now be made from waste or trash. I wonder how many landfills there are in Europe? These all can be converted to produce energy, biofuels and recycled raw materials for new products. There is something to be said for self sufficiency and not needing to rely on imports for basic needs.
Russia is not a reliable partner. It is past time to implement plans to reduce reliance on them.
Rita on Mon, 22nd Sep 2014 12:38 pm
Europeans should just use heavier clothing inside their homes and offices. It is not that bad once you get accustomed to it.
JuanP on Mon, 22nd Sep 2014 1:18 pm
“Ukraine has the world’s largest gas-transit system.”
And that, people, is why we are there. The Russians controlled it, and we don’t want them to.
JuanP on Mon, 22nd Sep 2014 1:31 pm
“An aggressive Russia may begin to see natural gas more as a political lever than a source of revenue.”
And a paranoid, defensive nuclear armed Russia would use all means available to it to defend itself, if it felt it was necessary, including using oil and gas exports as a weapon to destroy the global economic system, if pushed hard enough.
We should all here in the West leave the Russians alone and retreat from Ukraine, Georgia, Moldova, Iraq, Syria, and everywhere else and focus on solving our problems at home rather than creating more problems abroad.
We are hopeless.
Davy on Mon, 22nd Sep 2014 2:03 pm
I read somewhere yesterday relating Russia’s budget gets 27Bil from gas revenue and $119bil from oil. In a call in program Puttin wisely expressed the flexibility Russia has with gas as a lever against sanctions. Don’t hold me to the above numbers but you get the point. Russia is in the driver seat.
JuanP on Mon, 22nd Sep 2014 2:12 pm
Yes, Davy, Russia’s income from gas exports is 20% of its income from oil exports to the best of my knowledge.
The Europeans have more at stake than the Russians if their gas trade is disrupted, IMO, though Russia would suffer very significantly in the short term.
But sooner or later the Europeans will run out of gas and they should start preparing for that day now. Less dependence on Russia is good for Europe.
Kenz300 on Tue, 23rd Sep 2014 11:31 pm
Buy a bicycle and worry less about the price of oil…..
————————-
Bike Friendly Cities, The Journey to School – YouTube
https://www.youtube.com/watch?v=4-XenU6UEp8