ENERGY SECURITYIf Russia Turns Off the Tap: LNG Could Boost European Energy Security
Europe’s gas reserves are at their lowest in years with winter demand not yet over. As the Ukraine crisis escalates, raising fears over Russian supply, could liquefied natural gas (LNG) fill the gap?
The true scale of Europe’s energy crisis hit home last month when Commerzbank published data showing the current stockpile of natural gas across the European Union.
“Current inventories are about 47% of full capacity,” Bernd Weidensteiner, senior economist at Commerzbank in Frankfurt, told DW back in late January. “Normal for this time of the year is about 60%…so we are significantly lower.”
Indeed, a Commerzbank graphic posted to Twitter shows that, in previous years, EU inventories have ranged from 60% to more than 85% in January.
Moscow, which supplies about 40% of Europe’s imported gas, is accused of using its energy exports as leverage in the ongoing Ukraine crisis, a country through which much of the Russian gas transits.
A war between Ukraine and Russia has become increasingly likely after Russian President Vladimir Putin ordered Russian forces into eastern Ukraine and formally recognized two regions in the country that are held by Russian separatists.
Moscow, which supplies about 40% of Europe’s imported gas, is accused of using its energy exports as leverage in the ongoing Ukraine crisis, a country through which much of the Russian gas transits.
A war between Ukraine and Russia has become increasingly likely after Russian President Vladimir Putin ordered Russian forces into eastern Ukraine and formally recognized two regions in the country that are held by Russian separatists.
In another sign of Europe’s energy vulnerability, the US government held talks recently with several international energy firms to discuss contingency plans for delivering gas to Europe if Russian supplies were disrupted, Reuters news agency reported on Saturday.
Citing two US officials and industry sources, Reuters said US State Department officials had approached the companies to ask where additional supplies might come from if needed.
With global supplies tight at present, the officials were told that there is little gas available to substitute large volumes from Russia, the industry sources said.
Without other natural gas or LNG exporters stepping up, Europe may struggle to compensate for any temporary lack of Russian supplies in a worst-case scenario, Weidensteiner warned.
Fall back on coal?
“You can ramp up coal power stations instead, but the environmentalists will not like that,” Weidensteiner said. “But that really is the only possibility in the short term.”
Putin has insisted that the opening of the new Nord Stream 2 gas pipeline from Russia to Germany would help to calm Europe’s energy crunch.
The pipe, which runs under the Baltic Sea, was finished late last year but has yet to receive its operating license from Germany. Reacting to Russia moving troops into Donetsk and Luhansk in eastern Ukraine on 22 February, German Chancellor Olaf Scholz announced his government’s decision to halt approval procedures for the Nord Stream 2 pipeline.
Nord Stream 2 faces resistance from the US and several European countries including Poland and Ukraine, which say it will further increase Russia’s leverage over the continent and reduce transit fees earned by Ukraine for gas to pass through existing pipelines.
Weidensteiner insisted that an easing of the crisis isn’t dependent on the opening of Nord Stream 2.
“Russia has the possibility to deliver more gas through the existing pipelines if it wanted to,” Weidensteiner said. “That might have something to do with the game that Mr Putin is playing. It might also have something to do with supply issues in Russian gas fields. But it’s unclear.”
Nik Martin is freelance journalist. This article is published courtesy of Deutsche Welle (DW).
