“We have to prepare for a suspension of supplies.” The European Commissioner for Energy, Kadri Simson, warned, Tuesday, May 3. On the 69th day of the occupation of Ukraine by the Russian army, the European Union refuses to pay for its gas purchases from Russia in roubles, as demanded by Mouscou. In retaliation, the EU, which also intends to adopt a sixth set of sanctions against the regime of Vladimir Putin, sexpects a pure and simple stoppage of natural gas deliveries – as already happened on April 27 in Poland and Bulgaria.
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Concerning Russian oil, the time has not yet come to the cut, but the Twenty-Seven are considering an embargo on imports, which would force distributors to go elsewhere to get supplies. But where ? Franceinfo reviews the options available to European countries in terms of natural gas and petroleum products.
Other gas-producing countries can increase their deliveries
To continue to supply European homes and industries with natural gas, “Fortunately, the Europeans have other pipelines”highlighted Patrice Geoffron, professor of economics at Paris-Dauphine University, interviewed by franceinfo. Because if Russian gas represented, in 2021, around 45% of European imports, according to the European Commission (link in English), Norway (23%) or Algeria (12%) supply non-negligible volumes to EU countries. And these countries are able to replace “in part” Russia, assures the energy specialist.
“These producers have a direct line with their customers in Europe, says Patrice Geoffron. Norway is finalizing a new gas pipeline to Poland. Algeria delivers to France thanks to a pipe that passes through Italy. The volumes that these countries can deliver, however, remain well below what Russia currently supplies. “Placed end to end, these extensions reach 10 billion cubic meters”, evaluates the expert. A far cry from the 155 billion cubic meters that Russia delivered to Europe in 2021, out of the 400 billion consumed by Europeans that year, according to the European Commission.
“We will get out of this addiction”, however wants to believe Thierry Breton, European Commissioner for the Internal Market. At the microphone of France Inter, on April 30, he also assured that the EU had“a battery of solutions over the year”including the extension of some nuclear power plants to relieve gas-fired power plants. “Without that, there would be a real problem in the short term, that is to say for next winter”warns Patrice Geoffron, who expects slowdowns in the industry, a major consumer of gas. “We risk having to ration, unheard of since the oil shocks of the 1970s.”
Europe can import liquefied natural gas from more distant countries
To avoid such a scenario, the Old Continent is already turning to America, the Gulf countries and Oceania, leading producers of liquefied natural gas (LNG) which can be delivered by sea and by truck. At the end of March, US President Joe Biden promised the European Commission (document in English) that the United States would deliver to Europe no less than 15 billion cubic meters of LNG in anticipation of next winter. Large deliveries could also take place from Qatar and Australia, the first and second exporting countries of this precious liquid.
This serious alternative to the gas transported by the Russian gas pipelines is however likely to have a very high cost. “The demand for LNG has recently exploded, especially in Asia, where we are actively seeking to replace coal”, recalls Patrice Geoffron. Far from being the only interested party, the European bloc will necessarily have to put its hand in its pocket to secure its imports. “We are sure to pay more for LNG than in peacetime, notes the specialist, and then this gas is not always free, many contracts already exist and it is then necessary to have the capacity to outbid.”
Last option on the table: biogas, also known in its purified form, biomethane. A source of energy produced in Europe, but which currently represents only a tiny fraction of the EU’s energy mix, less than 1% of the energy produced, according to the specialist in the sector. The war in Ukraine could, however, give a boost to the European project “RePowerEU” (in English), which aims to produce 35 billion cubic meters of biomethane by 2030. Announcements from the European Commission on this subject are expected for the end of May.
A big uncertainty about Russian oil
Russia exports two-thirds of its oil to the European Union. In 2021, it supplied 30% of the crude and 15% of the petroleum products purchased by the EU and the bill amounted to 80 billion dollars, quantified the head of European diplomacy, Josep Borrell. But all the countries of the Union are not concerned in the same way, and the Twenty-seven remain for the time being divided on the sanctions to be adopted.
The most dependent countries, like Slovakia or Hungary, would in fact pay a high price for an embargo and are clamoring for it to be progressive. “If the EU is ready to grant exemptions to these two countries, it is a safe bet that the Twenty-Seven will agree by the end of the week on a gradual embargo on oil”analyzed Tuesday at the microphone of franceinfo Olivier Dorgans, lawyer specializing in economic sanctions.
Then charge less dependent countries to source crude oil and refined products elsewhere. Norway, Kazakhstan and the United States, which each accounted for 8% of European imports in 2021 according to the Commission, thus supply almost as much oil to EU countries as Russia. But ask them to deliver more “has every chance of causing a global price increase”, warns Patrice Geoffron. In Europe, fossil energy is therefore likely to soon rhyme with soaring prices, rationing, “or both”, alert the specialist.