INTERPRETER: Why does Europe oppose the ban on Russian energy?

Shocking pictures from the Ukrainian city of Bucha and accusations of war crimes in Russia increase pressure to impose additional sanctions on Moscow. The key potential target is Russian oil and natural gas and the $ 850 million that European importers pay for these supplies every day.

But this is not easy, given Europe’s dependence on Russian energy.

Western sanctions have so far been directed against Russian banks and companies, but have spared no oil and gas payments – a concession from the United States to keep European allies on board and to act as a united front.

Here are the key facts regarding the import of energy to Europe from Russia and whether a boycott is possible:

WHAT EXHIBITIONS ARE ON CINEMA?

The EU gets about 40% of its natural gas from Russia, which is used to heat homes, generate electricity and supply industry with both energy and key raw materials for products such as fertilizers.

As for oil, it is about 25%, most of which goes to petrol and diesel for cars. According to S&P Global analysts, Russia supplies about 14% of diesel fuel, and the shutdown could cause already high prices for truck and tractor fuels through the roof.

WHY CAN’T EUROPE REJECT RUSSIAN ENERGY LIKE THE US?

The United States imported little oil and did not import natural gas from Russia because fracking made it a major producer and exporter of oil and gas. Europe had oil and gas fields, but production declined, leaving 27 EU countries dependent on imports..

Of the 155 billion cubic meters of gas that Europe imports annually from Russia, 140 billion comes through pipelines crossing Ukraine, Poland and the Baltic Sea. Europe is seeking extra supplies on ships in the form of liquefied natural gas or LNG, but this cannot compensate for gas losses through the pipeline.

LNG is also much more expensive and suppliers are required. While some European countries are well connected to LNG terminals, such as Spain, and new projects are in the works in places like Greece and Poland, the infrastructure does not exist for supplies to the rest of Europe. It can take years to build terminals and pipelines to import LNG to connect gas to places where it is needed.

As dependence on Russia varies, it is harder to reach an agreement to boycott the EU. Lithuania said on Saturday it had stopped importing Russian gas and will only rely on the LNG terminal, which it launched in 2014. Poland, which has spent years searching for alternatives, says it will not renew its contract with Russian gas at the end of the year, in addition to measures to ban Russian coal and oil.

Germany, the continent’s largest economy, still gets 40% of its gas from Russia, even after it has reduced its dependence. It aims to stop imports of Russian coal this summer, oil imports by the end of the year and largely independent of gas by 2024, Economy Minister Robert Habeck said.

WHERE ELSE CAN EUROPE GET ENERGY?

He is working to move away from Russian gas as soon as possible, finding new sources, preserving and accelerating wind and sun. The European Union plans to reduce the use of Russian gas by two-thirds by the end of the year and withdraw from it long before 2030.

Apart from getting LNG from places like the United States and Qatar, Europe is seeking more gas from non-Russian pipelines from Norway and Algeria.

Butter is different in that it mostly arrives by ship. However, it would be difficult to replace Russian supplies with limited world markets. Withdrawing more than 2 million barrels a day from the market to Europe would push oil prices around the world. And Russia could try to sell oil to India and China, though earn less.

WHAT WILL HAPPEN IF EUROPE BANS RUSSIAN ENERGY?

Estimates vary, but the cut-off means a significant blow to the European economy. The ban could mean that governments will have to standardize gas among companies to protect homes and hospitals.

Manufacturers of metals, fertilizers, chemicals and glass have been hit hard. Even a partial gas cut-off for industry could cost “hundreds of thousands” of jobs, said Michael Vasiliadis, head of Germany’s BCE union, which represents workers in the chemical and mining industries.

“We are likely to continue to see resistance from Germany and some others, as they are simply much more dependent on Russian imports of oil, gas and coal,” said Craig Earlam, senior market analyst in the UK, Europe, Middle East and Africa. currency broker Oanda. “Forecasts of the impact of the embargo vary, but it will almost certainly lead the country to a recession.”

A group of nine economists from the US, UK and Germany said the embargo would mean significant economic costs for Germany, but it would be “clearly manageable”. The country has “experienced deeper recessions in recent years and recovered quickly,” including the 2009 global financial crisis and the pandemic recession, they said.

“Public fear of the catastrophic consequences of the energy embargo by lobby groups and affiliated think tanks does not meet academic standards,” the analysis said. on the political portal of the Center for Economic Policy Research voxeu.org.

WHAT ELSE COULD EUROPE DO?

Energy policy expert Simon Taliapietro and economist Guntram Wolf of the Bruges think tank in Brussels have proposed a tariff on Russian oil and gas imports to the EU. This will reduce Russia’s income, avoiding a serious blow to European growth, with a legal advantage if the contracts are intact. Last week, European leaders insisted that the same contracts protect them from demanding that Russia pay for gas in rubles.. Tariff money can be used to protect vulnerable households from rising energy prices.

While the army that invaded Ukraine has already been paid, the tariff will put the Kremlin in a “more difficult economic situation, in which they may have difficulty purchasing things from the outside world, including weapons, and paying salaries to the public sector,” he said. Taliapietra.

HOW DID EUROPE GET TO THIS?

Germany relied on natural gas in the transition from coal and after former Chancellor Angela Merkel closed the rest of the plant after the 2011 Fukushima disaster in Japan. Merkel stressed the diplomatic dialogue with Russian President Vladimir Putin during her 16-year tenure and stressed that even during the Cold War, energy supplies continued to come from Russia.

She also supported the Nord Stream-2 gas pipeline. from Russia, despite criticism, it would increase Germany’s dependence on Russia. Chancellor Olaf Scholz, Merkel’s finance minister, froze the project after the invasion.

Italy, another major EU economy, has grown heavily dependent on Russian gas over the years when it switched from coal. Italian officials say Russia supplies 38% of natural gas used for electricity and heavy industryincluding steel and paper mills.

Foreign Minister Luigi Di Mayo, who traveled to energy-producing countries in search of alternatives, told the ANSA news agency on Monday that “Italy cannot veto sanctions on Russian gas.” But Prime Minister Mario Draghi, who said last week that gas payments finance Russia’s war, did not touch on energy when he condemned images of bodies on Ukrainian streets.

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