After 27 EU member states replaced 80% of Russia’s Natural Gas supply, there has been a significant shift in natural gas dependency.
Prior to the release of this information, there was widespread scepticism across the continent, with Germany’s economic minister warning of “catastrophic” industrial shutdowns, fraying supply chains, and mass unemployment. The president of France has urged citizens to turn down the heat. Spain questioned why countries that had not become dependent on Russian gas should bail out neighbours who had previously lectured them on fiscal responsibility (How Putin’s Plans to Blackmail Europe Over Gas Supply Failed European Union The Guardian, n.d.).
To make matters worse, former President Dmitry Medvedev gleefully predicted that Europeans would be “freezing in their homes” because they hadn’t considered the consequences of backing Ukraine. “The cold is coming,” he said menacingly last June (How Putin’s Plans to Blackmail Europe Over Gas Supply Failed European Union The Guardian, n.d.).
However, facts have shown that within eight months of Russia’s invasion of Ukraine, the bloc of 27 European countries replaced approximately 80% of the natural gas it used to draw from Russian pipelines.
Most of these 27 nations have increased energy-saving policies and built new Liquefied Natural Gas infrastructure.
In addition, Chevron Corp CEO Mark Wirth stated that the world’s natural gas supply has fundamentally changed for the long term, with less reliance on Russia.
He was also quoted as saying, “Clearly, Europe’s over-reliance on Russian gas is very visible today,” Wirth said. “And I don’t think the Europeans want to go back to that. So, they’ll accelerate some of their efforts on renewables”. “However, as you do so, you realize how important baseload power is. To balance out the growth in renewables with combined-cycle gas power generation, there have been a lot of imports, infrastructure built, and more on the way…” (Europeans ‘Do Not Plan to Return’ to Russian Natural Gas, Says Chevron CEO – Natural Gas Intelligence, n.d.).
The Netherlands, the EU’s largest natural gas producer, has reduced reliance on Russian gas. They also rely on 15-20% of their gas supply in the Groningen field by contrasting LNG imports with storage and regasification units in Rotterdam and Eemshaven.
However, because of its reliance on Russian energy exports, neighbouring Germany must endure most of it. Still, they managed to use 14% less Russian gas in 2022 than in average years from 2018 to 2021.
“I was worried last autumn that some European governments would respond to the crisis by prioritizing their own energy supplies and stopping sharing with their neighbours, which would have been economically and politically disastrous,” said Simone Tagliapietra, an energy expert at the Brussels-based thinktank Bruegel. (How Putin’s Gas Supply Blackmail Plan Failed European Union the Guardian, n.d.)
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Even Mark Wirth agreed The Eastern Mediterranean “is a beautiful gas resource,” Wirth said. “It’s helped to decarbonize Israel’s power grid, which was 100% coal-fired a decade ago and is now between 70% and 80%. Natural gas-fired air quality is better. Greenhouse gas emissions are much lower. And gas is being exported to neighbouring countries Jordan and Egypt. (Europeans ‘Don’t Intend to Go Back’ to Russian Natural Gas, Says Chevron CEO – Natural Gas Intelligence, n.d.).
Mark Wirth also felt Floating LNG could be a better system in the coming years.
What is the Russian Energy Economy Game Plan now?
According to estimates from the Centre for Research on Energy and Clean Air (CREA), Russia has made more than $315 billion in revenue from fossil fuel exports around the world since the invasion began about a year ago, with nearly half ($149 billion) coming from EU nations (The Countries Buying Russian Fossil Fuels Since the Invasion, n.d.).
They are approximately $12 billion from Germany for natural gas (26 billion non-renewable), but Turkey, a non-EU member, imports approximately $25.9 billion.
As Russia approaches Pariah state status, EU bans have reduced daily fossil fuel revenues by nearly 85%, from $774 million per day in March 2022 to $119 million on February 22nd, 2023.
(n.d., Countries Purchasing Russian Fossil Fuels Since the Invasion).
Although India has increased its fossil fuel imports from $3 million per day on the day of the invasion to $81 million per day as of February 22nd of this year, this increase falls far short of filling the $655 million gap left by EU nations’ reduced imports. Similarly, despite the fact that African nations have more than doubled their Russian fuel imports since December last year, Russian seaborne oil product exports have fallen by 21% since January, according to S&P Global (The Countries Buying Russian Fossil Fuels Since the Invasion, n.d.).
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