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Europe Considers Alternatives to Natural Gas from Moscow, Ukraine


Natural gas supplies to European countries were severely disrupted during the recent price dispute between Russia and Ukraine. But, experts say there are ways Europe can minimize the effects of a natural gas shortage.

Many analysts say the recent gas crisis between Moscow and Kyiv has starkly shown how dependent Europe is on natural gas coming from Russia and transiting through Ukraine.

Europe receives about a quarter of its natural gas through Gazprom, the Russian gas monopoly. Eighty percent of the gas it ships to the West passes through the same pipelines that supply Ukraine. During the Kyiv/Moscow dispute, gas supplies to 18 European countries were severely disrupted during one of the coldest winters in years.

Robert Legvold from Columbia University, says this latest crisis might spark - once again - a key discussion among the European Union's 27 members.

"Whether they can have a common energy policy that creates a united front when they face something like this event - and they have not been able to do that," he said. "The central Europeans, the Poles in particular, have been pushing for a very hard line, a united policy that would treat this almost as a security issue - and the Germans have not been willing to get behind that."

Experts say the recent disruption of natural gas deliveries to Europe has renewed interest in the so-called Nabucco pipeline that would bring gas supplies from the Caspian Sea, bypassing Russia and Ukraine.

The 3,300-kilometer pipeline would bring gas from Turkey to Austria via Bulgaria, Romania and Hungary. But experts say this will not address Europe's gas needs immediately, since construction is expected to start in 2010 and the pipeline would be operational only three years later.

Katinka Barysch, with the London-based Center for European Reform, hopes the recent gas crisis will galvanize European leaders.

"We have been thinking for quite awhile how to reduce our dependence on Russian gas," she said. "And this energy diversification agenda has actually made very little headway since Russia first cut off the gas to Ukraine in 2006. So hopefully this latest crisis will focus some minds in the European Union - and we'll make some progress there."

Barysch says there are ways to address Europe's energy concerns.

"The first thing that can be done relatively quickly is that we need to build more connections between our national gas markets," she said."At the moment, the 27 countries are almost like little gas islands and the problem with that is that it is then very difficult - if there's a gas shortage in one country - to send over gas from another. And these interconnections between the national markets, they haven't been built. Hopefully that will happen soon. We need more LNG terminals for liquefied [natural] gas that can be shipped by ships, by tankers. And we need to look at alternative sources of power, in particular renewable energy and also nuclear power."

The latest crisis between Ukraine and Russia was resolved after each party signed off on a pricing agreement good for 10 years. Officials from both countries said the pact shows Moscow and Kyiv can be reliable gas suppliers for a long period of time.

However David Marples, from the University of Alberta in Canada questions the reliability of Russia and Ukraine.

"Maybe Europe will look more to the nuclear power option or it may look for an alternative route from Russia or it may look for an alternative supplier - so it's one of three possible grounds or maybe all three will be tried at some point," he said. "But I think the Europeans are just sick and tired of relying on the transit of Russian gas through Ukraine which is clearly a problem every single year or every other year. And if your business partners are unreliable, then people will change them and I think that's going to happen."

Many analysts say while it is essential for Europe to reduce its natural gas dependency on Russia and Ukraine, it will take time to do so. And in the meantime, they say Europe will still be subjected to disruptions in service if there is another crisis between Moscow and Kyiv.

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