News / Economy

Europe Looks to US, Qatar Gas to Reduce Reliance on Russia

Europe Looks to US, Qatar Gas to Reduce Reliance on Russiai
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Henry Ridgwell
March 21, 2014 1:13 AM
As Russia and the West enact tit-for-tat sanctions over Moscow's annexation of Crimea, European leaders meeting in Brussels are discussing ways to reduce the continent's dependence on Russian gas imports. Europe buys around 30 percent of its gas from Russia, and many EU leaders fear that trade gives Moscow too much leverage. Henry Ridgwell reports for VOA from London.
Henry Ridgwell
As Russia and the West enact tit-for-tat sanctions over Moscow’s annexation of Crimea, European leaders meeting in Brussels are discussing ways to reduce the continent’s dependence on Russian gas imports.  Europe buys around 30 percent of its gas from Russia, and many EU leaders fear that trade gives Moscow too much leverage.  

Engineers operate a shale gas facility in Pennsylvania - one of dozens of hydraulic fracturing or ‘fracking’ sites across the United States that have made it the world’s top natural gas producer.

Europe hopes this could be the long-term answer to countering its dependence on Russian gas.

European leaders want the U.S. to start shipping shale gas across the Atlantic as Liquefied Natural Gas or LNG.

At talks in Brussels on the proposed EU-U.S. free trade deal last week, EU trade commissioner Karel De Gucht said energy was high on the agenda.

He says Europe is too dependent on foreign countries for its energy needs, especially from Russia, and there is no easy solution.  But he says he will negotiate with the United States to import shale gas.

Analysts point to many obstacles. Transport costs mean the price of LNG is higher than Russian gas.

U.S. opponents of the idea say the cheap shale gas should not be exported because it gives American industry a competitive advantage.

Still, energy diversification is key to changing Europe’s geopolitical relationship with Russia, says Professor Alan Riley of City University London.

“Completing the single market in gas, and bringing gas from Qatar as LNG, potentially U.S. LNG over the next few years making its way across Europe, switching to coal," he said. "There’s a lot of use of coal now, U.S. coal, which has been displaced in the U.S. because of shale gas, pouring into Europe. There are lots of options."

Russia’s actions in Ukraine have taken Europe by surprise - and will likely intensify efforts to look elsewhere for gas, says Ian Bond of policy group the Center for European Reform.

“Also to look at other sources like Qatar and Algeria, so sources of Liquefied Natural Gas.  And maybe even in the slightly longer term to persuade the Germans to turn their nuclear power stations back on, which would sharply reduce the demand for Russian gas," he said.

In June last year Greece signed a deal to bring a pipeline from Azerbaijan’s gas fields into the European Union - providing a direct alternative to Russian imports. But the so-called Trans Adriatic Pipeline or TAP won’t come online until 2019.

The range of alternatives give Europe leverage, says Ian Bond.

“Russia depends very heavily on the revenues from the gas that it sells to Europe.  At least half of the national state budget comes from sales of hydrocarbons to Europe," he said.  "And although in the winter it would be true that Europe would freeze before Gazprom would go bankrupt, in the summer Europe has more levers."

But many analysts caution that price remains the deciding factor for many European gas buyers.  And Russia still offers the cheapest energy - even if Europe disapproves of Moscow’s politics.

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Comments
     
by: Godwin from: Nigeria
March 21, 2014 2:57 PM
Europe is talking about isolating Russia and placing trade embargoes, this has been the driving force behind formation of euro zone all along. It was also behind the desire to pick Ukraine away from Russia, so the talk about isolating Russia is not just coming to light, it has been in the works since the Euro-USA alliance before, during and after the fall of the Berlin Walls or end(?) or rather ceasefire of the cold war. Western Europe and USA have never loved Russia and using any guise to impose sanctions or whatever restriction is just being shy, undiplomatic or timid. We are hoping it's not going to end in smoking guns once again. But I don't think Russia feels threatened enough by European and/or USA sanctions, after all it should be used to being out there in the cold alone by now. So what happens if Russia wakes up tomorrow and marches into Ukraine to take it? Will and can Europe, and USA go to war?

by: Gennady from: Russia, Volga Region
March 21, 2014 10:25 AM
I wonder where Professor Alan Riley of CUL was earlier with his energy diversification plan. Hasn’t his brainwave come a little bit too late? Both sides of the Atlantic disapprove US shale gas import to Europe when taking into account the USA competitive advantage and more expenses to Europe. Alan Riley’s mentioning of coal sounds ridiculous, as if some deity has cancelled challenges of global warming and concerns originating from “dirty” coal. I don’t expect that the Germans will yield to the persuasion of turning on their nuclear station if they won’t ignore severe consequences of Chernobyl and Fukushima accidents. It looks like “ lots of options” isn’t that incouraging.

by: Igor from: Russia
March 21, 2014 3:27 AM
Dear all western partners, if you looked for altenative gas suppliers rather than Russia. Gas prices in your countries would surge and the living conditions of your people would decline sharply. Your economy would go down and down. The innocent people in your countries would suffer enough because of your stupid actions and they would never vote for you again. In response, Russia would sell gas ans oil to other markets such as China, India, asian and african countries.... at attractive prices. So think twice before making your decsions.
In Response

by: Keith from: USA
March 22, 2014 4:23 AM
@Igor
I agree with you that all this talk by the politicians only stirs things up. They do not have real jobs, so they make life harder for those who voted for them by letting ego based decisions drive things. We as a world need to stop all this stupidity and focus on solving the really hard problems before we go extinct as a species.

by: dave from: uk
March 20, 2014 7:35 PM
If we stopped burning gas just for heat we wouldn't need as much of it. Large heat pumps like the one in Drammen harvest heat from rivers and deliver it at 90C. www.tinyurl.com/quick-heat
In Response

by: Godwin from: Nigeria
March 21, 2014 3:03 PM
Let all of Europe relocate to Africa so they won't need gas for heating at anytime again. Of course they can go to hell altogether, for there, there's no need for heating

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