News / Economy

European Leaders Seek Ways to Curb Dependence on Russian Gas

Map shows gas pipelines supplying energy to Ukraine, Europe
Map shows gas pipelines supplying energy to Ukraine, Europe
Reuters
— European leaders will seek ways to cut their multi-billion-dollar dependence on Russian gas at talks in Brussels on Thursday and Friday, while stopping short of severing energy ties with Moscow for now.

Russia's seizure of Ukraine's Crimea region has revived doubts about whether the European Union should continue to rely on Russia for nearly a third of its gas, providing Gazprom with an average of $5 billion per month in revenue. Some 40 percent of that gas is shipped via Ukraine.

EU powerhouse Germany is among those with particularly close energy links to Russia and has echoed comments from Gazprom, Russia's top natural gas producer, that Russia has been a reliable supplier for decades.

Russian supplies of gas to the EU were disrupted in 2006 and 2009, but only because of knock-on effects when Moscow cut off Ukraine for not paying its bills. Although those incidents resulted in EU attempts to diversify its energy sources, contracts to the bloc have always been honored.

EU officials said the current Ukraine crisis, however, had convinced many in Europe that Russia was no longer reliable and the political will to end its supply dominance had never been greater.

“Everyone recognizes a major change of pace is needed on the part of the European Union,” one EU official said on condition of anonymity.

“At the back of people's minds, there will always be the doubt that if the relationship goes sour, Russia has that weapon and it's not something it should have,” another official said, referring to Russia's option of severing supplies.

A draft document prepared ahead of the summit calls on the European Commission, the EU executive, to present by June a comprehensive plan to reduce EU energy dependence.

As alternatives to imported gas, the Brussels talks will debate the EU's “indigenous supplies”, which include renewable energy and shale gas.

They will also underline the need for energy efficiency and to build better cross-border links to share resources, control costs and develop EU capacity to pump gas to Ukraine should it need help.

A British discussion paper, circulated among member states, lists a range of options, including intensifying talks on the export of Iraqi gas via pipeline to Europe and examining how to “facilitate” gas exports from the United States as part of trade talks with the EU.

EU officials said they expected the issue to be raised during U.S. President Barack Obama's visit to Brussels next week, although analysts caution that any U.S. gas exported would be more likely to head to Asia rather than Europe because prices there are higher.

Forty-year bond

Keen to underline its continued relevance, Gazprom last week issued a statement to mark the 40th anniversary of supplying Russian gas to Germany under long-term contracts to utility E.ON . Russian gas is sent directly to Germany via the Nord Stream pipeline, specifically built to bypass Ukraine.

E.ON is among the utilities whose business models have been shaken by an EU shift to green energy. The company says the grid needs gas-fired generation to balance intermittent solar and wind.

One of the many questions is the extent to which indigenous shale gas can replace imports.

The signs so far are that public opposition and Europe's different geology mean it cannot match the United States' shale gas revolution, which has lowered energy costs there. Even in the oil and gas industry, many are cautious about the prospects for EU shale gas.

That leaves EU industry smarting at what it sees as a competitive disadvantage, when the Ukraine crisis is likely to inflate energy prices further. It is seeking help for energy-intensive industry to manage costs, which it says have been driven up by subsidies to increase the share of green energy.

The renewables lobby says the real driver of energy costs is imported fossil fuels, on which Europe spends more than 400 billion euros ($557 billion) per year.

“The EU is criticizing Russia's invasion of Crimea while pouring money into Russian coffers for gas imports,” said Thomas Becker, CEO of the European Wind Energy Association, which is calling for a tougher goal on use of renewable energy.

But as coal-dependent Poland for one opposes an early agreement on 2030 climate and energy policy, this week's talks are not expected to get anywhere near a deal on that.

EU Climate Commissioner Connie Hedegaard said only that the talks should send “a strong signal.”

The draft summit document says EU member states should aim to make a final decision on the new policy framework “as quickly as possible and no later than October 2014”.

That will disappoint those who say a decision is urgently needed to drive investment in low-carbon energy and to reduce fossil fuel imports, as well as to settle the EU negotiating position ahead of a U.N. climate change deal meant to be sealed late next year.

So far, the European Commission has suggested 2030 policy should include a 27 percent EU-wide goal for renewables as a proportion of energy use and a 40 percent cut in carbon emissions versus 1990 levels.

That compares with an existing target to cut carbon by 20 percent by 2020, which the European Union has almost achieved, as well as a goal, binding on each member state, to get 20 percent of energy from renewables, which is also within reach.

You May Like

Koreas Mark 61st Anniversary of War Armistice

Muted observances on both sides of heavily-armed Demilitarized Zone that separates two decades-long enemies More

Judge Declares Washington DC Ban on Public Handguns Unconstitutional

Ruling overturns capital city's prohibition on carrying guns in pubic More

Pricey Hepatitis C Drug Draws Criticism

Activists are using the International AIDS Conference to criticize drug companies for charging high prices for life-saving therapies More

This forum has been closed.
Comment Sorting
Comments
     
by: Jean-Marc from: France
March 20, 2014 11:13 AM
Moving away from Russian gas supply is a much needed decision from the EU, and it is long overdue. Long term deep cut in trade with Russia is the only form of economic sanctions the illegitimate dictator who currently rule Russia and its corrupt government will understand. Europe should resume trade with Russia as soon Putin resigns from power but not earlier.

In Response

by: Anonymous
March 20, 2014 5:31 PM
Europe will fail without Russian trade. Putin is standing up for Russia amid all the western propaganda. It is fair that the west can act above the law as they please?

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Students in Business for Themselvesi
X
Mike O'Sullivan
July 26, 2014 11:04 AM
They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.