How Europe hopes to wean itself off Russian natural gas

International efforts to sanction Russia for its invasion of Ukraine have amplified a long-standing dilemma for the European Union: its attempts to wean itself off coal have made it more dependent on Moscow for natural gas. That reliance has made him reluctant to support the kind of tough sanctions on energy exports that some say are essential to thwarting Russian aggression.

As part of its efforts to reduce greenhouse gas emissions, the EU has reduced its dependence on coal, the combustion of which produces more carbon dioxide than oil or natural gas.

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Natural gas has helped fill the void as a renewable energy supply, such as solar and wind, but it is not enough to fully replace reduced coal use. This has led to increased use of natural gas to generate electricity, power factories and heat homes.

Some countries, such as Germany, have also decided to phase out nuclear energy, a process that accelerated after the Fukushima disaster in Japan in 2011. France, on the other hand, maintains a robust nuclear power program, which which has allowed it to be less dependent on fossil fuels.

Share of energy consumption by fuel type

Share of energy consumption by fuel type

Share of energy consumption by fuel type

Share of energy consumption by fuel type

Share of energy consumption by fuel type

Overall, the EU obtains around 40% of its natural gas imports from Russia. Germany, the bloc’s top importer, depended on Russia for more than two-thirds of its natural gas in 2020. Italy, the bloc’s second-largest buyer, received almost half of its imports from Russia.

Main suppliers and buyers of natural gas in the European Union, 2020

353 billion

Cubic meters

total

353 billion

Cubic meters

total

353 billion

Cubic meters

total

353 billion

Cubic meters

total

353 billion

Cubic meters

total

Russia’s invasion of Ukraine has led to calls to punish Moscow by sanctioning its energy exports. But given the EU’s reliance on Russian natural gas, the bloc’s options have been limited.

In a sign of a growing push for independence, however, Germany last month halted certification of the Nord Stream 2 gas pipeline, which was set to double its imports of Russian natural gas.

As the need to reduce dependence on Russian energy becomes more pressing, European countries have sought ways to improve the use of alternative sources. One of them is liquefied natural gas. LNG is ordinary natural gas that has been cooled in a liquid state to minus 260 degrees Fahrenheit (minus 162 degrees Celsius). In the liquid state, the fuel occupies about 600 times less volume, allowing it to be transported efficiently to places not served by pipelines.

LNG accounted for around a quarter of EU gas imports in 2020, with the rest transported by pipeline. While Russia dominates pipeline trade, other countries such as the United States and Qatar supply larger shares of LNG.

Share of EU natural gas imports,

by delivery method and source, 2020,

in cubic meters

Share of EU natural gas imports,

by delivery method and source, 2020,

in cubic meters

Share of EU natural gas imports,

by delivery method and source, 2020,

in cubic meters

Share of EU natural gas imports, by delivery method

and source, 2020, in cubic meters

Share of EU natural gas imports, by delivery

method and source, 2020, in cubic meters

To increase LNG imports, European countries will need to build facilities to receive the gas, as well as find new sources to obtain it.

LNG requires specialized infrastructure, including plants to cool the gas, double-hulled ships to transport it, and “regasification” facilities on receipt to transform the liquid into a gaseous state. All of this technology adds to the price of LNG, which has always been more expensive than regular gas.

Germany recently approved plans to build two new LNG terminals, but their completion could take more than three years. Many of the bloc’s existing LNG terminals are depleted.

In addition to the technical challenges of receiving LNG, there is the question of where it will come from. Australia, Qatar and the United States are the largest LNG exporters in the world. But much of their supply now goes to Asian importers, such as China and Japan. Europe would have to compete with these countries for a reliable supply.

Top Global LNG Suppliers and Buyers, 2020, in Cubic Meters

488 billion

Cubic meters

total

488 billion

Cubic meters

total

488 billion

Cubic meters

total

488 billion

Cubic meters

total

488 billion

Cubic meters

total

Since the start of the Ukrainian crisis, Europe has succeeded in the short term in diverting American LNG shipments to its ports. But EU countries will likely need to sign longer-term gas contracts to lock in demand and help suppliers secure financing to build more gas liquefaction terminals.

The United States has been steadily building LNG facilities since 2016 and is expected to have the largest export capacity in the world by the end of the year, according to the US Energy Information Administration. Additional facilities are planned until 2025, some of which could help meet Europe’s growing LNG needs.

However Europe proceeds, given the challenges of energy independence, weaning itself off Russia will not be easy.

Write to Josh Ulick at [email protected]

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