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EU Russian Gas Imports May Plunge 25% By 2020

Published 04/09/2014, 11:45 AM
Updated 04/09/2014, 12:30 PM
EU Russian Gas Imports May Plunge 25% By 2020

EU Russian Gas Imports May Plunge 25% By 2020

By Reuters - Europe is stitching together a patchwork of measures that could reduce its natural gas imports from Russia by over a quarter by the end of the decade as a result of the Ukraine crisis, halting Moscow's tightening grip over the region's energy.

Russia's seizure of Ukraine's Crimea region has chilled political relations between Russia and theEuropean Union, prompting governments across the bloc to look at ways to cut demand, find alternative supplies and switch to other fuel sources such as coal and renewables.

Reuters calculations suggest these steps could slash imports from Russia by around 45 billion cubic meters (bcm) by 2020, worth $18 billion a year, equivalent to a quarter of what Russia currently supplies.

Past hopes of loosening Moscow's grip have been dashed, not helped by Germany's decision to give up on nuclear power, with Russia's share of EU supplies rising 10 percentage points to over a third since 2010, and before the current crisis Russia's gas share in Europe was expected to remain stable at current levels.

The crisis in Ukraine has shaken policymakers awake across Europe's capitals, and several emergency meetings over energy security have been held in the past weeks.

"We are serious about reducing our energy dependency ... We need a new way to do energy business," said European Council President Herman Van Rompuy, who represents EU governments in Brussels.

At the forefront of these plans are Germany and Italy, Russia's biggest gas clients in the EU, but also Poland.

German Chancellor Angela Merkel said in late March that "energy policy will have to be newly considered".

Germany is Europe's biggest gas user and Russia's most important customer, using over 80 bcm of gas a year and meeting around a third of its demand through imports from Gazprom, a share that has steadily risen over the past 20 years.

 

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