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1. The EU can manage without Russian liquified natural gas

Author:
Ben McWilliams, Giovanni Sgaravatti, Simone Tagliapietra, and Georg Zachmann
Publication Date:
06-2023
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
The European Union has committed to eliminate all Russian fossil-fuel imports by 2027. Progress has been made, with sanctions on oil and coal already introduced. The glaring exception is natural gas, on which the EU has so far refrained from imposing limitations, owing to greater dependence on Russia. Nevertheless, pipeline gas imports have fallen by four-fifths following Russia’s weaponisation of gas supplies. However, Russia’s exports of liquified natural gas (LNG) to the EU have increased since the invasion of Ukraine. The EU needs a coherent strategy for these LNG imports. Our analysis shows that the EU can manage without Russian LNG. Anticipated impacts are not comparable to those felt in 2022 as Russian pipeline gas dried up. The regional impact would be most significant for the Iberian Peninsula, which has the highest share of Russian LNG in total gas supply. Meanwhile, the global LNG market is tight, and we anticipate that Russia would find new buyers for cargos that no longer enter Europe. We discuss the options available to the EU. Wait-and-see implies delaying any action until 2027, while soft sanctions would discourage additional purchases but not break long-term contracts. We argue instead for an EU embargo on Russian LNG, to reduce exposure to an unreliable and adversarial entity, and to limit the extent to which EU consumers fund the Russian state. The embargo may be designed to allow purchases only if they are coordinated via the EU’s Energy Platform, with limited volumes and below market prices. This could be accompanied by the implementation of a price cap on Russian LNG cargos that use EU or G7 trans-shipment, insurance or shipping services.
Topic:
European Union, Gas, Energy, and Green Economy
Political Geography:
Russia and Europe

2. The Strategic Repositioning of LNG: Implications for Key Trade Routes and Choke Points

Author:
Leslie Palti-Guzman and Marc-Antoine Eyl-Mazzega
Publication Date:
04-2023
Content Type:
Special Report
Institution:
Institut français des relations internationales (IFRI)
Abstract:
2022 saw the climax so far of the weaponization of energy. Following its geopolitical demise, Russia has undertaken its own gas amputation, moving from a super energy power status to a diminished role with uncertain prospects and only hard options left. Russia has cut off almost entirely pipeline gas supplies to the European Union (EU), first inflicting huge financial pain and collecting record high revenues, but then simply losing out its largest and best market with no realistic alternative, and no prospect of any significant return. However, the Kremlin could still further reduce some of the remaining pipeline gas or liquefied natural gas (LNG) supplies and thus cause some tensions in the markets. Russia also retains leverage on oil markets, where the Kremlin managed to cope with the embargo as well as the price cap and maintain the relationship with Saudi Arabia which drives OPEC+ decisions. Meanwhile, in 2022, the European energy system has managed to surprisingly adapt on the supply and demand side to the three shocks: the decoupling from Russian energy supplies, the hydropower generation crisis, and the French nuclear electricity crisis. Liquefied natural gas has made a comeback in Europe and has been a savior of industries, governments, and populations. The LNG corridor between the EU and the United States (U.S.) has become the most dominant LNG trade route in 2022. This came at a huge cost though – EU’s gas import bill soared ten times from 2020 and three times from 2021 levels. For 2023, the European gas balance is much more fragile, as the demand reduction potential has reached its limits, same for the ability to attract additional non-Russian exports to Europe, at a time when missing Russian volumes will probably reach 120 billion cubic meters (bcm), instead of about 77 bcm in 2022. More moderate price levels since November 2022 have clearly overshadowed this fundamental mismatch, especially as the weather has been mild and China was still struggling with the pandemic. With an additional 30-40 bcm of missing Russian gas to offset in 2023 compared to 2022, Europeans can be expected to benefit from an extra gas of around 20-25 bcm left in storages thanks to mild weather and available LNG. They have no choice but to continue saving energy in a hurry, that is both on gas and electricity. Gas demand in power generation had increased in the first nine months of 2022 before falling in Q4 2022, and well over 15 bcm can be saved here in 2023 as more nuclear is available altogether, alongside more renewables, and some coal. It will be critical to reduce peak loads though. The key improvement is in terms of logistics, with the massive new LNG import capacity deployed across Europe. Overall, EU’s import situation will be very tensed and fragile for the next winter. The key challenge is that EU’s gas supply security ultimately depends on the weather in Europe, China’s and Japan’s LNG demand, and weather or technical outages in the Gulf of Mexico or in other producers. Any slight disruptions in supplies can have major impacts. As a last resort, bringing back some Groningen supplies, no matter how politically sensitive this would be, must be considered and prepared. Large financial compensations and effective governmental action would notably be required to offset the hardships.
Topic:
European Union, Gas, Exports, Trade, Energy, and Russia-Ukraine War
Political Geography:
Russia, China, and Europe

3. War and Energy Security: Lessons for The Future

Author:
Tomas Jermalavicius, Veli-Pekka Tynkkynen, Andrian Prokip, Christian Egenhofer, and Edoardo Righetti
Publication Date:
05-2023
Content Type:
Special Report
Institution:
International Centre for Defence and Security - ICDS
Abstract:
Russia’s war against Ukraine has produced multiple shifts in the geopolitical landscape of Europe. Various EU member states and EU institutions broke through entire decades of dogmatic principles and established practices in security and defence policies to respond to Russia’s aggression and protect the continent. The energy domain is at the forefront of this confrontation, as Russia used its dominant market position in European energy supply in the run-up to – as well as during – the war to weaken Europe’s responses, divide the EU, and deter it from increasing its support to Ukraine. The multifaceted and far-reaching impact of the war offers an opportunity for a deeper reflection on the lessons learned for energy security at the national, regional, and EU levels. It allows for an assessment of the prospects in the geopolitical landscape where Russia is comprehensively isolated; new energy and technology players grow in importance; a new global energy order emerges; and the effects of the climate crisis become more severe and evident. It is also a rare opportunity to assess how complex energy systems retain their resilience or degrade under the conditions of a high-intensity conventional war, which has collective defence implications to the ability of the frontline states, such as Estonia, to fulfil NATO’s baseline requirements for national resilience and thus Article 3 of the North Atlantic Treaty. The report seeks to provide analysis concerning these aspects of the war’s short-, medium-, and long-term impact on energy security in Europe, the Baltic region, and Estonia. Conclusions of the report stress the importance of regulatory, policy, and technological flexibility, as well as innovation, in responding to various forms of strategic coercion through the energy sector – especially when such coercion is applied against targets under the duress of a major war, in which economic disruption, market uncertainty, geopolitical turmoil, and societal anxieties are abundant. The conclusions caution though that the appetite for resilience-enhancing investments and transformative solutions might diminish in the cost-conscious economic environment of the future or that the EU and US will start a vicious cycle of protectionist measures in green energy development, which will undercut transatlantic cooperation in energy security.
Topic:
Security, NATO, Infrastructure, European Union, Gas, Crisis Management, Renewable Energy, Hybrid Threats, and Nuclear Energy
Political Geography:
Russia, Europe, Finland, Poland, Lithuania, Estonia, Sweden, and United States of America

4. Russia Is Down, But Not Out, in Central Asia

Author:
Maximilian Hess
Publication Date:
02-2023
Content Type:
Commentary and Analysis
Institution:
Foreign Policy Research Institute (FPRI)
Abstract:
Russia’s invasion of Ukraine has weakened its influence in Central Asia, especially in Kazakhstan. Russia is no longer a regional hegemon, which may increase regional instability. Tensions between Kyrgyzstan and Tajikistan are especially dangerous. Despite Moscow’s diminished influence in Central Asia, regional states cannot afford to completely ignore Russian interests. Western hopes for Central Asian gas resources to be pumped westwards and circumvent Russia remain unlikely to be fulfilled.
Topic:
Foreign Policy, Gas, Political stability, Regional Power, and Russia-Ukraine War
Political Geography:
Russia, Europe, Central Asia, Ukraine, and Kazakhstan

5. Russia Is Down, But Not Out, in Central Asia

Author:
Maximilian Hess
Publication Date:
02-2023
Content Type:
Commentary and Analysis
Institution:
Foreign Policy Research Institute (FPRI)
Abstract:
Russia’s invasion of Ukraine has weakened its influence in Central Asia, especially in Kazakhstan. Russia is no longer a regional hegemon, which may increase regional instability. Tensions between Kyrgyzstan and Tajikistan are especially dangerous. Despite Moscow’s diminished influence in Central Asia, regional states cannot afford to completely ignore Russian interests. Western hopes for Central Asian gas resources to be pumped westwards and circumvent Russia remain unlikely to be fulfilled.
Topic:
Foreign Policy, Gas, Regional Power, and Russia-Ukraine War
Political Geography:
Russia, Central Asia, Eurasia, Ukraine, and Kazakhstan

6. Keeping the lights on: The EU’s energy relationships since Russia’s invasion of Ukraine

Author:
Szymon Kardas
Publication Date:
05-2023
Content Type:
Policy Brief
Institution:
European Council on Foreign Relations (ECFR)
Abstract:
Since the start of Russia’s all-out invasion of Ukraine, the EU has sought to rapidly reduce its dependence on Russian gas and oil. Many alternative major suppliers to Europe stepped up as ‘friends in need’ in the first year of the war, helping the EU plug the gap. The EU’s climate goals direct it to encourage the development of renewable energy sources – meaning it must also cultivate ‘friends indeed,’ which can supply clean energy as well as gas and oil. The countries best able to fulfil both short-term needs and long-term ambitions are Norway and the US, which have stable supplies of gas and are making progress in clean energy. The EU and member states have the instruments and investment resources to advance the potential of other supplier countries as well – to help them too transform from ‘friends in need’ to ‘friends indeed.’
Topic:
Climate Change, Oil, European Union, Gas, Energy, and Russia-Ukraine War
Political Geography:
Russia, Europe, Eurasia, and Ukraine

7. The Turkish Gas Hub Project: A Pivotal Putin and Erdogan Arrangement

Author:
Rahim Rahimov
Publication Date:
01-2023
Content Type:
Journal Article
Journal:
Baku Dialogues
Institution:
ADA University
Abstract:
Russian-Turkish relations have gone through a significant transformation under the leadership of Vladimir Putin and Recep Tayyip Erdogan. Initially characterized as a Putin-Erdogan partnership, now the bilateral relationship has evolved into a strategic partnership between the two states. Uniquely, NATO member state Türkiye has effectively and, so far, successfully dealt with Russia and Ukraine amidst the ongoing war between them. However, contemporary contradictions, imperial pasts, a legacy of conflict and wars, and related mutual distrust and suspicion continue to linger in the background and, one could say, just below the surface: characterizing the ties that bind Ankara and Moscow is, thus, hardly a straightforward endeavor. This essay looks not only to the historical record but also explores the perspectives of the TurkishRussian partnership within the framework of an increasingly important thread of the relationship in the time ahead: Putin’s Turkish gas hub proposal, which he made in late 2022 in response to broader developments in the conflict over Ukraine. A major conclusion is that Ankara and Moscow are set to take forward their bilateral relations despite their historical baggage and current geopolitical and geo-economic circumstances. In this context, the Turkish gas hub project represents a pivotal idea for the future trajectory of this important bilateral relationship.
Topic:
Foreign Policy, Bilateral Relations, Partnerships, Geopolitics, and Gas
Political Geography:
Russia, Eurasia, and Turkey

8. Corking Russian Gas: Global Economic and Political Ramifications

Author:
Scott Semet
Publication Date:
08-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Awarm winter in 2022–2023, a purposive decline in consumption that caused the economy to cool, and frantic efforts to attract supplies of liquefied natural gas (LNG) obscured Europe’s enduring reliance on cheap Russian gas for economic growth. European winters will not always be warm, and there is not enough LNG to replace Russian gas in the short term. Efforts to wean Europe from Russian gas permanently defy economic logic. Should policymakers choose to do so, it would carry costs not only for Europe but also for the United States and the rest of the world.
Topic:
Gas, Economic Growth, Imports, Energy, and Regional Politics
Political Geography:
Russia, Europe, and United States of America

9. Germany, Russia, and Energy Politics

Author:
Kalev Stoicescu
Publication Date:
02-2022
Content Type:
Policy Brief
Institution:
International Centre for Defence and Security - ICDS
Abstract:
In the fifth and final brief in our Germany and Baltic Security series, Kalev Stoicescu examines another of Germany’s key bilateral relationships—with Russia. Relations between Germany (or historical German and German-led states) and Russia have greatly influenced the Baltic region for centuries. In recent years, what the Baltic states see as Germany’s over-reliance on Russian gas supplies, even as they themselves have tried to secure energy independence from Russia, has been a source of tension. The Nord Stream pipelines, which Germany claims are a business project, but which the Baltic states regard as a security risk, have been particularly problematic. But at the same time, the Baltic states recognise that Germany has since 2014 adopted a resolute approach towards Russia regarding sanctions; even if they are sceptical that Berlin’s ambiguous policies towards Moscow, being both firm and conciliatory, will change Russia’s behaviour. With the appointment as foreign minister of Annalena Baerbock, who has opposed Nord Stream 2 and strongly criticised Russia’s misconduct, Olaf Scholz’s new government may stand closer to Baltic perceptions and interests and become a more principled and difficult counterpart for Russia. The Baltic states might be encouraged to trust Germany more in its dealings with Russia, but the new government must first prove itself in its words and actions.
Topic:
Energy Policy, Bilateral Relations, Sanctions, and Gas
Political Geography:
Russia, Europe, Germany, and Baltic States

10. The Wider Balkan Region at the Crossroads of a New Regional Energy Matrix

Author:
Sergiu Mitrescu and Vuk Vuksanovic
Publication Date:
10-2022
Content Type:
Case Study
Institution:
Belgrade Centre for Security Policy (BCSP)
Abstract:
The study analyzes the challenges faced by the Balkan region from an energy perspective and describes the struggle of different actors in the energy field, manifested especially through the emergence of new transport networks. The various interconnections built between the states in the region bring hope that this area will be fully integrated into the European gas network in the coming years. The complicated history of the Balkans and the relationship with Russia, still a very present actor in the region, especially from an energy point of view, creates a complex context. The study also takes into account the places that Serbia and Romania occupy in the European energy architecture, the bilateral cooperation possibilities, the degree of dependence on gas from Russia. The study provides an opportunity to reflect on the systemic changes currently underway in the energy field and their deep geopolitical implications. The Black Sea has acquired a new regional importance, not only because of the security context created by the war in Ukraine, but also because of the change that may take place following gas discoveries in Romania’s exclusive economic zone, something that could turn the country into an important regional exporter.
Topic:
Security, Energy Policy, Regional Cooperation, and Gas
Political Geography:
Russia, Europe, and Balkans