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Russian gas, a headache for the EU

Russian gas, a headache for the EU

The European Union (EU) promised this Friday at a summit in Versailles (France) to reduce its dependence on the gas in Russianbut closing the tap represents a headache for a block with different realities.

“We have agreed to eliminate our dependence on Russian gas, oil and coal imports as soon as possible,” reads the Versailles Declaration, adopted by the leaders of the 27 EU countries.

The Europeans made that decision in response to Russia’s invasion of Ukraine and under pressure from the United States, which has imposed an embargo on Russian oil and gas imports. The United Kingdom announced that it will do so at the end of 2022.

However, the realities are different. Russia supplies 40% of the EU’s gas needs and around 25% of crude oil. The United States, for its part, imports only 8% of its oil from Russia and no gas.

In the EU, the countries that share a border with Russia, such as the Baltic and Nordic countries, are pressing to break energy ties with their neighbor, given the reluctance of industrial nations such as Italy, Germany and others in central Europe.

The impact of the sanctions on Europeans must be the “minimum possible”, reiterated the head of the German government, Olaf Scholz, whose country imports 55% of its gas and 42% of its oil from Russia and Coal.

“We have to get rid of Russian fossil fuels as soon as possible”, since, with their purchase, “we are in fact financing the Russian war”, estimated the Finnish Prime Minister, Sanna Marin.

“calculation errors”

In its strategy to achieve carbon neutrality by 2050, the European Commission presented this week its plan to become independent of hydrocarbons before 2030. The leaders urged this Friday that it be by 2027.

The economic situation does not help either. The war in Ukraine sent oil and gas prices skyrocketing and calls for Europeans to reduce their energy consumption are multiplying, in the middle of the boreal winter.

The European Central Bank (ECB) also estimated that the growth of the Gross Domestic Product (GDP) of the eurozone will be 3.7% in 2022, half a point less than the previous projection, and that inflation will shoot up to 5.1% due to prices of energy.

French Economy Minister Bruno Le Maire, whose country holds the pro tempore presidency of the EU, even compared the current situation “in intensity and brutality to the 1973 oil crisis.”

In a context of concern in Europe about purchasing power, Russian President Vladimir Putin assured that he is not responsible for the rise in prices in the world, which he attributed instead to the “miscalculations” of Westerners.

The head of the European Commission (EC), Ursula von der Leyen, advanced that she will present before the end of March a plan to avoid the “contagion effect” of rising gas prices on household electricity bills.

“energy island”

In Versailles, European leaders advocated diversifying their supplies and routes, including the use of liquefied natural gas (LNG); promote renewables; improve energy efficiency and contingency plans.

Brussels proposed, for example, tripling the target for storage capacity in the EU by the end of September from 30% to 90%, in order to face the autumn and winter months and possible shocks in the market and supply.

Another of the leaders’ promises is to improve the interconnection of the European gas and electricity networks, a traditional call from Spain, whose Prime Minister, Pedro Sánchez, reiterated upon his arrival at the summit.

“It is unacceptable that the Iberian Peninsula is an energy island,” said Sánchez, defending that Spain’s regasification and renewable energy capacity can “contribute” to the “strategic autonomy” of Europe.

For example, Spain has several LNG terminals, but its capacity to distribute it beyond the Pyrenees to the rest of the continent is limited by the lack of interconnections.

Source: Gestion

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