Europe still hooked on Russian gas despite deep cut

Russia's war in Ukraine was a watershed moment for Europe.

Following Russia's full-scale invasion of Ukraine, which has killed tens of thousands and forced millions out of the country, Russia sought to punish the European Union for supporting Kyiv.

Russia began to choke Europe, violating pre-existing energy contracts and unilaterally decreasing its gas exports to the EU.

The Kremlin has also managed to compensate for the loss in export volumes with massive increases in European gas prices and high oil prices.

Its budget revenues from oil and gas jumped by over a third between January-September 2022, according to Reuters. 

While EU countries had paid roughly $100 billion to Russia for its fossil energy in 2021, according to Eurostat, the Centre for Research on Energy and Clean Air (CREA) estimated that, as of Jan. 17, EU countries had paid $135 billion to Russia for its fossil fuels since the beginning of the full-scale invasion in February 2022.

In short, the EU paid more to Russia in 2022 than in 2021, despite reducing its dependence on Russian energy.

The EU imported $50 billion worth of Russian gas, fuelling Russia's war machine and helping fund war crimes in Ukraine.

Hooked on Russian gas for years, Europe exceeded expectations and decreased the share of Russian gas in the EU's energy mix from 40% to 10% within a year.

But a major gas cut wasn't Europe's decision, Thomas Pellerin-Carlin, the head of the EU program Institute for Climate Economics, told the Kyiv Independent.

"The person who decided that is (Vladimir) Putin," he said. "This is not a European decision, compared to oil, for example."

What's next in 2023?

The EU's gas consumption and, to an extent, its need for Russian gas will depend on several factors, such as economic forecast, weather, and geopolitics.

If the winter is too harsh more gas will be needed worldwide, forcing Europe to compete and look for larger gas quantities.

But there is simply no LNG available that hasn't already been booked in the world until 2026, and the North Sea gas fields Europe used to supply for its own, heavily exploited from the 1970s, and onward, are now depleting.

The UK and the Netherlands must find and exploit new wells offshore to relaunch gas production.

According to the International Energy Agency, the EU faces a possible shortfall of up to 30 billion cubic meters of natural gas over 2023 as Russia tightens its grip and the Chinese market rebounds, meaning an increased Asian need for LNG that will worsen exports for the EU.

Overall, the only solution for Europe is to upscale its green energy policy into a "war-like economy," Pellerin-Carlin said.

"The EU is not at war with Russia, but it needs to scale up its weapon production to help Ukrainians, and energy is the only real leverage Putin has on Europeans," he said.

The bloc needs to focus on factors it can control, namely renewable energy, energetic sobriety, and energetic efficiency.

"In Paris, I still see empty shops with lights on at night and overheated shops, which violates French law, but it shows that there still needs to be an effort made," he said.

Pellerin-Carlin said that the EU has no choice but to implement strong domestic policy to tame and transform its energy production and consumption.

"The question is how many million Europeans are willing to reduce heating to save gas — if everyone was making more effort, we'd already be independent of Russian gas."

Note from the author:

Hello, this is Alexander Query, thank you for reading this story.

I’m incredibly lucky to have been working with the Kyiv Independent team since day one and before, a team that’s working 24/7 to bring you the latest news and in-depth articles to understand the situation in Ukraine and the region.

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