EU Needs Russian Gas but with Caveats: EC

Europe is still heavily reliant on imported hydrocarbons, and therefore Russia will remain a key energy supplier for the European Union (EU), the EU commissioner for climate change and energy, Miguel Arias Canete, told delegates at the 4th EU Energy Summit in Brussels April 12.

But that fact did not mean that it would receive preferential treatment: "What is important is to ensure that Russian energy supplies into Europe are subject to competitive pressures from the existence of other suppliers able to compete anywhere across our market. This will ensure that the continued role of Russia as one of our main energy providers does not come at the expense of our energy security and resilience, nor does it lead to excessive prices," he said.

He said the March dispute between Ukraine and Russia over the implementation of the Stockholm arbitration, which Gazprom has repudiated, "has made it clear one more time that the international geopolitical situation requires the EU to look even more urgently at enhancing its own energy resilience." 

And key to this over the medium to longer term is reducing the overall dependence of our economies on imported hydrocarbons, he said, while in the short to medium term, "we need to ensure that our imports come from an increasingly diversified range of suppliers that are pricing the energy competitively, in particular with respect to natural gas."

As well as new pipelines such as the Southern Gas Corridor, he said: "The appearance of the US as a major energy exporter on the global market is an important development. And while we very much appreciate the US LNG that has so far been delivered to Europe, we believe that we have an attractive, large and competitive market that can attract more US companies to actively compete with their gas on our market."

Hydrocarbons generally though received short shrift, as Canete lumped relatively benign gas in with oil and coal as an imported commodity the EU should be wary of: "We have made very significant progress with respect to renewable energy and energy efficiency; still coal, gas and oil together accounted for some 72% of our primary energy consumption in 2016, and most of this is imported. In 2016, we imported around 88% of the oil we used, 70% of the natural gas we used and 40% of the solid fuels we used," he said. This ratio would not decrease as, although consumption might, so too would production, he said.

Pipeline imports from a few major suppliers continue to dominate the picture today. In 2016, some 76% of EU gas imports came from Russia and Norway, he said, while a further 13% arrived in the form of LNG, and the remaining 11% came from Algeria and Libya.

The European Commission published 2017 data last month, showing that Russia's share of EU imports had risen to 43%, while Norway's remained constant at 34%, while Algeria/Libyan piped gas was 10%.

Canete delivered his speech as the US, France and UK were deciding on a possible missiles attack later this week or at the weekend on Syrian air and military bases, in response to Syria's April 7 chemical weapon attack on its own town of Douma. Russia has said it would respond to any attack on its Syrian ally, raising the risk of a direct confrontation between Russia and the West.