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Report: Europe Ill-Prepared For A Winter Without Russian Natural Gas

If Russia were to shut off natural gas supplies to Europe, the continent would be ill-prepared for major supply disruptions and many countries would suffer huge shortfalls in fuel during the winter, according to an official report.

The European Commission reports that the European Union lacks the infrastructure and plans for multinational cooperation to handle even a short-term (six month) shutoff of natural gas supplies from Russia in retribution for the EU’s opposition to President Vladimir Putin’s aggression in Ukraine.

The report says that a “prolonged supply disruption of the Ukraine transmission route and a fortiori of all Russian gas supplies to the EU will have a substantial impact in the EU” — especially in Eastern Europe.

“In the absence of cooperation between Member States and of additional national measures, serious supply shortfalls of 40% or significantly more could materialise, at least towards the end of the 6-month disruption period, for Bulgaria, Romania, Serbia, the former Yugoslav Republic of Macedonia and Bosnia and Herzegovina,” the report noted.

“Shortfalls of similar magnitude would apply for Lithuania, Estonia and Finland in the scenario of a total halt of Russian supplies to the EU,” the Commission’s report continued. “Hungary and Poland would also be substantially affected, albeit to a lesser degree, by shortfalls of 30% and 20% respectively.”

The EU has fears Russia could use its status as a major European natural gas supplier to keep countries from intervening in Ukraine where Russia is backing a separatist movement. Russia has even sent troops into Ukraine to aid rebels in the eastern part of the country.

After initially moving slowly, the EU joined with the U.S. to impose sanctions on Russian officials and companies close to Putin’s inner circle. A move that has only gotten Europeans more worried about gas supply disruptions as winter rears its ugly head.

“In September and October 2014, flows of Russian gas to the EU were at times lower than

expected which, in the view of the Commission, is worrying,” the Commission wrote. “Notably, during September reductions in Gazprom deliveries to a number of EU companies have been reported, albeit these reductions have not had an adverse impact on supply security in the EU or its neighbouring countries.”

Ukraine is already looking to be in trouble this winter. Russia halted gas imports to the beleaguered country in June and Putin himself has warned that any signs of Ukrainians trying to syphon off gas meant for Europe to satisfy their own needs would result in a complete shut off to the whole continent.

“If we see that our Ukrainian partners, just like in 2008, begin removing gas without permission from the export pipeline system, we, just like in 2008, will consecutively reduce the stolen volume at the cost of supplies,” Putin said on Thursday, harkening to a 2008 incident where Russia cut gas supplies to Europe.

While the EU plans to aid Ukraine come this winter to beef up its gas reserves, the report also notes that shipments of liquefied natural gas from abroad will be critical to increasing energy independence from Russia.

“As regards imports, the scope for additional deliveries through pipelines from North Africa is currently limited and Norwegian production is close to capacity,” the Commission said. “LNG is clearly the import source with the biggest potential as LNG terminals in the EU have sufficient capacity to allow new LNG volumes to be shipped in.”

Republicans have argued that LNG exports to Europe are a major business and foreign policy opportunity, but one whose window is quickly disappearing.

“We have an opportunity to sell surplus American energy to our friends and allies in Europe,” Alaska Republican Sen. Lisa Murkowski said in a statement. “This requires continuing the build-out of our liquefaction capacity for gas and lifting the ban on oil exports.”

The Obama administration has been moving at an uneven pace to approve LNG terminals across the country which has garnered some criticism from political opponents. But even after terminals are approved, they can take years to get up and running.

In the meantime, Europe will have to cope with a possible gas shut off by increasing its own domestic production and taking measures to ensure it has enough supply to last through the winter, according to the EU Commission.

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