News.Az presents an interview with Stanislav Tkachenko, Ph.D., Professor at St. Petersburg State University.
– What are the main reasons why Russia was able to surpass the USA in gas supplies to Europe in May, despite ongoing sanctions and political pressure?
– There are several reasons, but the main two are: First, although belatedly, Russia entered the race to create a liquefied natural gas (LNG) industry at the beginning of this century. Although Russia significantly trails behind the three world leaders (USA, Australia, and Qatar), it holds a solid fourth place. Its companies, Gazprom and Novatek, are continuously increasing LNG production capacities in the Arctic, Sakhalin, and the Baltic region. Since the USA and its allies do not impose sanctions on LNG, Russia freely trades such gas worldwide.
The European market, being geographically closest to the Arctic LNG plants and having the necessary infrastructure for reception and further transportation of LNG to end consumers, is a natural client for Russian companies.
Second, the catastrophic consequences for European industry caused by the cessation of Russian natural gas purchases in 2022 force EU country leaders to reconsider resuming cooperation with Russia in the gas sector. The current downturn in EU industries such as metallurgy, polymer production, petrochemistry, and the production of nitrogen fertilizers (ammonia, urea, ammonium nitrate) forces both big business and government officials to take measures to prevent a complete collapse in these sectors.
Resuming purchases of Russian gas is a natural solution. However, it is associated with sensitive political costs for European governments. But these are their personal problems.
– What measures and alternatives is the European Union considering to further reduce dependence on Russian energy resources, and how effective can they be in the current conditions?
– The EU is actively working on expanding the geography of LNG purchases, competing with China for the opportunity to buy such gas from Qatar and Australia. Since EU countries are considered unfriendly by Russia, Moscow observes with satisfaction the difficulties in solving the issue of geographical diversification of LNG supplies to Europe.
Moscow also positively assessed the decision made by US President Joe Biden in February 2024 to suspend the issuance of new permits by US companies for LNG supplies to Europe. This decision did not cause immediate negative consequences on the European energy market. However, in the medium term, it makes the task of finding new gas sources by Europe even more acute.
Since the natural and economically justified solution to resume Russian pipeline gas supplies does not come to mind for Europeans, the only option left is to wait patiently (and with popcorn) for the end of the European energy saga.
Regarding other energy sources supplied from Russia to Europe, diversifying these supplies does not present much difficulty. The EU buys oil, coal, and electricity on the global market, and Russia’s positions there are far from monopolistic. The only exception is the market for enriched uranium for nuclear power plants. But so far, it operates without disruptions and has not been affected by any sanctions. Russian Rosatom has excellent prospects for expanding its share in the supply of enriched uranium to the markets of several European states.
– How does the change in the balance of gas supplies to Europe reflect on energy prices for end consumers in the EU?
– Over the last 10 years, energy prices in Europe have experienced several periods of rises and falls. They were very high until the autumn of 2014, followed by a long period of low prices for major types of energy (oil, gas, electricity, coal). The energy crisis of 2022 and the sharp increase in prices for all types of energy carriers to record levels in the history of the planet’s economy was a shock for both European industry and households.
Active efforts by the European Commission allowed for overcoming the threat of an energy deficit in 2023 and reducing the price level to a relatively acceptable level. Currently, energy prices in Europe are on average 20-30 percent higher than in the period from 2015 to 2020. This affects end consumers, especially those aforementioned EU industrial sectors that consume significant amounts of energy resources. Prices for electricity and heating also remain high for households and in the municipal sector.
– What strategic conclusions should European politicians and business draw from the current situation with gas imports, and what steps can be taken to strengthen Europe’s energy security?
– The main strategic conclusion that future generations of European politicians and businessmen need to make is the necessity to restore Europe’s sovereignty, limited in the current era by the United States. The current generation of EU country leaders and European Union institutions is not capable of making such decisions; we can only wait for them to leave the stage.
The current crisis in Ukraine is a product of American foreign policy thought, and it has several goals: to defeat Russia, sever the economic ties between the EU and Russia, weaken the EU economy, particularly the industries where European companies compete with American ones (automobile manufacturing, chemical industry, ICT, and microelectronics production).
Russia is not interested in the EU taking successful steps to strengthen its energy security. We are witnessing the real “decline of Europe” and consider it a logical consequence of the refusal of sovereignty and the delegation of decision-making powers in the areas of macroeconomics and foreign policy to Washington. With an economically weakened Europe, Russia will find it easier to deal with it in the future.
News.Az
Source link : https://news.az/news/-interview-russia-ahead-of-us-in-gas-supplies-to-europe-despite-sanctions-
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Publish date : 2024-06-18 15:15:08
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