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Permalink Reply by Skip Peel - Mineral Consultant on March 3, 2022 at 8:02

Will, here is a look at what the European Union has in mind.

How Europe can cut natural gas imports from Russia significantly within a year

3 March 2022  IEA Press release

IEA provides 10-Point Plan to European Union for reducing reliance on Russian supplies by over a third while supporting European Green Deal, with emergency options to go further

 

The European Union could reduce its imports of Russian natural gas by more than one-third within a year through a combination of measures that would be consistent with the European Green Deal and support energy security and affordability, new IEA analysis shows.

Europe’s reliance on imported natural gas from Russia has again been thrown into sharp relief by Russia’s invasion of Ukraine. The IEA’s 10-Point Plan to Reduce the European Union’s Reliance on Russian Natural Gas includes a range of complementary actions that can be taken in the coming months, such as turning more to other suppliers, drawing on other energy sources and accelerating efforts to provide consumers, businesses and industry with the means to use clean and efficient alternatives to natural gas. The proposed measures are fully consistent with the EU’s European Green Deal and its Fit for 55 package, paving the way for further emissions reductions in the years to come.

In 2021, the European Union imported 155 billion cubic metres of natural gas from Russia, accounting for around 45% of EU gas imports and close to 40% of its total gas consumption. Progress towards Europe’s net zero ambitions will bring down its use and imports of gas over time, but today’s crisis raises the specific question about imports from Russia and what more can be done in the immediate future to bring them down.

“Nobody is under any illusions anymore. Russia’s use of its natural gas resources as an economic and political weapon show Europe needs to act quickly to be ready to face considerable uncertainty over Russian gas supplies next winter,” said IEA Executive Director Fatih Birol. “The IEA’s 10-Point Plan provides practical steps to cut Europe’s reliance on Russian gas imports by over a third within a year while supporting the shift to clean energy in a secure and affordable way. Europe needs to rapidly reduce the dominant role of Russia in its energy markets and ramp up the alternatives as quickly as possible.”

Barbara Pompili, Minister for Ecological Transition of France, which currently holds the EU Presidency, said: “More than ever, getting rid of Russian fossil fuels and of fossil fuels in general, is essential. What is at stake is both the need to accelerate the fight against climate change, and, as we can see now, the short-term energy security of the European continent. The 10-Point Plan proposed by the IEA today will enrich our thinking. We will look at these proposals in detail, as the French President announced yesterday a broad resilience plan for France. As part of this plan, my administration is working on a set of measures to ensure the robustness of our energy system, which will certainly echo the propositions of the IEA."

Kadri Simson, European Commissioner for Energy, said: “Reducing our dependence on Russian gas is a strategic imperative for the European Union. In recent years, we have already significantly diversified our supply, building LNG terminals and new interconnectors. But Russia’s attack on Ukraine is a watershed moment. Next week, the Commission will propose a pathway for Europe to become independent from Russian gas as soon as possible. The IEA’s analysis outlines a number of concrete steps we can take towards that goal. It is a very timely and valuable contribution to our work.”

The key actions recommended in the IEA’s 10-Point Plan include not signing any new gas contracts with Russia; maximising gas supplies from other sources; accelerating the deployment of solar and wind; making the most of existing low emissions energy sources, such as nuclear and renewables; and ramping up energy efficiency measures in homes and businesses.

Taken together, these steps could reduce the European Union’s imports of Russian gas by more than 50 billion cubic metres, or over one-third, within a year, the IEA estimates. This takes into account the need for additional refilling of European gas storage facilities in 2022. Many of the actions recommended in the plan – including stepping up energy efficiency measures, accelerating renewable deployment and expanding low emissions sources of power system flexibility – are key elements of the IEA’s Roadmap to Net Zero by 2050.

The IEA analysis notes that other avenues are available to the EU if it wishes or needs to reduce reliance on Russian gas even more quickly – but with significant trade-offs. The major near-term option would involve switching away from gas consumption in the power sector via increased use of Europe’s coal-fired fleet or by using alternative fuels, such as oil, within existing gas-fired power plants.

Given that these alternatives to gas use are not aligned with the European Green Deal, they are not included in the 10-Point Plan described above. They may also be costly from an economic point of view. However, they could displace large volumes of gas relatively quickly. If the fuel-switching option were to be fully exercised in addition to the complete implementation of the 10-Point Plan described above, it would result in a total annual reduction in EU imports of gas from Russia of more than 80 billion cubic metres, or over half, while still resulting in a modest decline in overall emissions.

Reducing reliance on Russian gas will not be simple for the EU, requiring a concerted and sustained policy effort across multiple sectors, alongside strong international dialogue on energy markets and security. There are multiple links between Europe’s policy choices and broader global market balances. Strengthened international collaboration with alternative pipeline and LNG exporters – and with other major gas importers and consumers – will be critical. Clear communication between governments, industry and consumers is also an essential element for successful implementation. As the world’s leading energy authority, the IEA will continue to serve as a focal point for global dialogue on how to ensure a secure and sustainable energy future.

The 10 points

1. Do not sign any new gas supply contracts with Russia. [Impact: Enables greater diversification of supply this year and beyond]
2. Replace Russian supplies with gas from alternative sources [Impact: Increases non-Russian gas supply by around 30 billion cubic metres within a year]
3. Introduce minimum gas storage obligations [Impact: Enhances resilience of the gas system by next winter]
4. Accelerate the deployment of new wind and solar projects [Impact: Reduces gas use by 6 billion cubic metres within a year]
5. Maximise power generation from bioenergy and nuclear [Impact: Reduces gas use by 13 billion cubic metres within a year]
6. Enact short-term tax measures on windfall profits to shelter vulnerable electricity consumers from high prices [Impact: Cuts energy bills even when gas prices remain high]
7. Speed up the replacement of gas boilers with heat pumps [Impact: Reduces gas use by an additional 2 billion cubic metres within a year]
8. Accelerate energy efficiency improvements in buildings and industry [Impact: Reduces gas use by close to 2 billion cubic metres within a year]
9. Encourage a temporary thermostat reduction of 1 °C by consumers [Impact: Reduces gas use by some 10 billion cubic metres within a year]
10. Step up efforts to diversify and decarbonise sources of power system flexibility [Impact: Loosens the strong links between gas supply and Europe’s electricity security]

 

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Permalink Reply by Skip Peel - Mineral Consultant on March 3, 2022 at 8:08

The reaction of liberal democratic nations may foreshadow a historic change in cooperation against illiberal non-democratic countries that threaten other countries with war.

Key Asian nations join global backlash against Russia, with an eye toward China

washingtonpost.com

When Japan in recent days announced an aggressive set of sanctions to punish Russia for its invasion of Ukraine, it wasn’t just Moscow it wished to signal, according to U.S. and Asian officials.

It was also China.

Japan, not typically a sanctions hawk, wanted to ensure that Beijing drew the right lesson from Russia’s invasion of a weaker neighbor. Moscow would pay a high price.

Some key countries in East Asia are joining with the West to take what is for them the exceptional step of imposing significant financial sanctions, officials and analysts say, brought together by outrage at Russia’s invasion of Ukraine and concern over China’s growing aggression in the region.

“We want to demonstrate what happens when a country invades another country,” said one Japanese official, who, like others, spoke on the condition of anonymity because of the matter’s sensitivity.

Not only did Japan, the world’s third-largest economy, freeze Moscow’s access to tens of billions of dollars worth of its currency reserves held in the central bank in Tokyo. It joined with other Group of Seven nations and Australia to cut some Russian banks off from a global interbank messaging system known as SWIFT and freeze the assets of Russian officials and elites. It is also targeting individuals and organizations from Belarus.

Other East Asian countries followed suit. South Korea on Monday announced it would tighten export controls against Russia and also join the SWIFT cutoff of some banks. Singapore, which studiously seeks to avoid crossing the world’s major powers, also proclaimed it would impose export controls on items that can be used as weapons against Ukrainians and block certain Russian banks and financial transactions.

Taiwan, a self-governing island democracy that Beijing claims as its own, said its world-leading chip companies will stop exports to Russia and align with the West on the SWIFT sanction. It’s an important moment for Taiwan, which wants to show it can join the democratic alliance of countries, analysts said.

“At the core of the Indo-Pacific’s response is the fact that they know very well that China will be watching what happens in Europe very closely for signals on what might occur were it to make a similarly aggressive move on Taiwan, or elsewhere,” said former Australian prime minister Kevin Rudd, now president of the Asia Society.

Japan and other nations such as Singapore say it is important to defend the principle of state sovereignty and prohibitions against large powers changing the borders of smaller states.

“The recent invasion of Ukraine by Russia undermines the very foundation of the international order as an attempt to unilaterally change the status quo by force,” Japanese Prime Minister Fumio Kishida said this week. “It is critical for Japan to unite with the G-7 and the wider international community and take resolute actions in response.”

Respect for the territorial integrity of nations “is existential for small states like Singapore,” the Singaporean Embassy in Washington said in a statement.

Not all the countries of the Indo-Pacific have joined in. India, which has a deep interest in deterring Chinese aggression, at the same time relies heavily on Russia for defense purchases and refrained from imposing any sanctions. With the exception of Singapore, all the Southeast Asian states, which have relationships with both Russia and China, stayed away from sanctions.

“China will have noticed the really strong and unified action by the developed countries in response to the Russian invasion … but they will have been also greatly encouraged by the fact that most countries in Asia are basically sitting on their hands,” said Richard McGregor, senior fellow for East Asia at Australia’s Lowy Institute. “That’s what they would hope for in a Taiwan conflict.”

Japan’s evolution on sanctions is noteworthy. It had a tepid response to Moscow’s annexation of Crimea from Ukraine in 2014, and four years later was alone among G-7 countries in declining to expel Russian intelligence officers after Moscow’s attempted assassination of a former Russian spy on British soil.

Japan’s new boldness reflects its wariness of China’s growing assertiveness as well as of worsening cross-strait relations between China and Taiwan, said the Japanese official. “China has a bigger presence and the situation in Taiwan is more complicated and tense,” the official said.

And for Japan, that’s an existential challenge, said Atsuko Higashino, European politics expert at the University of Tsukuba in Ibaraki. Moreover, she said, Japan sees the Western alliance as essential to its defense.

“If something happens in Taiwan, it is a big security challenge for Japan as well,” she said. “We have to have the U.S., Europe, et cetera, like-minded countries, to help Japan build a strategy.”

It also follows a change in leadership, said Danny Russel, assistant secretary of state for East Asia in the Obama administration. Japan’s prime minister, Kishida, “is very much a realist and has been willing to stand up to Russia, and more broadly, to China,” said Russel, vice president for international security at the Asia Society Policy Institute.

Punitive actions against Russia, including imposing sanctions on its president, Vladimir Putin, are viewed as an important signal to China and its president, Xi Jinping, officials and analysts said. Beijing has in recent months made repeated incursions into Taiwan’s airspace, which Taipei says is designed to stress Taiwan’s air forces but which China defends as protecting its sovereignty.

China is not expected to move against Taiwan in the immediate future, analysts said, noting Xi will not want to risk a destabilizing conflict as he is seeking to cement his third term at the 20th Party Congress this fall. “But once we get on the other side of that,” said Bonnie Glaser, director of the Asia Program at the German Marshall Fund of the United States, “there’s a real concern.”

Russia’s war on Ukraine “has been an alarming wake-up call for the countries in the Indo-Pacific, not just in Europe,” Glaser said. “It has underscored the importance to countries like Japan and Australia of alliances — how important they are in protecting their interests and potentially deterring but also pushing back against a similar kind of aggression in Asia.”

Some of the countries also have been motivated by concerns they would look out of step with America’s other allies.

Tokyo and Seoul watched closely as Britain, France and Germany lined up behind the United States against Russia, in particular, the decision by German Chancellor Olaf Scholz to halt the $11 billion Nord Stream 2 gas pipeline.

“Every Asian nation was watching the Nord Stream 2 decision extremely closely,” said one Asian diplomat, who, like several others interviewed for this report, spoke on the condition of anonymity because of the matter’s sensitivity. “London always follows Washington, but when Berlin and Paris get in line so quickly, it sends a strong message to other allies.”

U.S. officials also pressed Asian allies to help bolster European energy supplies by swapping their liquefied natural gas orders with Europe — a significant request given fears that Russia could cut off Europe’s gas supplies in the event of a conflict.

Japan quickly accepted the U.S. request and South Korea is considering doing the same, according to diplomats familiar with the situation. The request was simplified by U.S. officials coming to Tokyo and Seoul with permissions in hand by Gulf suppliers to transfer the gas to Europe instead of Asia, said the diplomats.

In early February, Tokyo agreed to divert surplus LNG cargoes to Europe. Initial shipments of about 210,000 tons are due to begin arriving in early March, with more likely in April, according to a person familiar with the matter.

Last week, Kishida said he had no concern that diverting energy to Europe would immediately affect Japan’s supply, noting that the country was holding about 240 days’ worth of oil reserves in both national and private sources.

Singapore’s choice to join sanctions on Russia was “almost unprecedented”, said Bilahari Kausikan, former permanent secretary of Singapore’s Ministry of Foreign Affairs. The last time the city-state imposed unilateral sanctions was after Vietnam invaded Cambodia in 1978.

But Singapore’s reputation as a global financial center in the Pacific is at stake, said the Lowy Institute’s McGregor. To retain its credibility, he said, “I don’t think they can sit out action against Russia when just about every country is taking it.

 

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Permalink Reply by Curious Will on March 3, 2022 at 10:23

Skip, thanks again for your detailed analysis. It seems to focus on an international long term response.  I hadn't intended the discussion to go that way but I understand that it will need to do so for significant reduction in the long run and I am really glad you answered. 

Since many on this site have benefited and to some extent continue to benefit from fossil fuels financially I was thinking that if any of us want to show some support in the immediate short term we might individually think about reducing our immediate use of oil/gasoline to help offset Russian oil that we are supposed to be importing. I was hopeful of individuals cooperating in a mass reduction in the United States immediately.

Of course, I'm sure many have made or are thinking of making donations to various causes to help the Ukrainian people.

I was not even considering the automatic reduction in oil use that the market will cause with the oil price hike.   I understand that we have a diverse audience with a variety of situations and some options are not available to all. 

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Permalink Reply by Skip Peel - Mineral Consultant on March 3, 2022 at 11:02

Will, yours is a nice thought but our American society seems to have lost much of it's penchant for altruism and now resides in ideological camps that do not favor much in the way of soul searching.  Unlike WWII when the nation sacrificed and rationed things of value to the common man, today far too many aren't willing to give up a damn thing.  And when the country asks for their help, they are not only unwilling, they are belligerent.  There are several convoys of those people headed for DC now.  When they don't want to pitch in, they throw the term Freedom out there as a reason to refuse the common  sense, scientifically factual actions that would benefit them and all those they care about.  We live in a strange and disturbing time.

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Permalink Reply by Ben on March 13, 2022 at 10:05

Germany is building LNG import facilities as we speak. From what I’m told/read/hear.

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Permalink Reply by Skip Peel - Mineral Consultant on March 13, 2022 at 10:10

Hopefully they are also building subterranean storage.  Temporary storage and re-gasification are required but to have enough natural gas to get through a long winter season, Europe will have to store huge quantities of gas.  The only way to do that is how we do it.  In salt domes.

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