EU takes steps to counteract Russia’s gas cuts

Europe, Russia, Ukraine - flags
Source: DollarPhotoClub

The European Union is preparing to take steps to secure gas supplies over the coming winter in the face of the disruption caused by the Russian-Ukrainian crisis – Reuters reports.

“In the short term, the EU has the following overriding priority: to ensure that the best possible preparation to… sudden disruptions in energy supplies, in particular during the coming winter, and that the most vulnerable Member States are collectively supported,” the Council of the European Union, which is made up of the EU’s 28 members’ governments and currently led by Italy, said in a letter this week.

“Efforts need to be made for identifying market failures… in order to provide rapid and effective solutions. Where this is not possible, non-market based measures can be put in place…” it added.

Russia is Europe’s biggest supplier of oil, coal and natural gas, with some countries, such as the Baltic republics and Bulgaria, totally dependent on Russian gas. There are fears that despite the proposed EU measures, southeast Europe will struggle to find enough gas to meet demand this winter as its infrastructure is not well enough developed to bring non-Russian gas into the region.

The draft document prepared by the EU is expected to include measures such as making use of existing powers to ban companies from selling liquefied natural gas (LNG) tanker cargoes outside Europe, keep more gas in reserve, and order industry to stop using gas.

Tankers from countries like Qatar and Algeria bring LNG to European via Atlantic and Mediterranean ports, but European buyers often re-sell those cargoes abroad for higher prices rather than supplying their domestic market.

Other proposed measures advocate the development of new energy sources, including shale gas and oil, as well as reducing the EU’s dependency on fossil fuels by switching towards renewable energy and by improving energy efficiency to reduce overall fuel consumption. The draft also proposed investing into import routes that could bring central Asian and Mediterranean gas to Europe.

The proposed EU import projects include more LNG capacity in order to tap supplies from North America, Africa and the Middle East, as well as plans to access newly discovered fields in East Mediterranean waters of EU member Cyprus, as well as Israel and untapped resources in EU Black Sea waters.

The draft paper’s findings will be discussed by EU member states this month for presentation at the European Council meeting in October.

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