How will the European gas crisis affect Ukraine?
The Ukrainian service of the Voice of America spoke with Western experts about Russia’s role in the European gas crisis, the risks for Ukraine’s winter season, in particular due to the lack of transit of Russian gas.
The beginning of the heating season in Europe was marked by a sharp rise in energy and electricity prices, which reached record levels in ten years. Among the reasons for the price shock is the International Energy Agency calls an increase in demand for gas, as well as a reduction in supplies, given the less-than-expected supply of liquefied natural gas.
Earlier, the International Energy Agency called on Russia, which is a leading gas supplier to Europe, to increase gas supplies. Russian president Vladimir Putin decide that a 10% increase in supplies is possible if Europe allows Nord Stream 2 to open.
Gazprom has a large number of gas storage facilities in Europe, and – what a surprise – Gazprom did not fill these storage facilities, which are the very days that have 72 billion cubic meters of gas in Russia’s storage facilities. This is outright blackmail from Putin
Putin’s position, which linked the increase in gas supplies to Europe with the opening of Nord Stream 2, is unacceptable blackmail, I believe Anders Oslund, Associate Professor, Georgetown University, USA. He points out that Gazprom took advantage of the EU’s position and did not fill its gas storage facilities in Europe, which put pressure on the market.
“The problem is that the European Union has not insisted on reserve requirements, because a significant number of gas storage facilities in Europe” has “Gazprom and – what a surprise -” Gazprom “did not fill these storage facilities, and recently a warehouse with 72 billion cubic meters of gas in storage facilities in Russia. This is outright blackmail from Putin, “said the analyst.
Expert of the British Service for Research of Commodity Markets ICIS Aura Sabadus points out that although there is no direct evidence of pressure on Gazprom, the statement of Russian officials, as well as Gazprom’s actions, in particular with regard to the repository, testify to “energy blackmail” because some of these repositories are filled by two percent. they should be 70-80 percent full. Last year it was 90%. “
“But most importantly, Russia is not getting more gas through Ukraine, although Ukraine has been offering transit capacity since the spring or even earlier,” she added.
The Financial Times writes about Gazprom’s use of gas for political pressure on Moldova, citing the country’s officials. The expert community called for an intensification of the Memorandum of Understanding, signed by Germany and the United States on Nord Stream 2, in which the group on the consequences for Russia in the case of using energy as a weapon. The analyst of the American center “Atlantic council” wrote about it in social networks, in particular Ian Brzezinski.
In the US administration joined to calls for an increase in gas supplies to Europe and noted that if Russia refrains from supplying fuel to Europe amid the energy crisis, it could be said that Putin is approaching the use of gas as a political tool.
The gas crisis is pushing Europe to unite, Oslund said
EU ministers discussed the country’s gas market in Europe on Tuesday. During the year, Poland said Russia was trying to use gas as a political weapon. The European Commission has noted that Gazm fulfills long-term contracts, although, unlike in previous years, it does not provide additional volumes of gas.
Anti-market behavior will be violated, the European Commissioner for Energy assured during the event Cedar Simmons: “We are watching what is happening in the gas market. The European Commission’s Competition Division has begun collecting data on the behavior of major energy suppliers to identify possible anti-competitive behavior. ” However, officials failed to reach an agreement on further anti-crisis actions.
Oslund compares the current energy crisis in Europe to the events of 12 years ago, when Russia stopped gas transit through Ukraine for two weeks and 16 European countries felt the lack of warmth.
Then, after the crisis, Europe approved the so-called Third Energy Package, which established competitive rules in the energy market. Both then and now, Russia’s actions will force Europe to unite, Oslund is convinced, although rapid action should not be expected from Europe.
«Gazprom is completely dependent on Europe, 80 percent of its exports go through pipes to Europe, and it is Europe that makes the music. They will gather and react, but until that happens, this winter could be a serious crisis. “
Ukraine has shown better prepared for winter than Europe, according to experts
Ukraine is not yet threatened by the gas crisis, says Sabadus. Ukraine has accumulated enough gas, and if the winter is not too cold, it will be enough until spring. And the coal reserves are smaller, which can lead to power outages, she notes.
Oslund is in good standing because it has 18.5 billion cubic meters of gas in storage, and about three billion is private gas that can be exported.
Another issue is electricity. Coal reserves are low. It is necessary either to import coal, which is now almost impossible, or to allow the export of electricity from Russia or Belarus – the choice is the same. “
If transit through Ukraine stops, it will be a problem not only for Ukraine but also for the continent
The gas confrontation in Europe is not beginning, and Putin may resort to unpredictable actions until the complete cessation of transit through Ukraine, experts say.
Although Russia has reduced transit through Ukraine, it has not stopped it. “Russia is still pumping gas through Ukraine. If transit through Ukraine stops, it will be a problem not only for Ukraine, but also for the continent, “Sabadus said.
If Ukraine loses transit, then, first, there will be a gas shortage in Central and Eastern Europe. Second, rising prices for gas and other energy resources will widen the gap between the economies of Western and Central and Eastern Europe, she added. Ukraine’s loss of gas transit, the expert said, could further divide Eastern and Western Europe.
The Ukrainian world has reacted to such a threat. foreign ministers Dmitry Kuleba wrote on Twitter that stopping the transit of gas through Ukraine “will destroy the remnants of Russia’s reputation as a supplier of gas to Europe” and it is clear that Ukraine “has a number of asymmetric steps in response.”
To ensure energy independence, Ukraine needs to develop its own gas production, experts say
“If there is no transit, the only hope for Ukraine is domestic production.” Instead of punishing local prey, it needs to be promoted. Any restrictions should be temporary, and they should be changed as soon as prices are to average, Sabadus says.
If there is no transit, the only hope for Ukraine is domestic production
Oslund sharply criticized the idea, the initiative of the head of the “Servant of the People” faction David of Araham regarding the price level of gas suppliers.
«That’s a terrible idea, “says Oslund. – Now the private sector is rapidly increasing production, and “Naftogaz” is declining, due to the chaos created in the management of “Naftogaz”. There is no excuse to limit the price of gas in the private sector, when private companies provide to private industrial enterprises. This is horrible and fully in line with Ukraine’s national interests. “