Europe must avoid ‘sticking plaster’ solutions to meet energy needs
Europe has to ramp up energy generation across the continent, rather than simply shift its dependence from Russia to other overseas suppliers, warned a Westminster-based foreign policy think tank.
James Rogers, co-founder and director of research at the Council on Geostrategy, told City PM that becoming dependent on other countries would only be a “sticking plaster” solution for Europe.
He argued that the troubled Continent needed to take the opportunity presented by Russia’s invasion of Ukraine to boost domestic production, and ensure its long-term energy security.
Rogers said: “The issue is that we need to wean ourselves off of foreign fossil fuel supplies, particularly from countries which are either unstable or unfriendly.”
Prior to the outbreak of conflict in February, the European Union (EU) relied on Russia for around 40 per cent of its gas imports.
The EU has since halved its dependence over the past six months amid sanctions on Russian energy supplies and a Kremlin-backed squeeze on gas flows entering the continent – which powered wholesale costs prices to record highs earlier this summer.
It has made up the shortfall with natural gas supplies from Norway, Azerbaijan and the UK alongside ultra-expensive liquefied natural gas from the US.
However, Rogers believed that Europe should minimise its dependence on overseas partners.
This included countries in the Gulf region which had their own interests to protect, as reflected in OPEC’s production shortfalls over recent months.
He also noted that Europe would struggle to replace Russian shortfalls with gas from Qatar and Saudi Arabia this winter even if they were inclined to help.
This because Japan, Korea, and China were also competing for their supplies, holding long-term arrangements with suppliers in the region.
He said: “That means that the competition for the suppliers is going to intensify which in turn will potentially force prices up going forward.”
Instead of relying on others, Rogers argued that the troubled continent had to focus on ramping up domestic energy generation.
He supported a vast ramp-up in both renewables and nuclear power – and believed that countries should be extracting “whatever oil and gas is left” to meet domestic energy needs.
The Council on Geostrategy is a non-profit group focused on international affairs including geopolitics and climate strategy.
It published a report earlier this year advocating a role for Ukraine in meeting Europe’s energy needs.
Europe scrambles to secure supplies this winter
The EU is currently racing to top up supplies ahead of winter, with the bloc filling up over 80 per cent of available capacity this month.
This has seen gas prices ease in recent weeks amid reduced investor concern over blackouts, however prices remain elevated following a Russian squeeze on energy supplies with the remaining possibility of further spikes this winter.
Kremlin-backed gas giant Gazprom has halted flows via the Nord Stream 1 pipeline, citing maintenance issues which have been refuted by the EU – which deems the disruption retaliation to Western sanctions.
Meanwhile, France has reported nuclear outages, Norway is suffering droughts that have reduced generation at its hydroelectric plants, and multiple countries including Germany and Spain have brought in rationing measures and public information campaigns.
The UK’s Office for National Statistics recently revealed the country managed to meet its energy needs for June without any oil and gas from Russia.
The country typically only relies on Russia for around four per cent of its gas, and has announced plans to phase out its crude oil by the end of the year.
However, the UK has minimal gas storage – even with the Rough site expected to be partially reopened this winter – and is highly reliant on interconnectors with Europe and long-term fossil fuel deals with Norway to meet its energy needs.
Downing Street unveiled the UK’s energy security strategy earlier this year, committing the country to a vast ramp up in offshore wind, solar power and nuclear energy alongside North Sea oil and gas exploration over the coming decades.