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30th Jul 2016

EU unveils plan to curb reliance on Russian gas

  • Russia stands accused of using gas a political weapon (Photo: gazprom.com)

The EU has unveiled plans to reduce its reliance on Russian gas, with increased imports from Norway and energy efficiency at the top of its wish-list.

Launching the European Commission's paper on European Energy Security on Wednesday (28 May), energy commissioner Gunther Oettinger told reporters that "in a time of crisis between Russia, Ukraine and EU … energy independence has risen up the agenda and is a concern to all."

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The EU's energy consumption has actually fallen by 8 percent since 2006, but its security of supply is likely to be put under further pressure by increasing demand across the rest of the world, which the commission forecasts will rise by 27 percent by 2030.

Although EU countries import 88 percent of the oil that they use, as well as 42 percent of solid fuel, the main concern of the commission and governments is gas - 66 percent of Europe's gas is imported at a cost of more than €1 billion per day.

Of the 400 billion cubic metres of gas consumed in the EU each year, around 40 percent comes from Russia's state-owned Gazprom. The majority of this is piped through Ukraine, currently embroiled in a dispute with Russia over how much it owes Gazprom for its past and future gas supplies.

"We are better placed than we were during gas crises in 2006 and 2009," said Oettinger, in reference to when Russia temporarily shut off transmission of gas to Ukraine.

"[But] we have differing situations across Europe," he added.

Ireland, UK, Portugal and Spain import no gas from Gazprom, while 18 countries import from Russia and elsewhere. But Finland, Estonia, Latvia, Lithuania, Bulgaria and Slovakia import 100 percent of their gas needs from Russia.

"We want to complete the internal energy market … and move away from a monopoly, Russia in this instance," Oettinger noted.

The commission is also anxious to increase the amount of gas it buys from Norwegian company Statoil, which currently provides 33 percent of the bloc's gas compared to 39 percent from Russia's Gazprom.

But while Oettinger said a further 10 billion cubic meters per year could come from Norway in the short-term, EU officials have indicated that a larger increase in long-term supply will depend on whether Norway develops new gas fields in the Barents Sea.

In the meantime, the commission wants to run "stress-tests" over the summer to assess whether European countries could cope if Russia turned off the gas taps during the winter.

The bloc also urges governments to increase their gas storage facilities and agree more reverse flow deals allowing gas to be transferred to needy countries.

"We will look at an energy efficiency strategy for the next decade," said Oettinger.

The paper confirmed that a terminal to handle imports of Liquified Natural Gas in Lithuania will be completed by the end of 2014.

EU officials are also keen to promote ways for the bloc to speak with one voice on energy policy.

The commissions is seeking a greater role in intergovernmental agreements between countries, an idea previously mooted by Polish Prime Minister Donald Tusk.

Tusk has become the leading advocate for the EU to establish an "energy union", under which solidarity mechanisms would help member states most vulnerable to disrupted supply and EU members would band together to negotiate better terms in deals with third countries.

EU leaders will discuss the paper when they gather in Brussels for their June summit.

EU free movement must be curbed, UK says

British leader Theresa May has said free movement of EU workers to Britain cannot continue as in the past, while visiting Slovakia and Poland on Thursday.

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