How much we depend on Russian gas

The diplomatic crisis erupted in these weeks From the possibility of Russian invasion of UkraineOne of the most discussed issues is Europe’s dependence on Russia’s natural gas imports. Vladimir Putin’s government, while the United States has an aggressive stance on various European countries, has always cited natural gas as a key component of its energy supply and used for cooking and heating. Including ItalyThey are very cautious and accommodating.

According to the latest data Eurostat In 2019, the European Union imported 41.1 percent of its natural gas from Russia.

If the Russian government decides to suspend gas supplies in retaliation for a serious political or military conflict with Russia, the consequences could be far more serious. This is an argument often used by those most skeptical in Europe in the conflict with Russia, and there are reasons for this, but to a certain point. The European reserve system is actually very flexible and, asEconomistCan sustain a cut in distribution And very durable. But there is no denying that Europe’s dependence on Russia’s gas, and that the conflict over energy supplies will no doubt cause serious problems.

Moreover, Italy is particularly dependent on Russian gas.

According to data from the Ministry of Environmental Change, by 2020, 43.3 percent of natural gas imported from Italy came from Russia, making it the country’s first gas supplier. Algeria (22.8 per cent), Norway and Qatar (both about 10 per cent) play a major role in Italian supply. If Russia decides to cut off gas supplies altogether, Italy will lose half of its imports.

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By 2020, in Italy, natural gas will account for 31 percent of the country’s total energy consumption. Almost all gas is imported: less than 10 percent of GDP.

The situation in Europe is very different, but Russia’s dependence on gas is significant. The most exposed large country is certainly Germany, which imports half of its gas from Russia, while the other smaller states, Austria and Slovakia, are even more pro.

France, on the other hand, is relatively less expressive, mainly thanks to its own Extensive use of nuclear energy.

This does not mean, however, that Europe is irreversibly under threat from Russia’s energy.

First, because blackmail operates on both sides: just as Europe needs Russian gas, Russia needs enormous revenue from its sales. According to the OECD, it depends on about 40 percent of the Russian state budget From oil and gas export earnings. This is why, despite Europe’s reliance on Russian gas for decades, the country has never cut off its supplies, even during the most conflicted periods of the Cold War.

However, in recent years Russia and Europe have moved to reduce their dual dependence as much as possible.

L ‘Economist A few days ago Attempted to collect data and analysis Try to understand what will happen if Russia decides to cut off its gas supply for the next three months (with the advent of spring, the demand for gas to heat buildings decreases, and its value as a threatening weapon is abolished). As a result, while the downturn will be a severe blow to both the Russian and European economies, it will not be catastrophic for both.

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For Gazprom, the Russian state-owned company that manages natural gas extraction and exports, shutting down gas sales to Europe would cost $ 203 to $ 228 million a day: in three months, the losses would be $ 20 billion. This is a huge amount, but it would be much easier for Russia, where the central bank has $ 600 billion in reserves.

For Gazprom, however, the disruption of supply would further complicate its reputation: even after the crisis, it would be difficult to enter into new agreements not only with European countries but also with other major countries, such as China. You may want to avoid doing business with an unreliable partner. In addition, large and important infrastructure projects, etc. North Stream 2 PipelineRussia could actually be considered canceled if it decides to cut off gas and attack Europe: Gasprom’s trade in Europe and beyond will probably be permanently compromised.

On the other hand, for Europe, the disruption of the Russian gas supply does not mean that there will be no electricity and no heat from tomorrow. All countries, including Italy, have significant gas reserves that have been reduced in recent years, but it is still possible to offset a shortfall in Russian imports for a few months (depending on estimates of two to four winter hardiness).

Also, Europe can move quickly in search of alternative products. One of the most possible is the so-called LNG, the same product that is compressed, refrigerated and liquefied, which can be shipped and does not require gas pumps. Europe has the potential for large-scale unused rectifiers (plants used to use LNG as an energy source for its gaseous state) which will mitigate some of the damage caused by the reduction in Russian supplies.

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In recent days, the US government has introduced an emergency plan, recognizing Europe’s weakness in terms of energy Change gas imports from Russia Comes with LNG from the United States or other countries such as Qatar and is shipped if needed. For now, however, the plan remains unclear, and helps reassure European leaders that they will not be left alone to bear the consequences of any energy retaliation by Russia.

So, for Europe, in terms of price, the problem will not be large: it is possible to replace a portion of Russian gas imports, with more effort, but the increase in costs will be significant – and it will happen at a time. The market is already in crisis, and energy prices have been very high for many years. This would require more public support than has already been implemented by governments.

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