
Europe imports more Russian gas, aiding wartime economy, report finds
When addressing Congress for the first time as US president on March 4, Donald Trump said, 'Europe has sadly spent more money buying Russian oil and gas than they have spent on defending Ukraine.'
Trump has not been known for his statistical accuracy, but on this occasion, he may be right.
A report released on Thursday by Ember, an energy think tank, estimates that European purchases of Russian gas amounted to 21.9 billion euros ($23.6bn) last year, compared with 18.7 billion euros ($20.17bn) in financial aid to Ukraine.
That figure did not include military aid.
The European Union estimates it has disbursed or committed $194bn in military, financial and reconstruction aid to Ukraine since the beginning of the war.
Ember's concern was that far from publishing a promised plan to phase out Russian gas completely by 2027, the EU, instead, increased its imports of Russian gas by 18 percent last year.
'The EU needs to move away from pricey and volatile fossil gas to meet its own security, economic and climate objectives, starting with a clear pathway for the Russian gas phase-out,' Ember wrote.
Vladyslav Vlasiuk, a Ukrainian presidential adviser, told EU ambassadors to Kyiv in January that Ukraine was upset by EU gas imports from Russia last year.
'It's time to cut off the petrodollar flow fuelling Russia's aggression,' he said.
Yiannis Bassias, a hydrocarbon industry veteran and energy analyst at Amphorenergy, told Al Jazeera, 'It's true that Europe increased imports of Russian gas in 2023 and 2024, and it will import even more in 2025 because the US cannot provide more.'
'Russian gas [consumption in Europe] in 2024 was about 45 billion cubic metres (bcm) and US gas was 57bcm.'
The broader context of this is that the EU has vastly reduced energy imports from Russia since Russia invaded Ukraine in February 2022.
At its 2019 peak, Russian gas supply to Europe amounted to 179bcm, said the Oxford Institute for Energy Studies in a new report on Wednesday.
In the year before Russia invaded Ukraine, Europe bought 142bcm of Russian gas.
'As a direct consequence of factors linked to Russia's invasion of Ukraine, that volume fell to just 31bcm in 2024,' said the OIES report, and 'could be as low as 16-18 bcm in 2025.'
That is because all Russian gas used to be supplied through pipelines that are now defunct.
Unknown actors blew up the twin Nord Stream I pipelines and one of the twin Nord Stream II pipelines in September 2022. Together, the four pipelines had been designed to carry 110bcm of gas a year to Europe.
Another 33bcm of Russian gas could enter Europe through the Yamal pipeline that runs across Belarus and Poland, but Russia stopped all gas flow by May 2022 – a move likely planned a year earlier, says OIES – and Poland banned further gas imports from Russia across its territory.
A further 65bcm of Russian gas imports were possible through a pair of pipelines running across Ukraine, but when a five-year transit contract expired last December, Ukraine did not renew it, and the pipelines were idled.
The only remaining Russian gas pipeline is TurkStream, which makes landfall in Eastern Thrace and proceeds through Bulgaria and Serbia to Hungary, but its capacity is limited to 20bcm a year at the Bulgarian border, the point where it enters the EU.
'The big debate within the industry at present is whether, if there is a ceasefire or peace, we are going to see a return of Russian pipeline gas and a relaxation of sanctions on Russian liquefied natural gas (LNG),' OIES director Jonathan Stern told Al Jazeera.
The report suggests that it will not be quick or easy, as pipeline operators now have to be bailed out of bankruptcy, repairs and maintenance have to be carried out, mutual sanctions rescinded and a number of breach-of-contract claims involving hundreds of millions of dollars resolved through arbitration.
The EU has similarly tried to divest itself of Russian oil, but results have been mixed.
It imported 88.4 million tonnes of oil from Russia in 2022 before sanctioning it in December of that year.
Official EU imports of Russian oil had fallen by 90 percent by the end of last year, according to the European statistical service, but that is likely misleading because there have also been illicit imports, two-thirds of them delivered by a Russian shadow fleet.
The Kyiv School of Economics estimated that Russia made $189bn through sales of crude oil and refined petroleum products last year, a rise on $178bn in 2023.
Ember believes EU choices make for bad economics.
It estimates that if all announced investments in gas import terminals and pipelines happen, the EU will have a gas surplus of 131bcm by 2030.
That, it says, saps Europe of money to transform grids and transition to renewable energy, and exposes it to price volatility and uncertain supply, because Europe imports almost all its hydrocarbons.
Stern disagreed with Ember.
Asked if gas was a dead-end investment by 2030, he said, 'No – and nor do most governments or the European Commission [think so], otherwise they wouldn't still be spending money on new infrastructure. If you change the date to 2050, the answer may be different.'
Others believed EU choices were primarily about good politics rather than economics.
Bassias believed that 'the big thing for the US and Russia is to open navigational routes in the Arctic and to do joint oil and gas exploration there.'
They were 'tacitly cooperating under Biden, and it's official now', he said, suggesting the Ukraine war got in the way of that cooperation.
Energy analyst Miltiadis Aslanoglou agreed that 'if one wanted to be strict about [energy imports], one could be.'
'Europe has sent Russia the message it wanted to send – that 'we do not depend on you.' To take its gas trade to zero is very difficult [diplomatically], because, for better or worse, Russia will always be there, it will always be a neighbour. So Europe keeps a door open,' Aslanoglou told Al Jazeera.
He suggested Europe was keeping the once-mighty Russian gas giant Gazprom on life support.
'Gazprom is certainly not the trillion-dollar company it was five years ago, and no one even knows whether it will even exist in another five years,' Aslanoglou said. 'Right now, [it] is in dire financial straits. They can barely maintain the pipeline network within Russia, which is 50 or 60 years old.'
Ukraine has a different view.
Its long-range drone strikes inside Russia since last September suggested a policy shifting from striking ammunition depots to one of choking off Russian export revenues from gas, oil and refined petroleum products, according to analysis from the Ukrainian group Frontelligence Insight.
Ukraine has tried to kill Gazprom twice this year, sending attack drones to destroy the Russkaya compressor, which pressurises gas in Russia's one remaining pipeline to Europe, TurkStream.
Russia said it downed nine drones near the compressor in Russia's Krasnodar region on January 13 and another three drones on March 1.
Ukraine also tried to cut off Russia's crude oil offloading terminal at Novorossiysk in the Black Sea on February 17, and succeeded in damaging it.
Russian President Vladimir Putin's prioritising of a ceasefire in the Black Sea this week, likely aimed to forestall any further Ukrainian attacks on Russia's main economic lifeline.
Ukraine appears not to be the only loser in a 'good politics' scenario with Russia.
The International Energy Agency's Global Energy Review on Monday found that the world's decarbonisation efforts, in which Europe has played a leading role, were beginning to show real results.
Although world energy demand rose by 2.2 percent last year, emissions only rose by 0.8 percent, the IEA said, because renewable energy capacity increased by 700 GW – a 22nd straight annual record in new installed capacity.
That, said the IEA, proved that 'growth in energy-related carbon dioxide (CO2) emissions continues to decouple from global economic growth'.
Ember's message was similar. Unlike Russia and the United States, Europe is hydrocarbon poor.
According to Eurostat, dependence on imported hydrocarbons meant it produced only 37 percent of its total energy needs last year.
Ember believed a paradigm shift to clean energy technology would not only save Ukraine from Russia, but could also save Europe from climate change.
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