Looming gas crunch poses ‘historic test’ for Europe, IEA says
- Nations face a real possibility that Russia will choose to completely cut off its supply of gas, says energy agency
European nations must take urgent and coordinated action to avert a potentially disastrous natural-gas supply crunch this winter caused by reduced Russian supplies, the head of the International Energy Agency has warned.
Europe faces a real possibility that Russia will choose to completely cut off its supply of gas, Dr. Fatih Birol, the IEA’s executive director said Monday. Those supplies still remain crucial to the region’s economy—from households to heavy industry—even after efforts to find alternative suppliers.
European nations are rushing to rapidly refill gas storage tanks before the strong demand of the winter heating season sets in. A temporary shutdown of the Nord Stream 1 pipeline, which carries Russian gas to Germany, has raised fears that Moscow may not restart the key gas conduit when the scheduled maintenance period ends on Thursday, or it may restart flows at reduced levels.
Russia has already significantly curtailed gas flows to the region, efforts which began months before Moscow’s invasion of Ukraine, Dr. Birol said. Russian natural-gas flows to the European Union have fallen below 100 million cubic meters a day this month compared with flows of almost 400 million cubic meters roughly this time last year, according to IEA data.
“Europe is now forced to operate in a constant state of uncertainty over Russian gas supplies, and we can’t rule out a complete cutoff," said Dr. Birol. “Russia could decide to forgo the revenue it gets from exporting gas to Europe in order to gain political leverage."
While European nations had already taken significant steps to move away from Russian energy suppliers, further immediate steps were needed, including reducing demand from businesses and households, he said.
Outlining a five-point plan to help ease the challenge, Dr. Birol said the EU should temporarily step up coal-and oil-powered electricity generation; launch public information campaigns to reduce household gas demand; compensate industries for forgoing gas supplies; increase cooperation among national electricity operators; and plan for EU-wide sharing of what available gas supplies there are.
“This winter could become a historic test of European solidarity—one it cannot afford to fail—with implications far beyond the energy sector," said Dr. Birol.
Reducing demand for gas was crucial as even near maximum additional supplies from other sources, such as Norway, North Africa or the U.S., wouldn’t replace lost Russian gas flows, he said.
Energy analysts have increasingly warned that European nations face the prospect of gas rationing to get through the winter, a difficult political challenge for governments already facing domestic disquiet about soaring inflation and stagnant wages.
A complete shut-off of Russian gas supplies to Europe could take a particularly heavy toll on the German economy. The nation’s industries—from metals refineries to chemical firms—depend heavily on the commodity, much of which still comes from Russia.
If Russia doesn’t turn the Nord Stream 1 pipeline back on later this week it could see German industrial activity contract by between 30% and 60%, even if the nation looks to burn more coal, analysts at UBS said in a note last week.
This story has been published from a wire agency feed without modifications to the text
