EU Mulls Complete Shutdown Of Russian Gas Supplies

Richard Ginika Izuora

The European Union, EU, has urged member states to reduce their gas consumption by 15 per cent as it warned that a complete shutdown of Russian supplies was “likely”.

The EU has been scrambling to wean itself off Russian gas since the invasion of Ukraine, but is alarmed about a potential energy crisis this winter.

In response to EU support for Kyiv, the Kremlin has already stopped or reduced gas supplies to a dozen EU member states and is expected to send lower volumes of gas to Germany when the Nord Stream 1 pipeline reopens on Thursday after scheduled maintenance works.

The president of the European Commission, Ursula von der Leyen, said the Kremlin had kept gas storage as low as possible before the invasion and gone on to cut supplies. “Russia is blackmailing us, Russia is using energy as a weapon,” she told reporters.

“It is a likely scenario that there is a full cut-off of Russian gas and that would hit the whole European Union. A gas crisis in the single market, our economic powerhouse, will affect every single member state.”

Presenting the commission’s winter plan on Wednesday, she proposed that between 1 August to 31 March 2023 there should be a voluntary reduction in gas use to 15% below the average for that period over the past five years.

Under the proposals, if there is a drastic reduction or complete shutdown of Russian gas, Brussels could declare an EU-wide emergency and introduce legally binding reduction targets.

While emergency measures would fall on industry, EU governments are being asked to step up campaigns encouraging consumers to save energy, by turning down thermostats, shortening showers and not leaving appliances on standby.

Frans Timmermans, the EU’s top official in charge of the European Green Deal, said consumers would remain protected, but could also do their bit. “Do we have to have air conditioning set at 20 degrees?” he asked. “[The temperature] could be higher, couldn’t it? Of course it might reduce a bit of our comfort, but it might also reduce a lot of our consumption.”

The targets have to be agreed by EU member states, which are responsible for choosing their own energy mix. The call for mandatory gas savings could trigger a backlash from countries less exposed to Russian gas, which may blame other member states for building up a dangerous dependency.

One senior EU diplomat suggested that Germany, which imported 50% of its gas from Russia before the war, could face some tough questions from countries that recall Berlin’s strictures on debt during the eurozone crisis.

“So we have to pay for your past mistakes. Now remind me what you said about debt in the past,” the diplomat said, describing how the debate might play out, rather than expressing their country’s stance.

EU energy ministers are to discuss the plan next Tuesday, but the Netherlands and Denmark have already signalled they might not be ready to agree the targets, because their parliaments need time to scrutinise the law.

Before the invasion of Ukraine, Russia supplied 40 per cent of EU gas, but flows are sharply down. Russia has halted supply to the Baltic states, Poland, Bulgaria and Finland, and reduced flows to Germany, Italy, Austria, Denmark, Slovakia and the Netherlands. Since mid-June 2022, during a period of scheduled maintenance, flows through Nord Stream 1 have fallen by 60 per cent,

Vladimir Putin suggested on Wednesday that the pipeline’s capacity could be reduced. The Russian president claimed there was a problem with pumping units. Sources in Moscow told Reuters on Tuesday that Nord Stream 1 was expected to resume operations on time, although at less than its capacity of about 160m cubic metres a day.

Under a worst-case scenario of a sharp cut in Russian supplies during a cold winter, the EU economy could shrink by 1.5 per cent, the commission estimates. It argues that early action to save energy combined with a milder winter could limit the economic hit to a 0.4% average reduction in GDP across the 27-country bloc.

The International Monetary Fund, however, has made a bleaker forecast, suggesting the hardest-hit countries could see a GDP fall of 6 per cent.

Under the latest plan, member states are encouraged to look at switching to alternative fuels, even delaying the decision to phase out coal or nuclear power, although clean energy is prioritised.

Social Democrat MEPs urged the EU to introduce a windfall tax on energy companies. “It would be extremely unfair if we make the most vulnerable among us, including low-income households and elderly persons, tighten their belts while energy companies with skyrocketing profits pay little or no share of the burden,” said Mohammed Chahim, a Dutch MEP.

The EU has already pledged to end dependence on Russian fossil fuels by 2027 at the latest, with a ban on 90 per cent of Russian oil imports due to be complete by the end of the year.

Since the invasion, the EU has ramped up supplies of liquified natural gas and pipeline gas from countries such as Norway, the US and the UK. It has also been criticised by human rights groups for an agreement signed this week with Azerbaijan to boost gas supplies via the southern gas corridor, a 2,200-mile (3,500km) pipeline connecting the EU via Turkey, Georgia and the resource-rich Caspian Sea.

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