Why Europe can’t afford to cut Russian power just yet

While the West is united in punishing Russian President Vladimir Putin for invading Ukraine, Europe’s reliance on Russian energy makes this difficult.

President Joe Biden joined European Commission President Ursula von der Leyen on Friday to announce a new plan under which the United States and other countries will increase shipments of liquefied natural gas to Europe. of at least 15 billion cubic meters in 2022, with further increases in the years to come. come.

“As Europeans, we want to diversify away from Russia to suppliers we trust, who are friends and who are reliable,” von der Leyen told a joint press conference in Brussels.

However, Europe remains dependent on Russian energy and cannot cut it overnight.

To what extent do the United States and Europe depend on Russia for their energy supply?

Last year, Russia supplied 8% of all US oil imports, including 3% of crude oil imports, according to the US Energy Information Administration. The United States has not imported any natural gas from Russia since 2019, according to Forbes.

The United States banned Russian oil and gas imports earlier this month.

“The United States produces far more oil domestically than all of Europe,” Biden said when he announced the ban, according to NBC News. “We can take this step where others can’t.”

The European Union depends on Russia for 40% of its gas, 27% of its oil imports and 46% of its coal imports, according to Reuters.

“We are much more dependent in Europe compared to the situation in the United States,” Charles Michel, president of the European Council, told CNN’s Christiane Amanpour on Wednesday. “That’s why we have to be smart. The goal is to target Russia, the goal is to be painful against Russia. The goal is not to be painful for ourselves.

Why did Europe start using Russian energy?

Russia’s energy relationship with Europe dates back to the Cold War, explained Pierre Noël, a global fellow at the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs. Natural gas from the Soviet Union helped Western Europe move away from petroleum products after the oil shocks of the 1970s.

In 1981, then US President Ronald Reagan imposed sanctions effectively banning US companies from participating in the development of a gas pipeline from Siberia to Germany. But Reagan lifted the sanctions a year later following fierce opposition from the oil and gas industry, according to The New York Times.

Years later, in the early 2000s, some European countries became increasingly wary of Russian energy dependence when Putin came to power and Europe’s political relations with the country have changed.

“However, Russia has always been a very reliable supplier and has adapted its commercial conditions to the evolution of the European market, guaranteeing the competitiveness of its gas,” Noël said.

In addition, some European powers like Germany and France wanted to maintain a relationship with Russia and saw energy as an area where cooperation had proven fruitful, Noel added.

How much would it cost Europe to cut off Russian gas and oil?

EU countries fear that further pressure on Russia will cause serious damage to the global economy.

Germany – Europe’s largest economy and the world’s fourth largest – depends on Russia for more than half of its gas and a third of its oil, according to the London School of Economics. Shutting off Russian energy supplies could prove risky.

“The economic damage would be extensive,” Christian Egenhofer, associate fellow at the Center for European Policy Studies think tank, told HuffPost. “Should we weaken our economies is a question. The other is whether we should keep more sanctions ready, for in case Russia uses chemical weapons or more brutality against civilian targets.

In the meantime, it is unclear what financial pressure the EU is prepared to tolerate in order to punish Russia.

“I think it’s important for us at European Union level to protect our economic strength, our economic power,” EU’s Michel told CNN. “This is the essential condition for supporting Ukraine and taking painful measures against Russia.”

World gas and oil prices hit record highs after Russia invaded Ukraine. Soaring costs could also affect other industries, warned Anne-Sophie Corbeau, a global fellow at the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs.

“High gas prices also mean high electricity prices,” Corbeau told HuffPost. “This could have a serious impact on our industries. It can also have a disastrous impact on fertilizer production and therefore on food production, which can aggravate a potential food crisis.

How is Putin profiting from Europe’s dependence on Russian energy?

Biden accused Putin of using his country’s energy supplies to “coerce and manipulate his neighbors” and “drive his war machine”.

Putin has already shown he is ready to exploit this dependency by announcing on Wednesday that payments for Russian gas will have to be made in rubles for “hostile countries”.

It could prove even more complicated for Europeans, who must balance their dependence on Russia with their condemnation of a war that has forced more than 3.7 million Ukrainians to flee their country.

“I guess people are going to look at their contracts first and demand that the contracts be honored,” Noël said of Russia’s European customers. “However, there is no appetite in Europe for a sharp escalation of the energy crisis, and therefore governments would likely ask European companies to comply, forcing them to source Russian currency.”




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