From Russia to America: Europe's gas crisis and the risky dependency that persists
In 2021, Russia supplied Europe with 25% of its petroleum and 45% of its gas. The invasion of Ukraine by Russia significantly altered the geopolitical situation, necessitating a shift away from these tainted hydrocarbons.
Following Russia's invasion, gas imports from Russia to the EU have declined substantially. This decrease has significantly been counterbalanced by an increase, primarily from the United States, in the import of liquefied natural gas (LNG).
As noted by the European Commission, the United States supplied over 50 billion cubic meters of LNG from January to November 2022, more than twice the entire quantity for the previous year (over 22 billion cubic meters).
Annual gas consumption in Europe reaches 412 billion cubic meters, mainly used for electricity generation, home heating, and industrial processes. Based on EC data, gas still heats over 30% of households in the EU. The total import of this commodity accounts for 83%.
In July 2022, for the first time, the United States outperformed Russia in terms of deliveries to the EU.
Gas: The New Risky Fuel
However, as Bloomberg highlights, Europe seems to be stuck in a cycle of one risk replacing another. Instead of substituting Russian fuel with newer renewable generation sources, the continent increasingly leans on supplies across the Atlantic. After all, the supplier may have changed, but the dependency persists.
In the meantime, the US has already hinted that its export of natural gas may also cease.
Last Friday, U.S. President Joe Biden's administration temporarily halted issuing new permits for exporting liquefied natural gas. During this interval, they will assess the impact of LNG exports on America's energy costs, security, and the environment.
"We will examine the impact of LNG exports on energy costs, America's energy security, and our environment," declared the U.S. President.