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How much do we depend on Russian gas?

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In these weeks of diplomatic crisis provocation The possibility of a Russian invasion of UkraineOne of the most discussed issues is Europe’s dependence on Russian natural gas imports. Natural gas, which is an essential part of the energy supply and is used for cooking and building heating among others, is always cited as the main cause, while the United States has an aggressive attitude towards Vladimir Putin’s government, and various European countries, Including ItalyThey are more careful and accommodating.

According to the latest data Eurostat Available, in 2019, the European Union imported 41.1 percent of its natural gas from Russia.

If the Russian government decides in retaliation to cut off gas supplies, in response to a severe political or even military confrontation with Europe, the consequences will be very serious. This is an argument often used by the most skeptical of Europe about the confrontation with Russia, which has reasons, but to a certain extent. The European stock system is really flexible, and as ineconomic, will be able to sustain an interruption in supplies Also for a very long time. But Europe’s dependence on Russian gas is undeniable, and there is no doubt that a clash over energy supplies would cause serious problems.

Moreover, Italy is particularly dependent on Russian gas.

According to data from the Ministry of Environmental Transformation, in 2020, 43.3 percent of natural gas imported from Italy came from Russia, which is by far the number one supplier of gas in the country. In Italian supplies, Algeria (22.8 percent), Norway and Qatar (both about 10 percent) play a major role. If Russia decides to stop gas supplies altogether, Italy will lose nearly half of its imports.

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In 2020, natural gas in Italy accounted for 31% of the country’s total energy consumption. Almost all gas is imported: domestic production accounts for less than 10 percent of the total.

The situation in Europe is more diverse, but the dependence on Russian gas is nevertheless great. The large country most exposed is certainly Germany, which imports about half of its gas from Russia, while in other smaller countries, such as Austria and Slovakia, the dependence is greater.

On the other hand, France is relatively less exposed, mainly thanks to France Extensive use of nuclear energy.

However, this does not mean that Europe is irreparably subject to Russia’s energy blackmail.

First of all, because blackmail works on both sides: just as Europe needs Russian gas, Russia needs the massive revenue it gets from selling it. According to the Organization for Economic Cooperation and Development, about 40 percent of the Russian state budget depends of oil and gas export earnings. For this reason, although Europe has been dependent on Russian gas for decades, the country has never cut off its supplies, even in the most opposing periods of the Cold War.

In any case, both Russia and Europe have moved in recent years to reduce their dual dependence as much as possible.

L ‘economic a few days ago Try data collection and analysis To try to understand what will happen if Russia really decides to cut off gas supplies for the next three months (with the advent of spring, the need for gas to heat buildings decreases, and its value as a weapon of blackmail is eliminated). The upshot is that while the disruption would be a severe blow to both the Russian and European economies, it would not be disastrous for either.

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For Gazprom, the Russian state company that manages the extraction and export of natural gas, stopping gas sales to Europe will mean a loss of 203-228 million dollars per day: within three months, losses will reach 20 billion. It’s a huge amount, but it would be easy enough for Russia, whose central bank has reserves of $600 billion.

However, for Gazprom, interruptions in supplies will also pose a very serious reputational problem: even after the crisis is over, it will become very difficult to conclude new contracts not only with European countries, but also with other large countries such as China, which may want to avoid dealing With an unreliable partner. In addition to large and important infrastructure projects, such as Nord Stream 2 . pipeline, can be considered canceled if Russia really decides to hit Europe by cutting off gas: Gazprom’s business in Europe and beyond will be in jeopardy, perhaps permanently.

On the other hand, for Europe, the interruption of Russian gas supplies does not mean that it will be without electricity and heating as of tomorrow. All countries, including Italy, have large stocks of gas, which have been reduced recently but still allow to make up for the lack of Russian imports for a few months (between two and four, depending on estimates and depending on winter hardiness).

Moreover, Europe could move quickly to seek alternative supplies. One of the most likely is the so-called liquefied natural gas, the same pressurized, refrigerated and factory liquid product, which can be transported by ship and does not require gas pipelines. Europe has a large and largely unused capacity of regasifiers (the plants used to regas LNG for use as an energy source) that would partially mitigate the effects of Russian supply cuts.

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In recent days, the US government, aware of Europe’s vulnerability in terms of energy, launched a contingency plan for Substitution of gas imports from Russia With LNG coming from the United States itself or from other countries such as Qatar and transported by ship if necessary. However, this plan is somewhat vague at the moment, and serves above all to reassure European leaders that they will not be left alone to bear the consequences of any energy retaliation from Russia.

Therefore, for Europe, the problem will not be with supplies so much as with prices: it is possible to replace part of Russian gas imports, with a lot of effort, but the increase in costs will be significant – and this will happen at a time when the market is already in crisis, and prices Energy is at its highest level in years. This would likely entail the need for much greater popular support than governments have already implemented.

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