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How to break away from dependence on Russian fossil fuels as quickly as possible? The equation is not so simple for Europeans, 40% of whose gas imports come from Russia. Because of this dependence, there is no question of decreeing an embargo as the United States has done. Also this Thursday and Friday, the Heads of State and Government of the European Union are working on the longer-term future of their supply. An informal meeting opens in Versailles, near Paris.
This is the first meeting at this level since the Russian invasion of Ukraine. It had been planned for a long time to talk about energy supplies… already a headache for Europeans even before the outbreak of the conflict.
But since then, it is also a question of avoiding feeding the Russian war machine.
Tuesday, Joe Biden decided on an embargo
For Europeans much more dependent on Russian fossil fuels, it is impossible, at least today. This will not happen overnight, said German Chancellor Olaf Scholz this week, the main opponent of an embargo and whose country is most concerned by this dependence on Russia.
600 million euros a day, this is what purchases from Russia represent
And it is only increasing month by month, and given the explicit threats made by the Russian Deputy Prime Minister this week to cut supplies in the event of sanctions, action must be taken at the risk of running out of gas next winter. .
We are not expecting any decisions at the end of this European meeting in Versailles, but the partners should set themselves political guidelines which will be implemented in the months to come.
The European Commission wants to diversify supplies by continuing discussions with alternative suppliers Azerbaijan, Algeria, Qatar and the United States. The latter already supply liquefied natural gas (LNG).
Much more expensive alternatives for Europe
Because prices are skyrocketing… In addition, specific installations are needed for LNG. The European Commission recommends better coordination of the use of its storage and transport infrastructures between countries. To anticipate supply disruptions next winter, it proposes requiring its members to fill 90% of their storage capacity by October 1 each year. To also consider joint purchases, as requested by some States. In the longer term, according to the European executive, the European production of biogas and renewable hydrogen should be increased. With all these efforts, the EU executive thinks it can do without two-thirds of its current imports from Russia by the end of the year. And 100% by the end of the decade.
For States, the immediate challenge is to limit the impact of soaring prices
In France, gas prices have been frozen since last fall and could remain so until the end of the year. To facilitate the task of the States, the Commission would consider relaxing the conditions for public aid as it had done during the Covid crisis. Even allow them to tax the profits of energy companies to ensure the financing of support measures for populations and businesses.
Financing these measures through joint debt, as was the case at the start of the health crisis, is on the table, but the option is again likely to be strongly divided. While the crisis threatens the hoped-for economic recovery, soaring prices threaten the social order. Some states no longer have any reservations about discussing more debatable options. Like that of going back on their environmental commitments. Nuclear power is back in the debate in Belgium, coal is regaining its appeal because its price has fallen since the outbreak of the war.
In short
In this context, the Minister of Energy of the United States asked the oil companies of her country to produce more oil. And this to respond to the surge in prices that worry in a country already plagued by high inflation.
In front of an audience of industrialists gathered for an annual conference on energy in Texas, the minister asked American companies to be on a war footing when they currently tend not to accelerate their production of fear to get stuck in the event of a market reversal. Regarding the climate objectives to which her country is committed, the minister insisted that it was possible to reconcile the urgency of the current energy crisis and that of the climate.