Title: Russia’s gas pipeline strategy and Europe’s alternatives – European Council on Foreign Relations
Headings: Russia’s gas pipeline strategy and Europe’s alternatives
Russia’s gas pipeline strategy and Europe’s alternatives
Author

Content: So if Europeans need Russian gas they should build the missing links connecting to Gazprom’s proposed pipelines – the Turkish Stream and the recently-announced expansion of the Nord Stream link – themselves, or so goes the current thinking in Gazprom and the Kremlin. However, neither Turkish nor Western companies are rushing to build these pipelines. What is left for European energy security is the possibility that Western energy companies may take risks in dealing with Ukraine’s transit issues post-2019. Indeed, this may seem unpalatable for risk-averse Western companies; however, recent policy and market developments in Ukraine – aimed at energy reforms following Europe’s guidelines – give us some optimism that there might be some degree of ‘normalisation’ of energy trade on the continent in the next few years. To ensure this normalisation, however, Europe should keep engaging with Ukraine and Turkey – the two most important transit countries for European gas markets – to make sure that energy market liberalisation processes there do not stall due to domestic political dynamics and short-term energy populism. Europe without Russian gas through Ukraine (ca. 70 billion cubic metres per year) is tantamount to Northeast Asia without Japan’s entire nuclear power fleet
So, what will happen to European gas markets, should Moscow stop using Ukrainian pipelines after 2019? First, Europe might be left without Russian gas going through Ukraine by the early 2020s. The implications of this scenario may be rather dramatic for Europe, had we not lived through a period of rising energy demand, and by implication prices, post-Fukushima.