Competition, sanctions and the new geopolitics of Russian gas
IN JANUARY 2009 Gazprom, Russia’s state-owned energy giant, cut off gas supplies through Ukraine, one of several disputes in which Russia wielded its energy might. Eleven years later, it seems poised to become even more dominant. Europe’s gas production is declining. Russia has both rising supply and new ways to export it. On January 8th President Vladimir Putin celebrated the launch of TurkStream, a pipeline to bring Russian gas to Europe. American sanctions on Nord Stream 2, a controversial gas pipeline from Russia to Germany, required pipe-laying companies to wind down activities by January 20th. That will delay the project, not stop it.
Yet on January 12th Ditte Juul Jørgensen, the European Commission’s director-general for energy, told industry experts gathered in Abu Dhabi that Europe had become less vulnerable: “Our energy security and our longer-term security is in a different situation now compared to what it was in 2009.” Indeed, Europe has sought not energy independence, but energy competition. As gas courses through new Russian pipelines, that will be put to the test.
Europe’s gas market has been transformed in the past decade. Demand fell after the financial crisis and has not fully recovered, in part due to a ramp-up in renewables. Australia and America have helped bring a boom in liquefied natural gas (LNG)....