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Winter Is Coming: Europe’s Energy Future Looks Bleak

Walter Russell Mead, The American Interest

Europe’s Russia problem isn’t over yet, not by a long shot.

Gazprom warned Europe to expect supply disruptions later this year when the weather gets cold again. Energy concerns have featured heavily in the ongoing standoff between Russia and Europe over Ukraine; Europe relies on Russia for a third of its gas, some 40 percent of which travels through Ukraine. Two weeks ago, Russia cut off its supply to Ukraine, after failing to come to terms on pricing and an overdue bill. Gazprom is still sending gas through Ukraine to its other European customers, and it doesn’t look like Kiev has started siphoning off that supply. However, in the past, Ukraine has poached that western-bound gas in times of need, especially during winter, when demand is highest. The WSJ reports:

“Although the Europeans aren’t feeling the problem now, Ukraine isn’t pumping enough gas into its underground storage, and the problem may become acute in the coming months,” Gazprom Chief Executive Alexei Miller said. […]

Mr. Miller warned, however, that if Ukraine fails to refill its storage facilities, in several months “we may hear about it taking the gas destined for Europe illegally.”

Accusing Ukraine of stealing Russian gas in transit to the European Union, Gazprom switched off the gas that was piped through its neighboring country during a particularly cold winter in 2009. So far, Mr. Miller said, Ukraine is meeting its transit obligations, but he said he is sure “what happens once, will happen again.”

Europe has worked to secure alternate pipeline routes to prevent these kinds of disruptions, but one of these projects, the so-called South Stream pipeline, recently hit new setbacks. But even if these alternatives are built, Europe will still be subject to the whims of a belligerent Moscow, which has shown little hesitation when using energy as a geopolitical tool. Europe will need to diversify away from Russian gas—not just diversify the ways it imports it—if it wants to beef up its energy security.

The American Interest, 1 July 2014