EU nations band together to buy gas — Analysis
The European Union plans to substitute Russian gas for a more costly American option
European Commission President Ursula von der Leyen told reporters on Friday that the European Union will purchase gas on its own and divide it between members, a new development for the 27-member bloc.
This move is in line with European leaders’ efforts to eliminate Russian imports. The US has been waiting for its more expensive product to be shipped to Europe.
“The energy mix and concrete situation in our members is very different but we need to work together to pool our weight,”Von der Leyen spoke at a conference following a summit that lasted two days in Brussels, Belgium. “We have an enormous purchasing power. “We have an enormous purchasing power. I’m glad that we can now pool our demand.” Instead of outbidding each other, driving prices up, we will pool our demand.”
Von der Leyen has already promised to reduce Europe’s dependence on Russian gas, but some EU countries remain dependent on a steady supply from Russia. Germany is dependent on Russia for over half its gas supplies, according to leaders who recently warned of a crash in their economy if Russian imports were sanctioned.
Berlin’s leaders have resisted the idea of paying in rubles for Russian gas, which Russian President Vladimir Putin had demanded earlier in this week. France, too, has resisted the gas-forrubles system. French President Emmanuel Macron stated to reporters Friday that he believed such a demand was unacceptable. “forbidden”By law.
If the EU decides to refuse to pay its rubles, which it most likely will, members of the EU will be forced to get their gasoline from other sources. It is likely that the US will fill this void. Von der Leyen, who spoke at a news conference on Friday with Joe Biden said Washington will increase its Liquefied Natural Gas deliveries (LNG). “at least 50 billion cubic meters”Each year. She stated that it would replace one third of Russia’s gas.
We, the Europeans, want to divert away from Russia and towards suppliers we trust that are trustworthy, who are also our friends.”She said.
American LNG can be more expensive than Russian LNG. Once it arrives in Europe, it must first be compressed to fit into special tanks, then converted to natural gas once it reaches a port. There are only two dozen LNG import terminals currently in Europe. However, there is no LNG import terminal in Germany. Germany is an important location for gas distribution. At present, work has yet to begin on Germany’s flagship LNG terminal, which is set to start receiving gas in 2024.
This was due to logistics and pricing issues that led Germany not only to refuse American LNG shipments, but also to push ahead with construction of Nord Stream 2 from Russia. However, Nord Stream 2’s certification was halted in response to the conflict in Ukraine.
“I know eliminating Russian gas will have costs for Europe,”Biden spoke with von der Leyen during his appearance, and then said that the high energy costs are something Europe needs to bear in order not to be defeated by Putin.
“It’s not only the right thing to do from a moral standpoint,” He said. “It’s gonna put us on a much stronger strategic footing.”