With the intensification of sanctions against Russia by the United States and Europe, the problem of Europe's heavy dependence on Russia for energy has become more prominent.
Recently, the European Commission released a roadmap for energy independence, announcing that the EU will reduce the EU's demand for Russian natural gas by two-thirds by the end of 2022 and gradually wean itself off Russia's dependence on fossil fuels by 2030.
EU weaning off Russian gas, difficult
According to the relevant documents issued by the EU, the EU's measures to achieve the above-mentioned goals mainly have three points.
One is to expand the use of renewable energy.
Franz Timmermans, Vice-President of the European Commission, said that according to the EU's relevant plans, the EU will complete the extraction of 35 billion cubic meters of biomethane by 2030, which is equivalent to twice the current EU methane use; expand solar cells The goal is to reduce the use of natural gas by 2.5 billion cubic meters by the end of 2022; the expansion of wind farms will save 20 billion cubic meters of natural gas by then.
The second is to find new sources of natural gas supply.
The European Commission proposes to store up to 90% of the EU's natural gas strategic reserves before the heating season in October each year, compared with the current level of only 30%.
Previously, the EU imported about 155 billion cubic meters of natural gas from Russia every year.
According to the preliminary intention, the EU will increase natural gas imports from Qatar, Egypt, the United States and West African countries to replace one-third of the total gas imports (about 50 billion cubic meters).
In addition, about 10 billion cubic meters of natural gas is imported from Algeria, Azerbaijan and Norway through existing pipelines.
The EU will also purchase natural gas from Asian countries such as Japan, South Korea, China and India as appropriate.
The remaining gap will need to be filled with renewable energy sources such as biomethane and hydrogen.
The third is to improve energy efficiency and reduce energy consumption.
Timmermans said the EU hopes to save 14 billion cubic meters of natural gas by the end of this year by improving energy efficiency.
Under the current climate change plan, by 2030, the consumption of natural gas in the EU will be reduced by 30%, which is equivalent to saving about 100 billion cubic meters per year.
However, in the context of the Russian-Ukrainian conflict, it is expected that the implementation of the plan will be accelerated.
However, some media wrote that it will be a long-term process for the EU to abandon the use of Russian natural gas, because the supply from Russia currently accounts for more than 40% of Europe's total natural gas imports, and it will take the EU nearly 10 years to get rid of this situation.
But the immediate issue facing the EU could be retaliation from Russia, such as cutting off gas supplies to Europe, so the EU must prepare for the possibility of Russia cutting off its gas supplies.
The EU's approach to defuse this risk in the short-term, the article suggests, is to join the transatlantic energy agreement with the US, Canada and other major energy producers to ensure access to readily available energy alternatives, thereby enhancing its confrontational capabilities.
The main content of the transatlantic energy agreement should be natural gas cooperation. Since the beginning of this year, the United States should help Europe to replenish natural gas reserves in time for the next heating season by exporting natural gas to Europe.
But even so, this will remain a major challenge for the EU.
Only with record LNG imports in the first half of this year can Europe secure sufficient gas reserves.
Oil-producing countries increase output to stabilize oil prices, harder
In terms of oil, the EU hopes to take measures together with the United States to ensure that the international oil market has sufficient production to make up for the vacancy left by the Russian oil embargo. However, because the United States and Europe cannot control global oil trade, this requires cooperation with Saudi Arabia, the United Arab Emirates and Other OPEC producers coordinate, but not all of them are willing to accept such an approach.
The reporter interviewed an unnamed OPEC staff member who said that OPEC members will not release crude oil production capacity in the short term to stabilize oil prices, but if the United States and Europe impose a comprehensive oil embargo on Russia and continue for a long time, OPEC Some member countries may increase production to partially make up for the market vacancy left by Russia and achieve the goal of lowering oil prices to a certain extent, but it may not be effective.
Before the end of the Russia-Ukraine conflict, international crude oil prices will continue to fluctuate at high levels.
The reason is that, first of all, OPEC clearly stated that the current fluctuations in the crude oil market are caused by geopolitical crises, rather than changes in supply and demand fundamentals. That is to say, once the conflict between Russia and Ukraine ends, oil prices will immediately fall back to the fundamentals before the conflict.
If OPEC rashly increases production in the short term at this time, it is likely to cause a huge change in the fundamentals of oil supply and demand after the geopolitical problems ease, and oil-producing countries will suffer greater losses at that time.
Similarly, it is unlikely that the US shale oil production will increase significantly. In addition to pursuing the same goal of market stability as OPEC, what is more important is that the Biden administration still favors clean energy, and the strict policy on shale oil production has not been relaxed.
Secondly, OPEC lacks the ability to significantly increase production. The oil price crash in 2020 will have a great negative impact on global oil and gas upstream investment. Saudi Arabia, Kuwait, Iraq and the United Arab Emirates are the only OPEC member countries with surplus production capacity. That adds up to 3 to 4 million barrels per day, and it will take 3 to 6 months to release it to the global energy market.
Russia's production capacity is 7 million barrels per day, so even if the above four countries fully release their production capacity, they cannot completely make up for the market vacancy left by Russia.
Finally, the current situation has forced the negotiations on the Iranian nuclear issue to accelerate, and there may be a breakthrough in the negotiations on the Iranian nuclear issue.
As all parties generally believe that the negotiations on the comprehensive agreement on the Iranian nuclear issue have entered the "final stage", Iran is preparing to return to the international oil and gas market after the agreement is reached.
Iranian oil production and exports are expected to return to levels before the U.S. imposed sanctions on Iran in 2018, or 2.5 million barrels per day.
The release of Iranian production capacity is likely to ease current oil prices, so other OPEC members have little interest in additional production increases.
Like natural gas, the EU relies heavily on Russian oil, with more than one-third of its oil imported from Russia.
Although EU member states have never reached an agreement on the embargo on Russian oil, the EU is also negotiating on relevant measures: on the one hand, it is to coordinate the release of crude oil reserves among member states. The strategic crude oil reserves of EU member states usually last for 90 days.
However, a source said that under appropriate conditions, the crude oil reserves of some member countries can be maintained for one year, and the member countries will strengthen consultations on the joint release of crude oil reserves to avoid the situation of individual member countries' crude oil supply cut off, and at the same time to crack down on individual crude oil supply. Merchant hoarding behavior.
On the other hand, it is using this time window to actively explore new crude oil import channels. Under the circumstance that the US and OPEC may not increase production in the short term, on the one hand, the EU will increase imports from Kazakhstan, Azerbaijan, Egypt and other smaller oil companies. Oil-producing countries will also try to coordinate with sanctioned Iran and Venezuela.
(Jiao Shusong, our correspondent in Vienna, Vienna, March 22)