Skip to main content
7 of 9
deleted 1 characters in body
Razie Mah
  • 2.8k
  • 17
  • 25

(I'm cutting out question 2 because it's not about gas and the answers already very long.)

Have EU nations made any plan to counter possible gas crisis?


Politicians claim the US plans to allow Europe to purchase liquified natural gas through an expedited process. Four European nations have expressly requested this aid as the US is the worlds largest natural gas producer-it is however very new to exports in natural gas. Exporting natural gas requires cooling the gas to a liquid for shipping.

So in reality, liquified natural gas would not be available to Europe from the US by most measures 5 years, since other nations have already signed long-term contracts for American gas. I find this an unsuitable solution. We can assume most nations strategic gas/oil reserves will only last one year to 18 months. Perhaps, nations like Qatar could increase exports to the EU, which appears to be the trend that was already developing.

There are possibly two good, workable alternatives:

The US is expected to overtake Saudi Arabia to become the world's largest producer of crude oil by 2016, although some energy experts suspect may have already due to new "tight oil" retrieval technologies. It is currently illegal to export crude oil from the US, so producers must "refine" it in some way and this is expensive. The back-up glut of crude oil supplies that have not been brought to market in the US could be made available for purchase by European governments. This would relieve some of the strain caused by a break with Russia.

Europe could also increase its imports of US coal. It is currently the largest importer of US coal. This requires no changes in any laws, but it might be unpopular.

Unlike with natural gas, coal-export facilities are already up and running. Unlike the convoluted regulations governing natural gas exports, coal can be traded freely. And there's no need for European countries to build expensive new terminals to handle coal imports.

There is one problem, of course: Coal is a lot dirtier than gas, with about twice the emissions of greenhouse gases when burned for power. For years, Europe has tried to curb its emissions and make its energy sector cleaner, even though expensive local gas and cheap U.S. coal have made that tough the last couple of years.

Source: International Energy Agency (IEA) 2012 World Energy Outlook


Who will sell the US-EU gas if not Iran?

I'm going to alter the question to: Who will provide natural gas to the EU? The US is the worlds largest producer of natural gas, and Iran, I hope, does not intervene in this conflict. The EU gets its non-Russian natural gas either from domestic production or from Qatar. Both of these sources have been increasing in importance. Stratoil is the most important and it has equal market share as Gazprom in Germany. The sources might be able to increase output some, but not enough to completely cover deficit if Gazprom pulled out. The EU would need to convert some of their power stations to use most probably coal for a few years.


Does Russia have any other countries to sell gas to?

As far as I can tell, no. They will only be able to sell to the countries they currently are selling to and now minus Europe, which represents a loss of $100 million/ day. The reason is that Russia has failed to develop liquified natural gas technology, so it must rely on pipelines. Africa, the Americas, Australia and most of Asia are therefore unreachable markets. They scared off foreign investors that could have helped them develop these technologies years ago when they shut off gas to Europe in 2005 and other scandals. Russia does border China, but the Chinese government refused to except Gazprom's archaic higher gas prices years ago and has long since started developing their own rival pipelines, gas fields, advanced fracking technology, liquified gas technology, and China plans to import from the US. The problem is the way Gazprom is calculating the price, not actually how high it is. If Russian prices crashed, maybe China would buy anyway, but they need to build a pipeline and that would take a few years. Russian gas export volumes peaked in 2005 and have trended downward since.

India is still a big potential customer, but I don't think Russia will be able to supply them, because the Saudis and US instead. Plans have been ongoing since the 1990s for different ways to supply India with either oil or natural gas but due to India's difficult geography one has yet to be realized or even started that would involve Gazprom. The US, in a very obvious attempt to challenge Russian dominance in the area, helped make possible the Trans-Afghanistan Pipeline.

Expected to be completed around 2017, the pipeline will transport Caspian Sea natural gas from Turkmenistan through Afghanistan into Pakistan and then to India.
Estimated cost of the pipeline project is reported at $7.6 billion.

The original project started in 1995 and has many starts and stops due to the violence in Afghanistan, but its the only actual pipeline to India I find being built and it will be completed some time in the next few years.

Razie Mah
  • 2.8k
  • 17
  • 25