The EU and Russia's gas
21st November, 2008
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Conventional wisdom has it that Russia dominates Europe’s natural gas market, and that European imports of Russian gas are growing and can only continue to grow. This supposedly places the European Union in a dangerous state of dependency and compromises its strategic position towards Russia. All sides of the debate over Europe’s Russia policy share these premises, including those “realists” who argue that dependency on Russian gas makes it irresponsible for the EU to pursue policies that antagonize Moscow.
But the conventional wisdom is wrong: Europe’s gas supply is not dominated by Russia, or, for that matter, by any other exporter.
Since 1980, and particularly since 1995, Europe has considerably diversified its sources of gas imports. Today, for the EU as a whole, gas supply diversity is not a pressing problem.
Over the past 40 years, natural gas consumption has grown steadily in Europe, and much faster than primary energy consumption. (Gas now accounts for around a quarter of energy use in Europe.) Since the mid-1970s, imports have covered all this growth. In 2007, Europe imported 300 billion cubic meters (bcm) of gas, accounting for 60 percent of consumption.
Russia remains the largest exporter of gas to the EU, with total annual exports of 130 bcm today. But since the early 1980s, and particularly over the past decade, import growth from other countries has outpaced that from Russia. Since 1990, 80 percent of the growth in European gas imports has originated from countries other than Russia, especially Norway, Algeria, Nigeria and the Middle East. Accordingly, Russia’s share of EU gas imports has declined sharply, from 75 percent in 1990 to just over 40 percent today.