According to Bloomberg article published on January 30, 2023, it’s widely accepted that turning away from Russian energy has committed Europe to long-term dependence on costly imports of liquefied natural gas, raising questions about the competitiveness of its industry for many years to come.
A new report from oil giant BP Plc says this doesn’t have to be the continent’s fate.
“The extent to which the loss of Russian pipeline exports requires the EU to source alternative supplies of gas depends on how successful it is in reducing its demand for natural gas as it decarbonizes its energy system,” BP said in its Energy Outlook 2023 published on Monday.
Since Russia’s invasion of Ukraine almost a year ago triggered an energy crisis, LNG has been crucial for Europe.
Surging imports of the super-chilled fuel refilled the continent’s stockpiles even as Russia choked off pipeline gas. Those ample inventories are the reason that European homes have stayed warm and illuminated, and energy prices have dropped, through the winter.
If the European Union continues on this trajectory, it will become heavily dependent on LNG in the long term. By 2030, the continent will be importing more than 150 billion cubic meters of the fuel each year, an increase of about 70 billion cubic meters from 2019, according to BP.
However, if the bloc were to fully implement policies to achieve net-zero carbon emissions by 2050, its LNG imports at the start of the next decade could be lower than in 2019, even without Russian supplies.
“Faster gains in energy efficiency, rapid growth of wind and solar power and increasing electrification of final energy consumption” could mean that EU natural gas demand in 2030 is around 50% below 2019 levels, according to BP. “This reduction in demand is greater than the loss of Russian pipeline gas imports, implying that the level of LNG imports needed to meet the EU’s domestic gas consumption in 2030 is lower than in 2019.”
That’s not where Europe is headed today, and BP takes care to point out that it’s not making any predictions about what will happen, merely outlining possible scenarios. But Spencer Dale, the company’s chief economist, also notes that an increasing focus on energy security since Russia’s invasion of Ukraine “is likely to accelerate the pace of the energy transition.”
