US, EU announce partnership to undercut Russian energy

BRUSSELS / PARIS

The United States and European Union on March 25 announced a new partnership to reduce the continent’s reliance on Russian energy, a step top officials characterized as the start of a years-long initiative to further isolate Moscow after its invasion of Ukraine.

U.S. President Joe Biden asserted that Russian President Vladimir Putin uses energy to “coerce and manipulate his neighbors” and uses the profits from its sale to “drive his war machine.”

Biden said the partnership he announced jointly with Ursula von der Leyen, head of the EU’s executive arm, will turn that dynamic on its head by reducing Europe’s dependence on Russian energy sources, as well reducing the continent’s demand for gas overall.

Von der Leyen said it is important for Europe to shift away from Russia and toward energy suppliers that are trustworthy, friendly and reliable. “We aim to reduce this dependence on Russian fossil fuels and get rid of it,” she said.

Under the plan, the U.S. and other nations will increase liquified natural gas (LNG) exports to Europe by 15 billion cubic meters this year, though U.S. officials were unable to say exactly which countries will provide the extra energy. Even larger shipments would be delivered in the future. .

Although the initiative will likely require new facilities for importing LNG, the partnership is also geared toward reducing reliance on fossil fuels in the long run through energy efficiency and alternative sources of energy, according to the White House.

Almost 40 percent of the European Union’s natural gas comes from Russia to heat homes, generate electricity and power industry.

The U.S. currently ranks as the third-largest LNG exporter with exports of 75 million tons last year. Australia sits on top of the list with exports of 83 million tons followed by Qatar with 81.3 million tons.

Getting more LNG to Europe could be difficult, even though the U.S. has been dramatically increasing its exports in recent years. Many export facilities are already operating at capacity, and most new terminals are still only in the planning stages.

Germany moves to wean itself off Russian energy

Germany said on March 25 it was drastically slashing its energy purchases from Russia amid Moscow’s invasion of Ukraine, with oil imports to be halved by June and coal deliveries to end by the autumn.

“In recent weeks, together with all relevant players, we have made intensive efforts to import less fossil energy from Russia and broaden out our supply base,” said Economy Minister Robert Habeck.

“The first important milestones have been reached to free us from the grip of Russian imports,” he added.

Before Moscow’s invasion of Ukraine, a third of Germany’s oil imports, 45 percent of its coal purchases and 55 percent of gas imports came from Russia.

With calls for an energy embargo growing louder, companies with Russian suppliers are letting their contracts run out and turning to other suppliers “at a crazy speed,” said Habeck.

As a result of the contract switches, oil deliveries from Russia can already be seen dropping by 25 percent, halving by the middle of the year and drying up completely by the end of the year.

Likewise, energy companies were switching contracts to ditch Russian coal. “By the autumn, we can be independent from Russian coal,” said the economy ministry.

On gas imports, however, Habeck underlined that it was more complicated, and Germany is expected to be able to largely wean itself off Russian deliveries only in mid-2024.

The pressure has been increasing on Germany in particular but the EU has so far avoided following in the footsteps of the United States with an embargo on Russian energy imports.

Putin on March 23 upped the ante by demanding payments for gas in rubles, something that Germany has said is a breach of contracts.

At a two-day meeting of the International Energy Agency chaired by U.S. Energy Secretary Jennifer Granholm, governments floated a raft of ideas to cut energy use, tap new supplies of gas, oil and coal beyond Russia, and ramp up the use of renewable power.

The 31 global energy ministers attending in Paris were “united in seeing how we can do what we can to both increase supply, adopt efficiency measures” and accelerate the transition to renewables, Granholm said at the meeting’s conclusion on March 24.

IEA Executive Director Fatih Birol said member countries were pursuing separate energy policies, but with “one single target: reducing, radically, Russian oil and gas imports.”

Birol warned that “the fight against climate change shouldn’t be a victim of Russia’s invasion.” He noted that recent figures showed the global emissions increase last year was the highest in the history, as economies rebounded from the coronavirus pandemic.