Equilibrium & Sustainability

Baltics cut off Russian gas, but Germany, EU face struggle

AP-Martin Meissner
FILE -A worker rides his bicycle to the BP oil refinery Ruhr Oil in Gelsenkirchen, Germany, Monday, March 28, 2022. The German government said Wednesday it was triggering the early warning level for gas supplies amid concerns that Russia could cut off supplies unless it is paid in rubles. (AP Photo/Martin Meissner, file)

Pressure is mounting on the European Union to abandon Russian gas supplies as individual countries begin turning off the tap.

The Baltic states of Lithuania, Latvia and Estonia became Europe’s first region to abandon Russian gas supplies entirely this weekend, and they urged other nations on the continent to do the same.

Lithuania, the first individual EU nation to make the move, declared on Saturday that the country was acting “in response to Russia’s energy blackmail in Europe,” according to a news release from the country’s Energy Ministry.  

But whether this leads to other countries in Europe abandoning Russia’s gas is a big question.

German Finance Minister Christian Lindner on Sunday said Russia’s crimes could not go unanswered, but on Monday argued a full-scale embargo would hurt Germany more than Russia.

“We must plan tough sanctions, but gas cannot be substituted in the short term,” Lindner told reporters before meeting with the Eurogroup, the informal body of EU finance ministers.

“We would inflict more damage on ourselves than on them,” Lindner said.

Germany is in a particularly difficult position, as it imported about 55 percent of its gas from Russia last year. The EU as a whole gets about 40 percent of its gas from Russia.

The Baltic states comparatively import much less gas from Russia. Lithuania received about 26 percent of its gas from Russia directly last year, according to Bloomberg. The country will now rely on liquefied natural gas (LNG) imports from the U.S. and Norway, Bloomberg reported, citing the country’s energy minister.

Morgan Bazilian, a public policy professor at the Colorado School of Mines, told The Hill that Lithuania eight years ago developed a floating storage and regasification unit at the country’s Klaipėda LNG terminal, which enables the country to take in gas from other countries.

“They were able to make the statements today because of planning they had done eight years ago,” he said. “And Latvia and Estonia are sort of coming along with them.”

While Lithuania might not be an example of how nations can “get rid of Russian gas” overnight, the country is “a very good example of planning for your energy security and not just leaving it to market forces,” Brenda Shaffer, an international energy specialist at the Naval Postgraduate School, told The Hill.

Lithuania’s gas transmission system has been running without Russian gas imports since April 1, with zero flow of Russian gas coming through the Lithuanian-Belarusian interconnection, according to the country’s Ministry of Energy.

“From this month on — no more Russian gas in Lithuania,” Lithuanian President Gitanas Nausėda tweeted on Saturday.

Lithuanian Prime Minister Ingrida Šimonytė followed up on Sunday by tweeting that “from now and so on Lithuania won’t be consuming a cubic [centimeter] of toxic Russian gas.”

Meanwhile, Uldis Bariss, CEO of Latvia’s Conexus Baltic Grid, told Latvian radio this weekend that “since April 1st Russian natural gas is no longer flowing to Latvia, Estonia and Lithuania.”

The Baltic states are much smaller economies than other nations in Europe that import Russian gas, and as a result the moves, while important, will have a smaller affect on Russia than if larger nations turned off the spigot.

Bazilian noted that while the shift “gives the right optics,” it is “a relatively small piece of the European puzzle.”

“It’s very small in comparison to, say, Germany or Italy or other countries that rely on natural gas,” Bazilian said.

In the short to medium term, a larger European embargo on Russian energy is unlikely given the dependence of nations such as Germany on Russian gas, Shaffer said.

Germany and other big EU members also have much larger industrialized manufacturing sectors dependent upon Russian gas. This has given Russia leverage over Germany, which before Moscow’s invasion of Ukraine was backing a controversial new pipeline from Russia.

“For a country like Germany, which is heavy-manufacturing based — like steel and cars and other equipment — the question of the price of the gas has very different economic impact than for a country like Lithuania, which is mostly light industry,” Shaffer said.

Shaffer also noted the tension between European climate goals and the present need to bolster traditional energy needs through more pipeline projects and LNG infrastructure.

“There is a conflict in a sense between European climate goals and building new infrastructure that would ensure their energy security,” Shaffer said. “In a strange way, almost, the climate camp would prefer the status quo.”

While the decision of the Baltic states to stop importing Russian gas will not likely carry over to the entire EU, Bazilian described the weekend’s events as “a symbol that the rest of Europe is really serious about this” and that the continent “is going to look to diversify from Russia.”

One way to do that will be through U.S. LNG supplies. President Biden recently announced the U.S. would be supplying an additional 15 billion cubic meters of gas to Europe this year.

The EU has also said it is going to release a pathway on how to wean off Russian energy imports by 2027, and Bazilian expressed confidence that the U.S. “will be part of that solution.”

Despite its small size, the Baltic region is yet “another market that will be importing LNG,” according to Shaffer. And while that won’t be solely from American sources, more market demand for LNG in general also means more demand for American LNG, she explained. 

Lithuania’s capital, Vilnius, also houses the NATO Energy Security Center of Excellence, which reflects how the country views energy “as a really important issue of national security,” Shaffer added.

“They’re sort of like the main voice within NATO on these issues, so I think it will have some impact on NATO thinking,” she said. 

Tags Climate change Estonia EU Germany Latvia Lithuania LNG Morgan Bazilian Russia Ukraine

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