Nikos Tsafos Profile picture
Jan 24 6 tweets 2 min read
Lots of discussions these past few days about what happens to European energy (gas) in the event of a conflict in Ukraine. I've been writing and tweeting about this in various places. Here is a thread consolidating those points.
Ukraine in 2022 is not the same as Ukraine in 2006 or 2009. Gas transit is down 70 percent versus 1998. At this moment, gas through Ukraine goes to only a few countries. The affected area is much smaller than in the past.

Read also: csis.org/analysis/can-e…
Can Europe access more LNG? Yes. But it has to bid it away from other markets since there is little production upside. Where? The U.S., Africa, some South America, but mostly Qatar. There are limits to this reshuffle. But in the past Qatar has sent ~3 mmt per month to Europe.
Does Europe have the capacity to import more LNG? Sort of. 30 percent of Europe's LNG capacity is in Spain, which is not much use for this crisis. About a fifth in the U.K. You need to move this gas around and that's not going to be easy.
Can Europe fully replace Russian imports with LNG? No. Russia sent about 180 bcm to Europe last year. At its peak, Europe imported 120 bcm in one year. This January we might see a new high at ~12 mmtons (16 bcm). Europe will need to do more than import LNG.
So much depends on what conflict we're talking about. A short-term interruption of flows through Ukraine is different than a wholesale, Continent-wide cut off in gas. But if you assume the latter, you have to also assume the conflict itself is major. And that changes things. Fin.

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More from @ntsafos

Jan 25
How do you punish / deter Russia? Most options on the table are either too big or too small. One option that isn’t talked about, but should be: targeting Russia’s participation in Europe’s energy transition. This could really hit Russia.

A thread.
Russia is too integrated into the European energy system to attack today. You cannot stop Russian gas exports. You can hit their growth prospects but who cares—they will adapt (or evade). Even NS2 is a poor target too—best case, it’s a reputational loss. Russian power is intact.
But the energy system is changing. Europe is changing. Russia knows this—even if it is sometimes in denial, or wants to taunt Europe. Russia understands that the European Green Deal is an existential threat. Without the European energy market, what is Russia?
Read 6 tweets
Nov 17, 2021
Coming out of COP26, I yearn for a general theory of emissions reductions. I don’t want to talk about ambition, bending the curve, or what countries are proposing to do. I want to talk about *performance*. Are emissions falling? Where? How much? Why?

A thread.
Let me start with my favorite example: California, a state widely seen as a climate leader. Do you know how much California reduced CO2 emissions between 2005 and 2018? 8 percent. Same as Florida. Yes, there are caveats. But still: 8 percent?? Not exactly impressive…
Here is Norway’s oil consumption, the leading market for EVs. Barely a dent visible. I don’t want to minimize Norway’s record in EVs. I wish we could all be like Norway. Over time, it will make a difference. But my point is: look at the math that really matters. It’s unforgiving.
Read 13 tweets
Oct 15, 2021
LOVE this cover!
But the content—so many issues...
Let me just pick a few. Image
What the article says: “Britain, the host of the [COP 26] summit, has turned its coal-fired power stations back on.”

What the data on coal-fired generation actually looks like. Image
I am also struck by the persistence of this idea that underinvestment in gas is the problem. The statement “Too few [LNG] projects are coming on stream” is not quite right. Here is what investment in new LNG projects looks like. Image
Read 7 tweets
Oct 14, 2021
Countries are making big bets on the technologies we need for the energy transition, unlocking enormous opportunity, but also creating the prospect of trade and other conflicts. @CSISEnergy is launching “Energy Rewired” to study how these bets will change the world's energy map. Image
To start with, we will publish country briefs that focus on specific technologies like solar, wind, hydrogen, batteries, CCUS and others. We ask three questions: What is the country’s vision? What is the strategy? What is the geographic focus?
Over time, as we build the data, we plan to tackle higher order questions: which countries might pull ahead? What can we learn from each other? What conflicts or tensions might arise? How can the United States and its partners safeguard their interests in this world?
Read 4 tweets
Oct 13, 2021
With every new WEO come a gazillion new ideas to reflect on and write about. This is no summary of the main points, but some of the data points I found particularly interesting. A thread on the @IEA WEO 2021:
First, we are witnessing a profound transformation in the geopolitics of energy. By 2050, the geopolitics of energy will mean critical minerals and hydrogen rather than oil and gas. This is what we will trade. This is a big part of what we will need to manage across borders.
Having said that, the geography of hydrogen will not merely follow the geography of gas. It is too soon to speculate on trade routes for hydrogen by 2050, but this graph makes a key point: hydrogen trade routes will likely be limited. Think about hydrogen in its own terms.
Read 11 tweets
Oct 6, 2021
Gas is getting a lot of flak in today’s energy crisis—and for good reason. This is a genuine gas crisis. But the criticism can also miss a deeper truth: gas has a really tough assignment. The hardest, in fact. Let’s talk about *seasonal* balancing.
We often think of gas as balancing intermittent renewables, and sure it can do that. But its chief function in many modern economies is to manage seasonal variations in demand. And these can huge.
In the UK, for example, the winter/summer spread for gas demand is over 2x. For electricity the ratio is about 35 percent. This is fairly typical in countries where gas is used for space heating (in the U.S., the gas spread is about 75 percent, electricity about 35 percent).
Read 9 tweets

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