Thread by @EmilyJHolland

Quick thread on #Europe #EnergySecurity given the context of today's events. 1. It is HIGHLY UNLIKELY that there will be a major interruption of Russian gas supplies to Europe because Russia and Europe are energy *interdependent* 1/x

That means Russia is also reliant on Europe as a consumer of its natural gas. It is not technically possible for Russia to turn around & sell gas bound for Europe to Asian consumers because infrastructure binds certain Russian gas fields with European export routes. 2/x

So over the long term Russia may be able to sell more volumes of gas to China, but they can't do it right away, & the Chinese will pay less than European consumers. 3/x

On the European side, it is simply not possible over the medium term for Europe to replace Russian gas if there was a complete interruption of Russian gas supplies. There are supply, infrastructure, and market constraints. 4/x

Yes, #LNG can help. But there is not enough LNG to supply all of Europe considering that there are other buyers in the world, including premium Asian markets. LNG is also primarily sold through LTCs: so not all LNG is available to go to the highest bidder. 5/x

Some estimates show that in a worst case scenario, Europe would have to cut at least 10% demand. See:

https://twitter.com/Cristi_t_85/status/1496194480894062600

6/x

Reminder: Natural gas is not like oil. There is no OPEC for gas, & its physical properties require much more constraining & expensive infrastructure investments. 7/x

For what its worth, #Gazprom has spent the last 15 years arguing that it is a reliable supplier of gas to Europe, and to be fair, for the most part they have been. Today they reiterated that gas will continue to flow via Ukraine reuters.com/business/energ…

To sum up, it is in neither Europe or Russia's interest to stop gas flows to Europe. In fact, Europeans are buying MORE Russian gas today and tomorrow due to market reasons & the way Russia prices their gas 9/x

https://twitter.com/JavierBlas/status/1496887607422291968

But perhaps we can no longer assume rationality on the part of Russian leadership. Russia's blatant aggression has forced Europe to unite & confront its energy insecurity. Previously, European states had fairly divergent energy positions vis-a-vis Russia. 10/10