The cost of oil and gas has jumped sharply as talks in the European Union and the United States over boycotting energy from Russia gain momentum. The EU plans to reduce its dependence on Russian gas by two thirds before the end of 2022 as part of a plan to become independent from all Russian fossil fuels “well before 2030”, the European Commission announced on Tuesday (8 March). Since Russia invaded Ukraine two weeks ago, the bloc has faced growing pressure to break away from Russian energy imports, which critics say is helping to fund the Kremlin’s war. “We must become independent from Russian oil, coal and gas. We simply cannot rely on a supplier who explicitly threatens us. We need to act now to mitigate the impact of rising energy prices, diversify our gas supply for next winter and accelerate the clean energy transition,” said Ursula von der Leyen, the chief of EU’s executive arm. The plan “will seek to diversify gas supplies, speed up the roll-out of renewable gas and replace gas in heating and power generation,” according to the Commission. “By the end of this year, we can replace 100 bcm of gas imports from Russia. That is two thirds of what we import from them. This will end our over dependency and give us much needed room to manoeuvre,” EU climate chief Frans Timmermans said.
It came as the US President Joe Biden on the same day imposed an immediate ban on Russian oil and other energy imports in retaliation for the invasion of Ukraine, amid strong support from American voters and lawmakers, even though the move will drive up US energy prices.“That means Russian oil will no longer be acceptable in US ports and the American people will deal another powerful blow to Putin’s war machine,” Biden told reporters at the White House. The ban caps sweeping US and European sanctions imposed on Moscow for launching the largest war in Europe since World War Two. Biden consulted closely with European allies on the ban, but did not ask them to join in, knowing they are far more dependent on Russian oil, to isolate Russia’s energy-heavy economy and Putin. While three-fifths of Russia’s oil exports go to the EU, only 8% goes to the US, or 7% of the oil imported by the US. The United Kingdom announced shortly before Biden’s remarks that it would phase out the import of Russian oil and oil products by the end of 2022.
Meanwhile, Spanish Prime Minister Pedro Sánchez has called on the EU to finance gas interconnections with the rest of Europe, saying new infrastructure should also include green gas such as hydrogen. The Spanish government insists that it will be one of the least affected by the gas crisis thanks to its extensive network of LNG terminals, and has expressed willingness to facilitate interconnections with other countries in order to allow deliveries out of Spain. However Sánchez insisted that the costs of constructing the necessary infrastructure should be covered from the EU budget. The Spanish PM also supports the idea that the new infrastructure should be designed for “green gas and hydrogen and financed by European budgets”. Spanish citizens are already paying for re-gasification facilities. The price for the re-gasification is paid by us, the consumers. If we wish to offer Europe our reserve capacities, which are above 60% while the EU’s is at 30%, it is not Spain but Europe that has to fund it,” he explained. Sánchez also voiced his conviction that Brussels would not raise any objections on its part.
