Grandstand. Like in a movie about wartime duplicity, Russia continues to pay the Ukraine it massacres “rent” (apparently $2 billion in 2020, or around 18.40 billion euros) to use its gas pipelines to the European Union (EU). And EU countries, which economically sanction Russia and some of which supply arms to Ukraine, continue to pay their gas to Russian killers – 155 billion cubic meters (BCM) in 2021, which represents almost half of their gas imports.
The moral dilemma the EU thus faces can be resolved in several ways: Putin could cut off supplies; an oil driller from the Middle East or Texas could hire mercenaries to blow up Ukrainian pipelines…and the price of oil and gas along the way; the Ukrainian government could even, in a desperate move, blow up the pipelines itself.
Very expensive liquefied gas
But none of the plans announced so far seem to be able to solve this dilemma. On March 25, the European Commission and Washington announced that they could replace 20 MMC of Russian gas this year (out of 155) with new wind and solar projects. And that in eight years (!), the EU would have put an end to Russian gas imports by tripling its wind and solar capacity to 170 MMC. Will there be anything left of Ukraine on that date?
On March 24, Joe Biden promised to deliver around 15 MMC of liquefied natural gas (LNG) to the EU this year. The EU is also looking for other sources of LNG and contracts with existing floating regasification plants.
But replacing the relatively cheap gas delivered by pipeline with very expensive liquefied gas delivered by LNG tanker requires the construction of new regasification plants. But the construction of that of Dunkirk took six years and cost one billion euros. In other words, building more would not help solve the current short-term crisis.
The EU plan for energy independence announced on March 8, on the other hand, does not speak of a new nuclear power plant to tackle this crisis. And for good reason: if the first EPR reactor in Europe, in Finland, has just produced its first 100 MW of electricity in March 2022, the project was launched thirteen years ago, in 2005, and cost around 11 billion euros instead of the 3.4 billion initially planned…
From $26 to $50 per MWh
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