As with the implementation of new sanctions on Russia natural gas imports from the East will probably come to a hold, the EU’s widely praised energy transition is at stake.
Long term contracts with new providers will prevent EU member states from quitting with natural gas.
The objective to ban fossil fuels in the foreseeable future will evaporate as the EU is bound to purchase natural gas (LNG) for a long time period, possibly decades.
There is unrest in Brussels over the consequences of a new long term Liquid Natural Gas (LNG) independence created as agreements with new suppliers are looming. EU policy makers are very worried about it.
They fear for what they call “replacing one form of fossil fuel dependence with another”
Further there is rising doubt about the countries that replace Russia. “Simply diversifying the import of fossil fuels will only serve to maintain EU energy dependence on other countries, many of which do not respect EU values” is what they said.
The EU is currently also discussing an oil embargo on Russia and looking for alternative suppliers.
The United States is seen as the biggest new supplier of gas for the European Union.
The Wall Street Journal reported that the EU, which has until now been a staunch supporter of spot markets when it comes to gas, is considering making long-term commitments to the U.S. LNG industry. And there you have it. It is about contracts for decades leaving no or at least less room for energy transitions.
Commitments for an extended period of time are necessary to make new LNG export projects economically viable. On the other hand these agreements “saddle” buyers with a commitment to buy certain volumes for decades ahead. This is a hard confrontation with the EU policy targeting to move past fossil fuels.
The big buildout of wind and solar production is also part of the EU’s plan to wean itself off Russian oil and gas.
It is an illusion that, this buildout can happen overnight. Grid operators in many EU countries warn that it’s impossible to upgrade their networks in just a few years of time. As more and more drivers are pushed into electric cars and home owners forced to install heath pump systems, there is no sufficient infrastructure to serve.