The European Commission on Tuesday outlined ambitious proposals to “make Europe independent from Russian fossil fuels well before 2030.”
Europe has been hit with exorbitant natural gas prices in recent months because of tight supplies, exacerbated by restrictions by Russia, and worries that Moscow would cut flows in response to Europe’s support for Ukraine.
“We must become independent from Russian oil, coal and gas,” the commission’s president, Ursula von der Leyen, said in a news release. “We simply cannot rely on a supplier who explicitly threatens us.”
The proposals will probably be a huge boon for a variety of energy businesses, from the suppliers of liquefied natural gas in Qatar and around the Gulf of Mexico to builders of solar energy parks and offshore wind farms. The question is whether they can be executed rapidly enough to prevent further harm to household finances and the broader economy.
“If we react to the current crisis with a warlike reaction,” said Marco Alvera, chief executive of Snam, the Italian natural gas company, “we can do a lot in six months.”
Other countries are moving swiftly to cut ties with Russia after its invasion of Ukraine. On Tuesday, President Biden announced a ban on U.S. imports of Russian oil and natural gas. “This means Russian oil will no longer be acceptable to U.S. ports and the American people will deal another powerful blow to this war machine,” he said.
The Russian invasion of Ukraine is turning into a watershed moment for Europe on energy matters. Europe has long relied on Russia for a large portion of its oil and gas, trusting in what many European leaders thought was a mutually beneficial business relationship.
In recent months, though, Russia has appeared to exacerbate an already tight natural gas market by declining to provide Europe with any gas above contracted amount. Following Russia’s invasion of Ukraine last month, European gas prices have risen to astronomical levels, comparable to more than $500 a barrel for oil. High gas prices have also sent electricity prices much higher, putting pressure on both consumers and businesses.
Clearly, recent weeks have shaken Ms. von der Leyen and her colleagues into action. The proposals announced on Tuesday are a mixture of short-term measures intended to avoid repeating the debacle of recent months in energy markets next year as well as medium-term proposals to accelerate the installation of equipment to generate enormous amounts of clean energy like wind and solar power.
Perhaps the most crucial of the proposals aims to fill natural gas storage facilities to 90 percent of their capacity. The idea is to create a buffer against cold temperatures that eat up gas supplies, and to ensure against blackmail by suppliers like Russia.
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