Natural gas is the second-most important source of primary energy in Europe following crude oil. Many European countries heavily utilize natural gas to generate electricity and heat, as well as aiding industrial manufacturing processes. However, the continent’s resources are limited, and demand has been predominantly met through pipeline trading with neighboring countries such as Russia and Algeria. The implications of Europe’s reliance on natural gas became especially apparent in the 2021/22
The role of natural gas in Europe’s energy supply chain
Natural gas accounts for roughly 40 percent of gross heat generation in the European Union and more than 20 percent of
final energy consumption. Some of the countries with the highest
gas power generation share include Belarus and Malta, which derive electricity almost exclusively from natural gas. Meanwhile, in Italy and the Netherlands, it makes up nearly 50 percent of total electricity generation. Since 2000,
gas power capacity in Europe has doubled not only because of greater energy demand, but also as a result of the phasing-out of coal, which is the most carbon-intensive fossil fuel. Today, natural gas has become the main source of
EU power production after nuclear plants.
Natural gas supply amid the energy crisis
Russia plays a critical role in satisfying
Europe’s natural gas demand, especially for parts of the continent where pipeline networks have made trading more convenient. The Baltic Sea-crossing Nord Stream pipeline and Ukraine transit network are the main trading routes used. However, the Russia-Ukraine war has put Russian gas supplies into question, with erratic development in
weekly gas imports a reflection of political pressure. Following sabotage, the Nord Stream pipeline has since become unusable. The TurkStream pipeline across the Black Sea was the only supply route between Russia and continental Europe which had seen shipments stay comparatively steady since the start of the war. Countries in Eastern Europe are the most susceptible to a
Russian gas supply cut, with GDP output losses of up to 6.5 percent expected in a worst-case scenario. To keep repercussions to a minimum, the EU has introduced a set of policies such as the RePowerEU plan, which is aimed at speedily reducing Russian gas dependence through the promotion of LNG infrastructure in the mid-term and renewable buildup in the long-term.
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