There are two myths that often obscure discussions about the security of gas supply in Europe. The first is that Europe’s total dependence on Russian gas has been steadily increasing for decades; the second is that Europe suffers from an acute region-wide lack of infrastructural capacity to import enough LNG to meet its energy needs. While Europe does depend (in some cases heavily) on imports of Russian gas, and some regional markets need LNG capacity to diversify their gas supply options, the European gas market is a complex one that needs to be understood in proper context before reasonable analysis of the issues surrounding European energy security can be made.
With regards to the EU’s dependence on Russian gas, the reality is that this dependence varies greatly between member states. The share of the EU’s total gas consumption that is supplied by Russian gas has been relatively stable for a long time. Furthermore, Russia’s market share of the EU’s total gas imports has actually been in decline since the 1990s. That is not to say that Russia does not play a significant role in Europe’s gas supply. However, Russia’s market share varies considerably between different national markets, while the diversification of Europe’s sources of imported gas has in fact already been occurring.
The development of LNG regasification capacity is one of the reasons why Europe’s sources of imported gas have been diversifying. Since 2000, 14 regasification plants have been constructed in Europe, bringing the total to 21 (including three floating units). In southeast Europe, there is little infrastructure to import LNG (only in Greece), while the Baltic region is developing this capacity. However, in west and southwest Europe, there is under-utilised LNG import capacity with LNG being re-exported to other markets due to weak gas demand. Therefore, the problem of Europe’s access to LNG is that it is too heavily concentrated in some markets (namely Spain, France, the UK, Belgium, Italy and the Netherlands) and that bottlenecks in Europe’s gas pipeline network are preventing energy flows from reaching landlocked markets further east, where diversity of supply is lacking.
EU gas imports in context
As with oil and coal, the EU is heavily dependent on imported natural gas to meet its energy needs. The total import share of the EU’s gas demand has been steadily rising over the last decade, from 52% in 2003 to approximately 66% in 2013. This is largely due.....