The Economist: Adrift over energy

THE Independence cannot sail into the Baltic port of Klapeida a moment too soon. Built in South Korea, this floating gas terminal is a weapon of geopolitics as important as any warship. Designed to tap into global supplies of liquefied natural gas (LNG), it will allow Lithuania to break free of its total reliance on Russia. Given the fear that the Crimea crisis could turn into a sanctions war with Russia, the arrival of the Independence later this year should give Lithuania some solace.

Russia’s most obvious retaliation against Western sanctions would be to choke off energy supplies, particularly gas. It provides about a quarter of the gas burned in the European Union, and almost all of it in several countries, including the Baltic trio, Finland and Bulgaria. Eastern Europeans are urging Germany to wean itself off Russian gas, and America to increase exports of shale gas. Europe had a taste of gas wars in 2006 and again in 2009, when Russia shut the pipelines to Ukraine, leaving many downstream countries, mostly in south-eastern Europe, to shiver in the winter cold. Five years on, is Europe any less vulnerable?

 In the short term at least, the outlook is not too bad. After a mild winter, gas-storage reservoirs are still half-full and companies are filling them while the gas still flows. The EU’s gas network has become more integrated, with the installation of interconnectors and reverse-flow technology. This means that, if gas through Ukraine is interrupted, countries in central Europe can receive it from the west via Germany. Much of this would still come from Russia through alternative pipelines, such as Nord Stream, built under the Baltic directly to Germany.  MORE