Can Europe survive without Russian energy supplies, if they were to be disrupted now due to the standoff and sanctions?
No. It simply is not possible especially with Germany shutting
down perfectly good nuclear reactors this year. The big winner will
actually be France in the short term who can sell excess electricity
capacity to Germany for outrageous prices thanks to its massive nuclear
footprint.
What’s happening now is Germany going along with the political
flow, slowing the certification of Nordstream2 in the hope that
something can be done to keep the worst-case situation unfolding in
Ukraine.
To what extent can the US indeed provide energy security for Europe by supplying resources?
The total US LNG output according to the EIA for 2022 is 11.5 bcf
per day, which is 115 bcm per year, or roughly the capacities of
Nordstream 1 and 2 combined.
Is there 55 bcm of spare capacity (the size of NS2) in the US
system to feed a new market in Europe? No, not with demand rising at
more than 6% annually and accelerating as the world comes out of
COVID-19 lockdowns.
The demand for European LNG is so high that US and Russian
suppliers both have massive market opportunities there. So, this isn’t
about the money, in the end. With most of Europe ending its COVID-19
restrictions in a desperate attempt to stave off political unrest,
demand is only going to rise further.
Moreover, US LNG is far more expensive than Russian piped gas.
This is simply a fact. And with the Biden administration working with
Davos to lean on banks to retard investment into new oil and gas
projects, long-term supply of energy to Europe from the US is limited
anyway.
US exports will go to where the bid is the highest and with
Europe’s terrible future prospects, massive debt overhang and lack of
economic dynamism they will not be capable of outbidding other global
customers for gas. That’s been the reason for the insane prices in
Europe this winter, competition for limited gas supplies driving prices
up, despite rising global capacity.