The US is Not Prepared to Ensure the EU’s Independence from Russian Energy Resources

In the context of the latest developments in Ukraine, the EU countries intend more and more to reduce their dependence on energy supplies from Russia which in 2013 accounted for over 40% of the European pipeline gas import.

In such a situation, new suppliers will be required and as regards that issue the EU relies primarily on the US. However, at present the US does not have enough resources to meet energy needs not only of European countries, but also their own ones. In 2013, the US produced 687.6bn m3 of gas which volume does not meet the US needs in that type of energy resources (gas consumption amounted to 737.2bn m3). The insufficient volume of gas – 78.9bn m3 – was imported by the US from Canada.

FIG.
Source: BP Statistical Review of World Energy 2014.

Fig.1. Production, consumption and import of gas to the US and the EU countries

In 2013, Europe imported 448.5bn m3 of gas, including 397.1bn m3 of gas via pipelines and 51.4bn m3 of gas by LNG tankers. So, pipeline gas supplied from the Russian Federation (41%), Norway (26%) and the Netherlands (13%) meets 91% of European countries' needs in gas.

As regards oil, the situation is a similar one. The US needs to produce 8.9m barrels more per day than at present. The above difference is mainly compensated by supplies from Canada and the Middle East.
FIG.
Source: BP Statistical Review of World Energy 2014.

Fig. 2. Production, consumption and trade in crude oil in the US and the EU countries, thousand barrels a day

The European countries import nearly 99% of oil needed for consumption. The main oil suppliers are countries of the former USSR and the Middle East; they account for 47% and 16% of the European import, respectively. The US accounts for the mere 5% of the import of crude oil (21% of all the exported oil from the US).

So, to ensure the EU with energy resources the US will have to increase at a high rate its domestic production. On the basis of the results of 2013, thanks to utilization of the hydraulic fracturing method the US was rated the first and the third (after Saudi Arabia and Russia) as regards production of gas and oil, respectively. However, due to numerous protests by environmentalists and ordinary people who live close to active deposits, as well as moratoriums on drilling of shale gas deposits introduced by a number of US states, including the state of New York which accounts for nearly one fifth of the Marcellus Shale Deposit – the largest shale gas deposit in the US – the future of shale energy resources is rather uncertain.

Even if production of gas in the US will grow at a high rate it will not be enough to meet the country's annual needs at the level of over 700bn m3 of gas because minimum 400bn m3 of gas is required to ensure the European energy security even with taking into account the fact the EU intends to reduce energy consumption by 20% by 2020.

Dina Larionova, Expert of the Structural Research Center