NATO Chief Calls For Europe to Diversify Its Energy Supplies

On Sunday, NATO Secretary General Jens Stoltenberg suggested that Europe diversify its energy supply.

Stoltenberg said: "We are concerned about the energy situation in Europe because it demonstrates the vulnerability of being too dependent on one supplier of natural gas and that's the reason why NATO allies agree that we need to work and focus on diversification of supplies".

Russia, which supplies close to a third of Europe's natural gas, was not directly referenced, but the recent escalation in tensions between Russia and NATO over Ukraine is thought by some to be a catalyst for his comments.

A report out of the United Kingdom suggested that a Russian "invasion" of Ukraine was imminent. Moscow has consistently dismissed the accusations as incorrect and politically motivated.

NATO allies have discussed wide-ranging sanctions and military action should Russia invade Ukraine. However, the European Union, of which many nations are NATO members, is heavily dependent on Russian energy exports.

In 2019, 60.7% of the EU's energy came from imports. Russia was the largest supplier of coal, crude oil, and natural gas, and, over the past decade, the EU has become increasingly reliant on Russian natural gas.

The growing demand for Russian natural gas led to the development of the Nord Stream 2 pipeline. The pipeline runs under the Baltic Sea connecting Russia and Germany and has long been a politically divisive topic within NATO.

One primary stated concern was the ability for Russia to use energy as a bargaining chip. The pipeline was completed in September of 2021.

Europe is also in the midst of an energy crisis. The continent had to dip into energy reserves during an exceptionally hot summer and has seen lower than anticipated energy production from wind turbines.

In the fourth quarter of 2021, natural gas prices at the Dutch TTF contract, the European benchmark, were at a record high of $31.14/MMBtu. Prices have dropped in the first quarter of 2022, but supply remains low compared to recent averages.