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    'Everybody in EU Understands That Russian Gas Cannot be Substituted' – Scholar

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    During their August 18 summit, Russian President Vladimir Putin and German Chancellor Angela Merkel noted that the Nord Stream 2 pipeline project is profitable for both sides and should not be politicized. Speaking to Radio Sputnik, Gerhard Mangott, a political analyst from Austria's Innsbrook University, shared his views on the EU's energy issue.

    Sputnik: Washington is reportedly working on sanctions over the Nord Stream 2 project that was discussed by Merkel and Putin. How attainable does the threat to impose sanctions make the implementation of the project? Does Berlin have enough leverage and strength to keep the issue from being politicized?

    Gerhard Mangott: The US Congress adopted this law which allows for the sanctioning of European companies that cooperate with Gazprom, the so-called CAATSA [Countering America's Adversaries Through Sanctions Act] Act, last August. Despite this, the US administration has so far refrained from implementing sanctions on European energy companies. So it is a constant threat, but it has not yet materialized.

    READ MORE: 'Energy Cooperation with Russia is a Tradition in Germany' Since 70's' — Prof

    Sputnik: Trump earlier slammed Germany for engaging in Nord Stream 2 and he talked about how US-produced liquefied gas (LNG) would be super-popular in Europe and Europe will be buying vast amounts of LNG from the US. How realistic is Trump's vision?

    Gerhard Mangott: There are not enough LNG terminals for exporting US LNG and the Europeans do not have the LNG infrastructure to import US LNG but they still have to wait until the US is ready. Besides, according to the current situation, US LNG will be more expensive than Russian pipeline gas and of course, it's simply a question of mathematics where you buy your gas. Do you buy it for a cheaper price or do you buy it for a higher price because you think you're safer when it comes to your energy security. So, I don't think that US LNG in Europe does have a bright future. There will be US LNG deliveries to Europe, say, to the Baltics, to Poland and maybe some other states, but the US LNG industry is in no position to substitute for Russian gas supplies.

    READ MORE: Nord Stream 2 Rival: TAP is Trump's Tool in 'Economic War' With Russia — Journo

    Sputnik: How then would you rate the security of Russian supplies to Europe?

    Gerhard Mangott: I think both sides need each other. The European Union needs more gas. Gas demand is rising, partly due to the economic recovery, partly due to the fact that gas is now used for coal-powered plants, because gas is cleaner from an ecological standpoint than coal. So gas demand is rising, whereas gas production within the European Union is in deep decline. So they will need to import more gas. And, of course, they will try to diversify their partners where they buy gas from. And they will diversify the gas pipeline routes. But there is a limit to that and everybody in the European Union understands that Russia cannot be substituted for what it delivers to the European market at affordable prices. And on the other hand, Russia is deeply dependent on the European market because it is the most lucrative market and this is where it sells its highest volumes. And, finally, this is where all the pipeline infrastructure so far leads to. So, both sides need each other; both sides will try to diversify — Russia does so as well, looking to China, Korea or Japan — but basically, the gas relationship between the two sides will remain as it has been for the past 40 years.         

     

    The views and opinions expressed by the speaker do not necessarily reflect those of Sputnik.

    The views and opinions expressed in the article do not necessarily reflect those of Sputnik.

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    Tags:
    natural gas, Nord Stream 2, liquefied natural gas (LNG), European Union, Angela Merkel, Vladimir Putin, Donald Trump, Germany, Europe, United States, Russia
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