EU Nations Urged to Cut Gas Usage Amid New Putin Warning

The European Union (EU) told member states on Wednesday to cut gas usage by 15 percent until March as an emergency step after President Vladimir Putin warned that Russian supplies sent via the biggest pipeline to Europe could be reduced further and might even stop altogether.

Nord Stream 1, accounting for more than a third of Russian gas exports to the EU, will resume deliveries on Thursday after a ten-day annual maintenance halt.

On July 10th, the last full day before maintenance on the pipeline started flows stood at around 698 GWh.

Even before the maintenance outage in a dispute over sanctions, supplies via the route had been reduced and may now be cut further. Flows via other routes, such as Ukraine, have also fallen since Russia’s invasion in February.

These disruptions have hampered Europe’s efforts to refill gas storage before winter, raising the risk of restrictions and another hit to fragile economic growth if Moscow further limits flows in retaliation to Western sanctions over the war in Ukraine.

EU Commission President Ursula von der Leyen said that “Russia is blackmailing us. Russia is using energy as a weapon. And therefore, in any event, whether it’s a partial, major cut-off of Russian gas or a total cut-off of Russian gas, Europe needs to be ready.”

The Commission proposal would enable Brussels to make the target mandatory in a supply emergency if the EU declared a substantial risk of severe gas shortages, a move that needs the backing of EU states.

An EU official said. “We believe that a full disruption is likely…if we wait, it will be more expensive and it will mean us dancing to Russia’s tune.”

The European Commission proposed a voluntary target for all EU states to cut gas use by 15 percent from August to March, compared with their average consumption in the same period in 2016 to 2021.

Gas shortage is a result of reduced deliveries by Russia

Russia is using technical issues as an excuse to cut deliveries, European politicians say. The Kremlin says Russia is a reliable energy supplier and blames sanctions for reduced flows.

The Kremlin-controlled Gazprom (GAZP.MM) cut gas exports via the route to 40 percent capacity in June, blaming delays to the return of a turbine that Siemens Energy (ENR1n.DE) was servicing in Canada.

Russian President Putin said there might be a further reduction in supplies or a complete halt to flows via the pipeline that runs under the Baltic Sea to Germany, which relies heavily on Russian fuel.

Meanwhile, European nations, have been chasing alternative supplies although the global gas market was stretched even prior to the Ukraine crisis, as demand for fuel recovered from the pandemic-induced downturn.

Those efforts have included seeking more gas from suppliers linked to Europe by pipeline, such as Algeria, and by building or expanding more liquefied natural gas (LNG) terminals to receive shipments from much further afield, such as the United States.