EXPLAINER: Europe struggles with crisis as Russia cuts gas

Europe is struggling to contain an energy crisis that could lead to rolling blackouts, shuttered factories and a deep recession.
The primary cause: Russia has choked off the supplies of cheap natural gas that the continent depended on for years to run factories, generate electricity and heat homes.
That has pushed European governments into a desperate scramble for new supplies and for ways to blunt the impact as economic growth slows and household utility bills rise.
The crisis deepened when Russia’s state-owned exporter Gazprom said the main pipeline carrying gas to Germany would stay closed, blaming an oil leak and claiming the problems could not be fixed because of sanctions barring many dealings with Russia.
European officials say it’s energy blackmail, aimed at pressuring and dividing the European Union as it supports Ukraine against Russia’s invasion.
Here is the latest on Europe’s efforts to avoid an energy disaster:
DID RUSSIA CUT OFF GAS TO EUROPE?
Just about. The halt in the Nord Stream 1 pipeline means Russian gas shipments have fallen 89 per cent from a year ago.
Russia used to supply 40 per cent of Europe’s natural gas, and even more to Germany, where inexpensive energy was a pillar of the economy.
There’s still some Russian gas flowing to Europe through a pipeline passing through Ukraine into Slovakia, and another crossing the Black Sea to Turkey and then to EU member Bulgaria.
Russia started cutting back gas as early as last summer, before the war in Ukraine started. That sent gas prices sharply higher.
Then Gazprom cut off a number of European countries after they responded to the outbreak of the war banning many dealings with Russian banks, businesses and persons.
The reductions have led to soaring natural gas prices, which have hit records in the past few weeks. Given Russia’s slow constriction of supplies since last summer, experts say Europe needs to be ready for zero Russian gas this winter.
Wagons wait beside oil tanks in Wesseling, near Cologne, Germany, on April 6, 2022. Europe is staring an energy crisis in the face. The cause: Russia throttling back supplies of natural gas. (AP Photo/Martin Meissner, File)
WHY IS RUSSIAN GAS SO IMPORTANT?
High energy prices are already threatening to cause a recession this winter through record inflation, with consumers having less to spend as costs rise for food, fuel and utilities.
A complete cutoff could deal an even heavier blow to an already troubled economy.
Besides heating homes and generating electricity, gas is used to fire a range of industrial processes that most people never think much about — forging steel to go into cars, making glass bottles and pasteurizing milk and cheese.
IS THE PROBLEM JUST ABOUT HIGH NATURAL GAS PRICES?
No. Electricity prices also have skyrocketed because gas is a key fuel to generate power. To make matters worse, other sources of power have lagged for reasons not connected to Russia.
Drought has undermined hydroelectric power from rivers and reservoirs. France’s fleet of 56 nuclear power plants is running at half-strength because of shutdowns over corrosion problems in key pipes and repairs, updating and safety checks.
A heat wave limited use of river water for cooling power plants, and lower water levels on Germany’s Rhine River reduced supplies of coal to generators.
In a role reversal, France is talking about sending natural gas to Germany, while Germany is exporting electricity to France. Usually it’s the other way around.
Analysts at Rystad Energy say Europe could face a serious electricity shortage as soon as this month.
This winter, a worst case of cold weather, low wind generation and a 15 per cent cut in gas use “would prove very challenging for the European power system, and could lead to power rationing and blackouts.”
A pro-nuclear activ demonstrates outside the European Parliament, on July 6, 2022 in Strasbourg, eastern France. Europe is staring an energy crisis in the face. The cause: Russia throttling back supplies of natural gas. (AP Photo/Jean-Francois Badias, File)
WHAT IS EUROPE DOING TO EASE THE CRISIS?
Europe has lined up all the alternative gas supplies it could: shipments of liquefied natural gas, or LNG, that come ship from the United States and more pipeline gas from Norway and Azerbaijan. LNG is much more expensive than pipeline gas, however.
Germany is keeping coal plants in operation that it was going to shutter to reduce greenhouse gas emissions. It also is keeping the option of reactivating two nuclear plants it’s set to shut down.
The 27-nation EU has approved a plan to reduce gas use 15% next March, roughly the amount experts say will need to make up for the loss of Russian gas. Yet those conservation measures are voluntary in member countries for now.
National governments have approved a raft of measures: bailouts for utilities forced to pay exorbitant prices for Russian gas, cash for hard-hit households and tax breaks.
WHAT’S RUSSIA’S GAME?
Even as gas sales dwindled, skyrocketing prices helped maintain Russia’s income from those sales. Oil and gas imports were initially exempt from sanctions because Europe was dependent on Russian energy. Europe has banned Russian coal and will ban most Russian oil at the end of the year.
Russia’s revenue from fossil fuel exports reached 158 billion euros from February to August, according to the Helsinki-based Centre for Research on Energy and Clean Air.
But oil has tended to be the Kremlin’s main moneymaker, and unlike gas in fixed pipelines to Europe, can be sold worldwide tanker.
And the gas relationship with Europe may be gone for good — and with it, any influence it might have brought.