ASP Policy Analyst Nick Cunningham wrote an article for E!Sharp, an online publication based in Europe. The article discusses Russia’s waning power over European energy, which is due to a several factors: U.S. shale gas revolution, the potential for shale gas in Europe, and efficiency and Europe’s efforts at expanding renewable energy and energy efficiency. From the article:

Efforts to further integrate the European electricity grid would also go a long way to undercut Russian control. Building new pipeline infrastructure and interconnected transmission lines would allow energy to be moved around to those who need it, building resilience to supply disruptions.

While the above strategies may contribute to the EU’s goal of reducing Russian influence over energy, an array of policies to improve energy efficiency and boost renewable energy will also help. Germany has been successful at adding significant quantities of solar and wind capacity, which is capturing a larger share of the electricity market. Italy too has added substantial solar capacity.

Overall, Russia’s leverage over the EU through its energy supplies seems to have already peaked. Flattening demand in Europe, in part due to efficiency and renewable energy, but more so because of the ongoing economic crisis, has reduced Russia’s ability to dictate terms. Moreover, the shale gas revolution in the United States has weakened Russia’s hand by flooding LNG markets. As a result, Gazprom, the government-owned Russian gas giant, saw its profits decline 24% ($11 billion) in the first quarter of this year. Lower gas prices and weak demand led the company to suspend plans to develop the enormous Shtokman gas field. With Gazprom backpedaling, the EU seems emboldened. Earlier last month the EU filed an antitrust lawsuit against Gazprom for unfair pricing practices.

To read the full article, click here.

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