1 00:00:02,480 --> 00:00:08,639 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Let's bring you more 2 00:00:08,720 --> 00:00:11,319 Speaker 1: now though, on that EU deal to phase out Russian gas. 3 00:00:11,320 --> 00:00:13,440 Speaker 1: The agreement reached in the early hours of this morning. 4 00:00:13,480 --> 00:00:16,360 Speaker 1: We'll see you're a bend purchases of LNG and pipeline 5 00:00:16,360 --> 00:00:19,800 Speaker 1: gas by September twenty twenty seven. Joining us in our 6 00:00:19,800 --> 00:00:22,400 Speaker 1: Brussels studio to discuss the head of the International Energy Agency, 7 00:00:22,480 --> 00:00:25,279 Speaker 1: Patti Berrel, Good morning, Great to see you in the studio. 8 00:00:25,440 --> 00:00:27,560 Speaker 1: This has been a long road for the European Union. 9 00:00:27,600 --> 00:00:30,400 Speaker 1: The war is three and a half years longer. Now, 10 00:00:30,720 --> 00:00:33,200 Speaker 1: how significant is this moment? Is this deal? 11 00:00:33,840 --> 00:00:38,440 Speaker 2: I think? I think it is a historical deal for 12 00:00:38,720 --> 00:00:44,800 Speaker 2: Europe because Russia has been the number one energy supplier 13 00:00:44,880 --> 00:00:50,040 Speaker 2: of Europe over half a century since nineteen seventies, and 14 00:00:50,479 --> 00:00:56,920 Speaker 2: natural gas was the most important fuel here. Until recently, 15 00:00:56,960 --> 00:01:00,920 Speaker 2: about half of the natural gas consumption in Europe came 16 00:01:01,160 --> 00:01:06,360 Speaker 2: from Russia. So after the Russia's invasion of Ukraine and 17 00:01:06,520 --> 00:01:10,399 Speaker 2: Russia using nature gas as a weapon, Europe took this 18 00:01:10,560 --> 00:01:15,000 Speaker 2: decision European countries. It is historical and online and of 19 00:01:15,080 --> 00:01:17,800 Speaker 2: course I congrege you to European countries. But on the 20 00:01:17,800 --> 00:01:22,400 Speaker 2: other hand, the market context we are in is also 21 00:01:22,520 --> 00:01:28,319 Speaker 2: helping Europe creating a room of maneuver, such as huge 22 00:01:28,480 --> 00:01:32,280 Speaker 2: amount of LNG looking for nature gas coming to markets 23 00:01:32,480 --> 00:01:36,000 Speaker 2: starting from twenty twenty six through two thirty, so there'll 24 00:01:36,040 --> 00:01:39,840 Speaker 2: be a lot of alternatives to Russian gas for European countries. 25 00:01:40,000 --> 00:01:42,720 Speaker 1: Is there a risk that the European countries simply replicates 26 00:01:42,720 --> 00:01:45,160 Speaker 1: the situation they had of an over alliance on a 27 00:01:45,200 --> 00:01:48,160 Speaker 1: single supplier by turning to other countries. You know, we 28 00:01:48,240 --> 00:01:51,840 Speaker 1: know that the United States has also talked about wanting 29 00:01:51,880 --> 00:01:53,840 Speaker 1: Europe to buy a lot more LANG from them. 30 00:01:54,280 --> 00:01:57,120 Speaker 2: In fact, when we look at the history, the story 31 00:01:57,400 --> 00:02:03,000 Speaker 2: with the Russian gas dependencies started in nineteen seventies when 32 00:02:03,120 --> 00:02:07,200 Speaker 2: Europe wanted to diversify from Middle East oil went to 33 00:02:07,280 --> 00:02:12,320 Speaker 2: another supplier to Russia. And I very much hope that 34 00:02:12,680 --> 00:02:17,280 Speaker 2: Europe now learned this lesson that doesn't repeat the same 35 00:02:17,400 --> 00:02:23,000 Speaker 2: mistake and create diversification for its energy imports. For me, 36 00:02:23,600 --> 00:02:28,320 Speaker 2: the number one golden rule of energy securities diversify as 37 00:02:28,400 --> 00:02:31,200 Speaker 2: much as possible. There are a lot of countries providing 38 00:02:31,680 --> 00:02:35,840 Speaker 2: gas to the markets. Markets will turn from years and 39 00:02:35,919 --> 00:02:40,320 Speaker 2: years being a market of sellers to the markets of buyers, 40 00:02:40,440 --> 00:02:43,799 Speaker 2: so it's abect the Europeans and stronger, and of course 41 00:02:44,120 --> 00:02:47,680 Speaker 2: US is a very important ally. Europe will continue to 42 00:02:48,120 --> 00:02:51,799 Speaker 2: import US LNG, but there will be also other opportunities 43 00:02:51,960 --> 00:02:53,240 Speaker 2: for europe queity. 44 00:02:53,320 --> 00:02:56,160 Speaker 1: Russian supplies go now then with this deal to phase 45 00:02:56,200 --> 00:02:58,800 Speaker 1: out the European purchasers. 46 00:02:58,200 --> 00:03:02,560 Speaker 2: This is a key question for Russians and they first 47 00:03:02,560 --> 00:03:04,560 Speaker 2: of all, they will lose a lot of money, loss 48 00:03:04,639 --> 00:03:09,760 Speaker 2: of revenues. And it is not easy for gas, unlike oil, 49 00:03:10,240 --> 00:03:14,240 Speaker 2: to go from one destination to another, because the big 50 00:03:14,360 --> 00:03:17,920 Speaker 2: chunk of the Russian gas came to Europe through pipeline 51 00:03:18,000 --> 00:03:22,800 Speaker 2: which will built years and years. And now Russia is 52 00:03:22,880 --> 00:03:27,160 Speaker 2: trying to increase exports to China, which is in fact 53 00:03:27,680 --> 00:03:30,680 Speaker 2: difficult undertaking for several reasons. 54 00:03:31,160 --> 00:03:34,040 Speaker 1: The U Energy Commissioner also saying this morning that a 55 00:03:34,120 --> 00:03:36,640 Speaker 1: proposal to ban imports of all Russian oil is going 56 00:03:36,680 --> 00:03:39,720 Speaker 1: to be table at the beginning of next year as well. 57 00:03:39,720 --> 00:03:41,080 Speaker 1: They're meant to have that on by the end of 58 00:03:41,080 --> 00:03:44,400 Speaker 1: twenty twenty seven too. How important would that be in 59 00:03:44,600 --> 00:03:46,800 Speaker 1: this move away from Russian supplies. 60 00:03:47,320 --> 00:03:50,480 Speaker 2: I think when we see the Russian energy imports back 61 00:03:50,520 --> 00:03:54,520 Speaker 2: of it, as we discussed as natural gas, there is oil, 62 00:03:54,560 --> 00:03:58,640 Speaker 2: and there is also uranium supply, nuclear supplass coming from Russia. 63 00:03:58,800 --> 00:04:02,720 Speaker 2: I think to bend oil from Russia is also very 64 00:04:02,760 --> 00:04:06,000 Speaker 2: timely from a political perspective. But in addition to that, 65 00:04:06,440 --> 00:04:08,520 Speaker 2: there is a huge amount of oil in the market. 66 00:04:08,560 --> 00:04:12,040 Speaker 2: There's a surplus of oil oil production, so it wouldn't 67 00:04:12,080 --> 00:04:15,400 Speaker 2: have a major impact nd the oil prices if it 68 00:04:15,480 --> 00:04:18,080 Speaker 2: is done in a gradual and in a careful way, 69 00:04:18,400 --> 00:04:21,839 Speaker 2: so it wouldn't lead the price spikes as many of 70 00:04:21,920 --> 00:04:24,960 Speaker 2: us might be scared of. So I think it will 71 00:04:25,000 --> 00:04:28,080 Speaker 2: be timely. If Europe goes that way, it will in 72 00:04:28,160 --> 00:04:33,640 Speaker 2: turn have Europe to radius Russian energy export revenues. 73 00:04:34,480 --> 00:04:36,240 Speaker 1: I'm wondering as well, because of course all of this 74 00:04:36,400 --> 00:04:39,599 Speaker 1: is happening because of the ongoing war in Ukraine. How 75 00:04:39,600 --> 00:04:42,280 Speaker 1: are you viewing the risks for Ukraine's energy system in 76 00:04:42,600 --> 00:04:45,240 Speaker 1: this winter as Russia has been continuing attacks on their 77 00:04:45,320 --> 00:04:48,480 Speaker 1: energy infrastructure, as Ukraine has on Russian energy infrastructure. 78 00:04:49,279 --> 00:04:53,440 Speaker 2: We have been following the Ukraine energistration, especially when it 79 00:04:53,440 --> 00:04:56,040 Speaker 2: comes to winter, and I would say that this is 80 00:04:56,480 --> 00:05:01,120 Speaker 2: perhaps the most difficult winter of European battle Ukraine energy 81 00:05:01,160 --> 00:05:07,040 Speaker 2: sector because it is all the very very vulnerable and 82 00:05:07,560 --> 00:05:13,200 Speaker 2: we have seen the especially the electricity infrastructure and heating 83 00:05:13,240 --> 00:05:17,120 Speaker 2: infrastructures under huge strain, and this would be the most 84 00:05:17,240 --> 00:05:21,800 Speaker 2: challenging winter Ukraine has faced since the start of the wall. 85 00:05:22,000 --> 00:05:25,720 Speaker 1: Do you see the situation getting much worse as the ructures. 86 00:05:25,560 --> 00:05:28,360 Speaker 2: Exactly, it can't get much worse than we have seen 87 00:05:28,400 --> 00:05:32,480 Speaker 2: in the last three years. But of course Ukraine allies 88 00:05:32,560 --> 00:05:37,240 Speaker 2: are ready hopefully to support Ukraine, especially in terms of 89 00:05:37,279 --> 00:05:39,080 Speaker 2: the electricity infrastructure. 90 00:05:39,440 --> 00:05:41,600 Speaker 1: From the EU point of view, this was framed by 91 00:05:41,600 --> 00:05:44,039 Speaker 1: the EU commissioned President ar Slavander line as part of 92 00:05:44,080 --> 00:05:47,720 Speaker 1: the ramp up of renewable energy. Surprise in Europe too. 93 00:05:47,920 --> 00:05:50,640 Speaker 1: I'm wondering, given the market dynamics that you've described, there's 94 00:05:50,680 --> 00:05:53,880 Speaker 1: low prices for gas as well, is this going to 95 00:05:54,240 --> 00:05:56,640 Speaker 1: take I suppose some of the inputus out of the 96 00:05:56,680 --> 00:06:01,360 Speaker 1: EU to further that shift into renewables. 97 00:05:59,640 --> 00:06:03,200 Speaker 2: It somewhat, but I think the denewments are growing so 98 00:06:03,360 --> 00:06:07,200 Speaker 2: strongly in Europe. Just in the last three years after 99 00:06:07,240 --> 00:06:12,359 Speaker 2: the after the we have seen the major energy crisis 100 00:06:12,360 --> 00:06:16,400 Speaker 2: in Europe, renewables increase forty person. We have never seen 101 00:06:16,600 --> 00:06:21,320 Speaker 2: any country, including Europe the European region, such a big increase, 102 00:06:21,800 --> 00:06:25,880 Speaker 2: plus many European countries change their position. As I has 103 00:06:25,920 --> 00:06:30,440 Speaker 2: suggested on nuclear power, there's a comeback of nuclear and 104 00:06:30,920 --> 00:06:34,960 Speaker 2: with the cheaper nature gas, Europe will find a better mix, 105 00:06:35,120 --> 00:06:38,760 Speaker 2: much more balanced mixed now good for the energy security 106 00:06:39,120 --> 00:06:42,560 Speaker 2: and with the lower nature gas process good for the 107 00:06:42,600 --> 00:06:43,760 Speaker 2: competitieness of Europe. 108 00:06:43,839 --> 00:06:46,360 Speaker 1: But of course there's questions too about the grade adapting 109 00:06:46,400 --> 00:06:48,200 Speaker 1: to this too. Of course, we have the blackout in Spain, 110 00:06:48,240 --> 00:06:51,200 Speaker 1: a very dramatic moment for European energy supplies. How much 111 00:06:51,240 --> 00:06:53,839 Speaker 1: of a risk are issues like that as the energy 112 00:06:53,880 --> 00:06:55,320 Speaker 1: mix continues to change. 113 00:06:55,640 --> 00:07:00,719 Speaker 2: I think the electricy security discs are there, and the 114 00:07:00,760 --> 00:07:05,760 Speaker 2: nerve center of all the electricity discussions here is the greats. 115 00:07:06,200 --> 00:07:12,080 Speaker 2: We don't have enough smart and modern greeds. The issue 116 00:07:12,120 --> 00:07:16,480 Speaker 2: has been too much concentrated and building power plants and 117 00:07:16,520 --> 00:07:19,160 Speaker 2: we are okay with that, but we don't have enough 118 00:07:19,200 --> 00:07:22,600 Speaker 2: greeds to bring these electricity in the power plans to 119 00:07:22,680 --> 00:07:25,760 Speaker 2: the household, to the factories. It is the next big 120 00:07:25,840 --> 00:07:27,560 Speaker 2: job for European Commission. 121 00:07:27,560 --> 00:07:29,480 Speaker 1: Do we need to be concerned about more black eyes 122 00:07:29,560 --> 00:07:30,480 Speaker 1: like what we saw in Spain? 123 00:07:30,880 --> 00:07:35,800 Speaker 2: Yes, we should, especially when the demand goes up strongly 124 00:07:35,840 --> 00:07:40,880 Speaker 2: which means extreme weather events very cold or very hot summer. 125 00:07:41,760 --> 00:07:45,520 Speaker 2: This may create a big strengths and the existing greeds. 126 00:07:45,600 --> 00:07:49,120 Speaker 2: So the first job the next chapter for European Commission 127 00:07:49,160 --> 00:07:53,480 Speaker 2: should be strengthening building new grets in order to address 128 00:07:53,480 --> 00:07:55,600 Speaker 2: these electricity security challenges. 129 00:07:55,720 --> 00:07:58,680 Speaker 1: Okay, Passy Perrel they had at the International Energy Agency. 130 00:07:58,680 --> 00:08:00,800 Speaker 1: Thank you very much for joining us our Brussels studio 131 00:08:00,840 --> 00:08:01,280 Speaker 1: this morning.