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Speaker 1: now though, on that EU deal to phase out Russian gas.
Speaker 1: The agreement reached in the early hours of this morning.
Speaker 1: We'll see you're a bend purchases of LNG and pipeline
Speaker 1: gas by September twenty twenty seven. Joining us in our
Speaker 1: Brussels studio to discuss the head of the International Energy Agency,
Speaker 1: Patti Berrel, Good morning, Great to see you in the studio.
Speaker 1: This has been a long road for the European Union.
Speaker 1: The war is three and a half years longer. Now,
Speaker 1: how significant is this moment? Is this deal?
Speaker 2: I think? I think it is a historical deal for
Speaker 2: Europe because Russia has been the number one energy supplier
Speaker 2: of Europe over half a century since nineteen seventies, and
Speaker 2: natural gas was the most important fuel here. Until recently,
Speaker 2: about half of the natural gas consumption in Europe came
Speaker 2: from Russia. So after the Russia's invasion of Ukraine and
Speaker 2: Russia using nature gas as a weapon, Europe took this
Speaker 2: decision European countries. It is historical and online and of
Speaker 2: course I congrege you to European countries. But on the
Speaker 2: other hand, the market context we are in is also
Speaker 2: helping Europe creating a room of maneuver, such as huge
Speaker 2: amount of LNG looking for nature gas coming to markets
Speaker 2: starting from twenty twenty six through two thirty, so there'll
Speaker 2: be a lot of alternatives to Russian gas for European countries.
Speaker 1: Is there a risk that the European countries simply replicates
Speaker 1: the situation they had of an over alliance on a
Speaker 1: single supplier by turning to other countries. You know, we
Speaker 1: know that the United States has also talked about wanting
Speaker 1: Europe to buy a lot more LANG from them.
Speaker 2: In fact, when we look at the history, the story
Speaker 2: with the Russian gas dependencies started in nineteen seventies when
Speaker 2: Europe wanted to diversify from Middle East oil went to
Speaker 2: another supplier to Russia. And I very much hope that
Speaker 2: Europe now learned this lesson that doesn't repeat the same
Speaker 2: mistake and create diversification for its energy imports. For me,
Speaker 2: the number one golden rule of energy securities diversify as
Speaker 2: much as possible. There are a lot of countries providing
Speaker 2: gas to the markets. Markets will turn from years and
Speaker 2: years being a market of sellers to the markets of buyers,
Speaker 2: so it's abect the Europeans and stronger, and of course
Speaker 2: US is a very important ally. Europe will continue to
Speaker 2: import US LNG, but there will be also other opportunities
Speaker 2: for europe queity.
Speaker 1: Russian supplies go now then with this deal to phase
Speaker 1: out the European purchasers.
Speaker 2: This is a key question for Russians and they first
Speaker 2: of all, they will lose a lot of money, loss
Speaker 2: of revenues. And it is not easy for gas, unlike oil,
Speaker 2: to go from one destination to another, because the big
Speaker 2: chunk of the Russian gas came to Europe through pipeline
Speaker 2: which will built years and years. And now Russia is
Speaker 2: trying to increase exports to China, which is in fact
Speaker 2: difficult undertaking for several reasons.
Speaker 1: The U Energy Commissioner also saying this morning that a
Speaker 1: proposal to ban imports of all Russian oil is going
Speaker 1: to be table at the beginning of next year as well.
Speaker 1: They're meant to have that on by the end of
Speaker 1: twenty twenty seven too. How important would that be in
Speaker 1: this move away from Russian supplies.
Speaker 2: I think when we see the Russian energy imports back
Speaker 2: of it, as we discussed as natural gas, there is oil,
Speaker 2: and there is also uranium supply, nuclear supplass coming from Russia.
Speaker 2: I think to bend oil from Russia is also very
Speaker 2: timely from a political perspective. But in addition to that,
Speaker 2: there is a huge amount of oil in the market.
Speaker 2: There's a surplus of oil oil production, so it wouldn't
Speaker 2: have a major impact nd the oil prices if it
Speaker 2: is done in a gradual and in a careful way,
Speaker 2: so it wouldn't lead the price spikes as many of
Speaker 2: us might be scared of. So I think it will
Speaker 2: be timely. If Europe goes that way, it will in
Speaker 2: turn have Europe to radius Russian energy export revenues.
Speaker 1: I'm wondering as well, because of course all of this
Speaker 1: is happening because of the ongoing war in Ukraine. How
Speaker 1: are you viewing the risks for Ukraine's energy system in
Speaker 1: this winter as Russia has been continuing attacks on their
Speaker 1: energy infrastructure, as Ukraine has on Russian energy infrastructure.
Speaker 2: We have been following the Ukraine energistration, especially when it
Speaker 2: comes to winter, and I would say that this is
Speaker 2: perhaps the most difficult winter of European battle Ukraine energy
Speaker 2: sector because it is all the very very vulnerable and
Speaker 2: we have seen the especially the electricity infrastructure and heating
Speaker 2: infrastructures under huge strain, and this would be the most
Speaker 2: challenging winter Ukraine has faced since the start of the wall.
Speaker 1: Do you see the situation getting much worse as the ructures.
Speaker 2: Exactly, it can't get much worse than we have seen
Speaker 2: in the last three years. But of course Ukraine allies
Speaker 2: are ready hopefully to support Ukraine, especially in terms of
Speaker 2: the electricity infrastructure.
Speaker 1: From the EU point of view, this was framed by
Speaker 1: the EU commissioned President ar Slavander line as part of
Speaker 1: the ramp up of renewable energy. Surprise in Europe too.
Speaker 1: I'm wondering, given the market dynamics that you've described, there's
Speaker 1: low prices for gas as well, is this going to
Speaker 1: take I suppose some of the inputus out of the
Speaker 1: EU to further that shift into renewables.
Speaker 2: It somewhat, but I think the denewments are growing so
Speaker 2: strongly in Europe. Just in the last three years after
Speaker 2: the after the we have seen the major energy crisis
Speaker 2: in Europe, renewables increase forty person. We have never seen
Speaker 2: any country, including Europe the European region, such a big increase,
Speaker 2: plus many European countries change their position. As I has
Speaker 2: suggested on nuclear power, there's a comeback of nuclear and
Speaker 2: with the cheaper nature gas, Europe will find a better mix,
Speaker 2: much more balanced mixed now good for the energy security
Speaker 2: and with the lower nature gas process good for the
Speaker 2: competitieness of Europe.
Speaker 1: But of course there's questions too about the grade adapting
Speaker 1: to this too. Of course, we have the blackout in Spain,
Speaker 1: a very dramatic moment for European energy supplies. How much
Speaker 1: of a risk are issues like that as the energy
Speaker 1: mix continues to change.
Speaker 2: I think the electricy security discs are there, and the
Speaker 2: nerve center of all the electricity discussions here is the greats.
Speaker 2: We don't have enough smart and modern greeds. The issue
Speaker 2: has been too much concentrated and building power plants and
Speaker 2: we are okay with that, but we don't have enough
Speaker 2: greeds to bring these electricity in the power plans to
Speaker 2: the household, to the factories. It is the next big
Speaker 2: job for European Commission.
Speaker 1: Do we need to be concerned about more black eyes
Speaker 1: like what we saw in Spain?
Speaker 2: Yes, we should, especially when the demand goes up strongly
Speaker 2: which means extreme weather events very cold or very hot summer.
Speaker 2: This may create a big strengths and the existing greeds.
Speaker 2: So the first job the next chapter for European Commission
Speaker 2: should be strengthening building new grets in order to address
Speaker 2: these electricity security challenges.
Speaker 1: Okay, Passy Perrel they had at the International Energy Agency.
Speaker 1: Thank you very much for joining us our Brussels studio
Speaker 1: this morning.