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EU Leaders Say Putin’s Gas Power Is Weakening

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BERLIN — Not long after Russian forces invaded Ukraine, one other mobilization began. European energy ministers and diplomats began jetting the world over and inking energy deals — racing to arrange for a rough winter should Russia decide to cut off its low cost gas in retaliation for Western sanctions.

Since then, President Vladimir V. Putin of Russia has fiddled with the gas tap to Europe repeatedly. Through Gazprom, the Kremlin-controlled gas monopoly, Russia has vastly reduced supplies or suspended them for days at a time — until last week, when it announced that it might indefinitely halt flows through the Nord Stream 1 pipeline that supplies Germany, and thru it, much of Europe.

Yet when the blow finally got here, it provoked more ridicule than outrage amongst European leaders, who say that by now they might expect nothing less from Mr. Putin and that they’ve accepted that the era of low cost Russian gas is over, unimaginable as that may need seemed just months ago.

In some corners, at the same time as Europe’s leaders scramble to blunt the blow from lower gas supplies and better prices, there may be a growing sense that perhaps Russia’s weaponizing of gas exports is a technique of diminishing returns — and that Mr. Putin could have overplayed his hand.

“It will have been surprising the opposite way around,” Robert Habeck, Germany’s economy minister, said this week of Russia’s announcement that Nord Stream 1 would remain shut. “The one thing from Russia that’s reliable is the lies.”

Even the markets looked as if it would take the newest disruption in stride. After rising 5 percent on the heels of Gazprom’s announcement, prices at the moment are lower than they were at first of last week.

That doesn’t mean that European nations usually are not feeling the pain, or have skirted the danger that the energy crunch could sow social unrest, fracturing their unity against the Kremlin this winter. But lots of the damage has already been done, with gas prices several times above anything that may be considered normal and pressure mounting on consumers and businesses.

The query stays, then, of just how successful the hard pivot from Russian energy actually is — whether Europe has lined up enough latest sources, whether its stockpiles can get it through the winter, whether conservation efforts could make a difference and whether governments might help shield consumers from rising prices.

Russian officials are watching and waiting for what they imagine is the inevitable collapse of European resolve because the economic pain bites.

“I believe that the approaching winter will show how real their belief is in the opportunity of refusing Russian gas,” the Russian energy minister, Nikolai Shulginov, said in an interview with the Russian state-run news agency Tass. “This can be a totally latest life for the Europeans. I believe that, most probably, they may not give you the option to refuse.”

Russian state news outlets are stuffed with reports of protests in Europe. Italians, Russian state media reported, are being told to boil their pasta for just two minutes before turning off the warmth, while Germans are forgoing showers.

The message: In the end, the Europeans’ unity against Russia will crumble under the load of high gas prices, while Russia’s standing has been elevated.

“We’ve got not lost anything and won’t lose anything,” Mr. Putin said on Wednesday.

But increasingly, Europe’s leaders are signaling that, having spent months preparing for this moment, they’re ready for the showdown.

“Now our work is paying off!” the European Commission president, Ursula von der Leyen, said on Wednesday in Brussels. “Firstly of the war, Russia’s pipeline gas was 40 percent of all imported gas. Today it’s now all the way down to only 9 percent of our gas imports.”

That’s because European leaders — especially those from Italy and Germany, which rely most on Russian energy — have crisscrossed the globe. From Algeria to Qatar, Senegal, Congo and Canada, they’ve been negotiating deals to interchange Russian supplies.

Germany has also leaned heavily on Norway and the Netherlands, which agreed to increase the lifetime of its biggest gas field to combat the energy crisis.

In consequence, Germany’s dependency on low cost Russian gas — once greater than half its overall gas imports — decreased to lower than 10 percent in August.

In Italy, consumption from Moscow has dropped to 23 percent from 40 percent.

Chancellor Olaf Scholz of Germany and other European leaders are defiantly claiming the top of an era.

For many years, dating to the times of the Soviet Union, Moscow had insisted to Germany and others that it was a reliable energy partner, irrespective of the political context. But now, European leaders say, Mr. Putin has shattered that understanding.

“Something that held true throughout the Cold War now not applies,” Mr. Scholz said last weekend. “Russia isn’t any longer a reliable energy supplier. That is a component of the brand new reality.”

That latest reality, perhaps, shouldn’t have come as such a shock. Mr. Putin’s gas brinkmanship dates to 2004, when Gazprom cut deliveries to Belarus, in a battle for control of a transit pipeline into Western Europe.

In 2009, as Ukraine sought NATO membership under a pro-Western president, Mr. Putin ordered a pointy reduction in gas flows through the country; after Ukraine elected a pro-Russian president a 12 months later, the Kremlin rewarded him with a 30 percent cut in natural gas prices.

And even before Russia invaded Ukraine, it reduced exports in the summertime of 2021, and didn’t refill Gazprom-owned storage sites in Europe.

Sergey Vakulenko, an analyst in Bonn, Germany, who worked for years in Russia’s energy industry, said that over the past twenty years Russian officials had seen the geopolitical power that the US derived from its influence over the worldwide economic system, and sought to harness Russia’s status as a serious energy exporter in an analogous way.

“There was a fantastic desire, as a superpower, to have something similar,” he said. “There was the sensation that oil and gas was the reply.”

Yet Russia’s cuts in gas exports to Europe since its invasion of Ukraine are of a unique order of magnitude. “That is now just blackmail,” said Mikhail Krutikhin, a Russian energy analyst. “We haven’t seen it on this scale before.”

In going to this point, Mr. Putin has also invited greater risks. An internal Russian government economic forecast described this week by Bloomberg News estimated that a full cutoff of gas to Europe would cost as much as $6.6 billion in lost tax revenues.

But with Gazprom netting a record profit of $41.75 billion in the primary half of the 12 months — $10 billion of which it passed on to the Kremlin — that may be a cost Mr. Putin has calculated to be acceptable.

For Russia, oil is the most important revenue source, and Mr. Putin could also be keen to make use of gas as a political weapon while he can, said Thomas O’Donnell, an energy expert on the Hertie School, a public policy school in Berlin.

“That is where he’s got his biggest leverage to cause essentially the most trouble within the European Union,” Mr. O’Donnell said. He added, “It’s a lever that he knows he’s going to lose in a 12 months — and even possibly after this winter.”

And loads may rely upon the severity of the winter.

Even when liquid natural gas imports to Europe from other sources proceed at their record high rate, a study released this week by the research institute Bruegel estimated that an entire stop to Russian supplies would require all of Europe to chop its consumption by 15 percent.

European nations that used to depend on Russian gas imports for large chunks of their domestic energy production have been racing to fill gas storage facilities. Germany’s at the moment are at 86 percent capability, Italy’s at almost 84 percent.

In Germany, large industry players have to this point managed to drop their consumption by around 20 percent. An identical amount would should be shaved off household usage, in keeping with German energy and economy ministry models, should Russian gas remain shut off. If households don’t in the reduction of, Germany’s gas regulator has repeatedly warned, the choice may very well be rationing.

Europe is aiming to have enough liquid natural gas solutions in place by next 12 months. Germany recently signed a deal for a fifth floating L.N.G. terminal, while terminals in Belgium, France and the Netherlands are fully booked.

The important thing to surviving this winter within the face of a Nord Stream shutdown can be how well European states work together.

Thus far, only Hungary has signed a deal for extra supplies with Gazprom.

France and Germany, in contrast, agreed this week that Paris would send any excess gas to Germany, where it’s badly needed, and in return Berlin promised to send its extra electricity.

The tricky issue can be what happens should more critical German industry should in the reduction of, and voters begin to insist supplies not be diverted to neighbors — just like the Czech Republic, where 70,000 people already got here out in protest of soaring prices. It’s a challenge many European leaders may face this winter, warned Annalena Baerbock, Germany’s foreign minister.

“That can be the central query that can really put us to the test in the approaching months,” Ms. Baerbock said, at a gathering of German ambassadors in Berlin this week. “Will we give you the option to secure our energy supply for all people in Europe together in solidarity, or not?”

Gaia Pianigiani contributed reporting from Siena, Italy, and Matina Stevis-Gridneff from Brussels.

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