• One year after the beginning of the war in Ukraine, "20 Minutes" is more than ever mobilized to inform you about the conflict. From 22 to 28 February, the editorial team offers reports, analyses, testimonies, videos, podcasts to report on the daily lives of civilians, the military situation on the ground, the diplomatic game.
  • In this article, we look back at this year of shock on the gas market, marked by the end of Russian deliveries to Europe by pipeline, although they represented 40% of our gas imports before the war.
  • If prices are expected to rise less in the towers in 2023, it is still far too early to talk about a way out of the gas crisis. Will we return to the pre-war situation? The think-tank Shift Project doubts this.

"Crazy prices and maximum uncertainties about supplies." This is how Patrice Geoffron, economist, director of the Geopolitical Center for Energy and Raw Materials (CGEMP), describes the year 2022 for the gas market. The historic peak reached at the end of August, when there were most fears of the disruption of Russian gas deliveries to Europe, is an illustration of this. "Gas was then trading at 300 eurosper megawatt hour (MWh)," recalls Armelle Lecarpentier, an engineer at IFP Energies nouvelles (IFPEN), a French energy research and analysis organization.

If the market then calmed down somewhat, the fact remains that the MWh of gas traded on average over the year at 123 euros, "against 47 euros in 2021, an already very high price, 9 euros in 2020, and 13 euros in 2019," she continues.

Uncertainties that remain extremely high

Prices are expected to rise less in the towers in 2023. The mild temperatures since this autumn and the efforts made to achieve sobriety – EU gas consumption fell by 20% from August to November – make it possible to approach the year more confidently. "We end the winter with particularly high stock levels in Europe," says Patrice Geoffron. In other words, the EU should need less than usual to rebuild 100% of its stocks before next winter. Ifpen forecasts reflect this slight improvement, expecting the average MWh price to trade at 61 euros in 2023. "But this is a forecast that is only valid at the moment T, insists Armelle Lecarpentier *. Uncertainties remain extremely high and the situation can change dramatically. »

A virtual certainty, however: deliveries of Russian gas to the European Union are still at a standstill. "In 2021, 140 billion m³, or 40% of our gas imports, came from Russian gas pipelines," says Armelle Lecarpentier. The volume fell to 63 billion m³ in 2022 and could drop to only ten in 2023. It has become very marginal. »

Impossible sovereignty for the EU

It is therefore far too early to talk about a way out of the gas crisis in Europe. Will we ever return to pre-war prices? The Shift Project doubts this. At the beginning of December, the think-tank published a report, under the aegis of the Ministry of the Armed Forces, on the chronic lack of natural gas to which the EU is exposed in the future, "for lack of having learned to do without natural gas". The Shift project starts there: admittedly, the EU's gas consumption has fallen in 2022, around 366 billion m³. But it has been generally stable since 2010, around 400 million m³.

With such volumes, it is impossible for the EU to achieve any sovereignty over this energy. "Europe's natural gas production, excluding Russia, covered only 12% of its consumption in 2022. And above all, it has been in decline for twenty years, Matthieu Auzanneau, director of the Shift Project, recently explained. The reason is geological: a large part of the wells operated in the North Sea have reached their peak production. Only Norwegian production is growing, but it will only slow this decline. »

Not LNG for everyone

Without Russian gas and with production declining, it is then to liquefied natural gas (LNG) that the EU has mainly turned for a year. Condensed in a liquid state, it has the advantage of being able to be transported by boat and from far away. "LNG now represents half of our imports," says Armelle Lecarpentier. The big winner: the United States, with its shale gas. "The country now accounts for half of these LNG deliveries, i.e. a quarter of Europe's gas supplies, whereas its share was relatively marginal a few years ago," the economist continues. The Shift Project adds Qatar, whose gas reserves are large and still young, into the equation. The two countries "could occupy increasingly dominant positions in the global LNG market," the think-tank's report said.

The conflict in Ukraine has thus reshuffled the geopolitical gas cards, shifting the EU's dependence on Russian gas to LNG. And Matthieu Auzanneau does not describe it as much more comfortable. "LNG, in any case, there will not be for everyone," insists the director of the Shift Project. "Asia is matching or even surpassing Europe as the world's largest importer of gas." There is Chinese demand, which has been growing strongly for two decades and is expected to grow further in the coming years. But Matthieu Auzanneau insists above all "on the plausible rise, by 2030, of new massive needs in India, Pakistan, Thailand, Bangladesh, Indonesia ... ». As many countries as the international community is urging to phase out coal as soon as possible.

Another reason to make the energy transition?

This could significantly increase global demand for LNG and expose the European Union to a highly competitive, volatile and potentially high market. This was the case in early autumn 2021, with the restart of Asian economies after Covid-19. The Shift Project also recalls that the current gas crisis began with this first surge in prices.

The think-tank then sees only one solution for the EU to get out of this position of extreme vulnerability - or to limit its exposure as much as possible - "that of transforming its economy to make it low in energy," says Matthieu Auzanneau. The more we know how to decarbonize, the more we will be able to do without natural gas, and the more we will get out of the reef area in which we are. »

Our dossier on the war in Ukraine

This is one of the levers on which the European Union wants to play. Its Fit for 55 strategy, adopted before the war in Ukraine to reduce greenhouse gas emissions by 55%, aims to reduce European gas consumption by 30% in 2030 compared to 2020. Last May, "RepowerEU", the EU's battle plan to phase out Russian gas by 2027, was added, which pushes the reduction of fossil fuel consumption even further. "We must now move from words to actions," says Matthieu Auzaneau. This is still not sufficiently the case. »

* Armelle Lecarpentier is also Chief Economist at Cedigaz, the international gas information centre.


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