So three days into the New Year and we have already had our first energy crisis, with a spat between Russia and Ukraine over gas prices. What started as a regional argument soon rapidly spread affecting Italy, Hungary, France, Germany and at least seven central and eastern European countries.
It has also highlighted just how dependent Europe has become on Russian Gas, especially with declining North Sea reserves. Russia accounts for about one-third of EU gas imports, and one-fifth of the gas used in EU.
As Russia punished Ukraine by turning off the tap, other European countries suffered too. Hungary faced a 40 per cent cut in supplies with Austria losing a third of its supplies.
And it’s just going to get worse. According to EU estimates, some two-thirds of energy requirements – and three-quarters of its gas – will be imported by 2020. Most of this will come from Russia.
This once again raises the question of energy security and just how vulnerable the West is becoming in its continuing dependence on fossil fuels.
It also throws geo-politics into front stage of pan-European politics yet again. As the Financial Times reported “Russia has become increasingly explicit about its intention to use its energy reserves as a foreign policy tool”.
If you annoy Russia it can literally turn off the tap, as Ukraine has found out to its cost in the last few days. But it is now just Ukraine that needs Russia’s vast gas fields. It is most European countries. The more they become dependent on Russian gas, the more they may live to regret it.
Welcome to the age of the new power politics of gas.