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foreign [Music] special investigating the security of Europe's energy Supply in the wake of apparent attacks on the pipelines that Supply the EU with its natural gas the block is reassessing the vulnerability of its energy infrastructure as well as the physical resilience of supplies Europe is also working swiftly to improve its broader energy security and end its sensitivity to factors beyond its control on robots in Berlin and I'm joined by Olga kakova deputy director of European energy security at the Atlantic council's Global Energy Center welcome to the program Olga it's great to have you with us thanks so much for having me on so does Europe have an energy security problem yeah Europe has a Russia problem which in turn has become an energy security problem uh Europe has actually invested quite a bit in the last several decades and diversifying its energy markets in integrating the energy markets and decoupling ownership of different energy assets uh making sure there's a lot of competition uh both on the electricity side and natural gas site but having this Monumental Reliance on Russian energy sources and then having Russia weaponize these energy sources in order to push Europe to reduce its Reliance to reduce the support for Ukraine has resulted in this crisis is Russia really the only source of energy security concern within the EU though probably not to be fair the crisis during today actually is you know kicked off um late last year um as as you recall the prices already started going up and this was before the war but Russia did everything in its power to exacerbate it so would we still be experiencing higher prices some challenging challenges across the energy sector right now had enough just because of Russia um sure there would be you know some higher prices some volatility across the market but not to the extent that we are experiencing right now Russia has self-fanctioned itself and you know all its natural gas exports to to Europe to unprecedented low levels we're only seeing about 40 BCM going through Ukraine's pipeline Network right now um you know compared to 155 and in some of the higher years and I would say over the last five ten years uh some of those exports to Europe were up to 200 BCM on on the fire and at about 155 on 45 in the last uh so recent years when we saw some of the demand go down to decoded in another reasons let's discuss the recent attacks on the Baltic Sea pipelines that normally Supply Russian gas to Europe because Olga did just mention the pipelines a gas started to gush out of leaks in both the nordstream one and nordstream 2 gas lines between Russia and Europe last week the points where the leaks occurred and marked here occurred a marked here in red as you can just see them there the EU suspects sabotage is behind it Swedish investigators say they found evidence of detonations at those leakage points so back to Olga kakova on this I mean these leaks are too much of a coincidence not to be sabotaged right 100 not a coincidence with this many explosions happening back to back um on both strings on on both of the pipelines North stream one and North stream two it's important to remember that Russia actually stopped sending gas through Nordstrom one uh in the beginning of September and Nordstrom too never sent any gas to Europe because the pipeline was sanctioned as a result of Russia's attack on Ukraine so Russia had a lot of different reasons even though right now we still don't have that 100 confirmation but everything is pointing to Russia all of the incentives are for Russia to be behind this because by doing this Russia has created volatility across the energy markets we've seen some pricing starting to go down in terms of the natural gas prices Futures and then of course following these explosions this volatility has caused the market to Rally back up particularly for natural gas there's this uncertainty around well could other pipelines be next and what kind of response would that need from NATO because it involve Article 5 um and of course you know the disinformation or that Russia has launched with this just kind of blaming this or this country and you know it's interesting too because each pipeline has two strings no string one has two strings and Northern two restaurants both of the Nordstrom one pipeline strings were you know were formed any explosions only one of the streams of the north stream 2 pipeline was blown up so now Russia is offering to send gas through the second string that was unharmed uh to Europe kind of if you look at like Russia's overall strategy of sending out through Nordstrom too something they've been working on and to spend billions of dollars and I'm not just talking you know actually the actual pipeline but if you look at kind of all of the other infrastructure that's involved with it it's just billions and billions of Investments so and it also just showcases that it's it's a it's a message sent saying we're willing to blow up our own pipelines just to just to send a message and show you how serious we are about this energy War yeah I mean how vulnerable is Europe's energy Supply to you know physical attacks like this given that it is relying on you know things like gas and oil that have to be transported one way or another right so not coincidentally this happened the day that the Baltimore Pike went online connecting Poland with Norwegian uh supplies uh so it was also you know another way to kind of create this fear of you know could other interest critical infrastructure across Europe be next but if Russia was to attack other infrastructure across Europe I mean that could very likely invoke Article Five and that is not a response that Russia wants or is ready for um so yes everyone is on high alert if you um see what's happening in Norway they actually are sending off their military to keep a closer eye on all of the critical infrastructure um there's you know intelligence sharing uh greater attention being paid to any of this not just um actual physical threats but also cyber threats some of this infrastructure greater cooperation there so uh Europe and U.S are on high alert um and they're ready to react if anything like that is to happen okay well just moving on from pipelines uh this week the OPEC plus group of oil producing Nations including Russia made a move that's likely to make energy even harder to come by for the West they're planning to cut production by two million barrels per day in the face of falling crude prices the US called the decision by OPEC plus short-sighted but OPEC members say they are working to support energy security will continuously prove that OPEC plus is here not only to stay but here to stay as a moderating force to bring about stability you are not endangering the energy markets we are providing security stability to the energy markets Enterprise everything has a price energy security has a price as well just to make a broader point on Europe's energy security relating to oil does Europe's continued Reliance on oil as an energy source meaning that it's actually quite vulnerable to decisions like this from organizations like OPEC right so there is vulnerability and kind of overall fossil fuel Reliance uh because of the volatility in the markets there and you know not just oil natural gas as well and then of course anytime there's a cartel or some kind of a decision making body that can restrict or decide to ramp up production and just kind of make that announcement you know within a couple of days um that risk still exists and this is why we're seeing us kind of trying to figure out how to how to respond to this uh they're there are some uh increased calls for no pack legislation um to be kind of be brought back up and we don't know if we'll actually you know pass and kind of right now uh where all everyone is just looking into the implications of you know if that was to move forward what what would that mean for the global oil Market um but yes there's definitely a risk foreign agreements across the world that yes we need to move towards a net zero economy but what does that actually look like and what is the realistic path to get there particularly in this high price Market environment um that's that's the tough part and as you have all of these geopolitical tensions that are making any kind of definitive plans they're just throwing a wrench into them right I'll just stay with us just uh I want to cross over to something else here the eu's trying to shore up its own energy security by finding alternatives to Russian gas now liquefied natural gas from the US and the Middle East is set to play a bigger role in Europe's Energy Future as a result of that but getting it to member states is one of the big challenges Europe's biggest importer of LNG is Spain it has six major terminals taking shipments however there are currently just two pipelines linking those shipments with the rest of the EU that's why this week Germany's chancellor Schultz and Spanish prime minister Pedro Sanchez agreed the need to finish a third pipeline midcat that you can see here by 2025. there's a great race to secure LNG at Great expense but how wise an investment is LNG LNG natural gas overall will continue playing a really important role in European energy security and also Europe's decarbonization efforts as well and particularly when we look at their you know this year we saw a huge ramp off of coal generation and plants that were formerly phased out slows down or on track to be closed down on being fired back up so anytime you're replacing coal with natural gas you're already getting decarbonization there anytime we're replacing Russian natural gas even pipeline natural gas coming from Russia because of how they produce it because of the lack of conspiracy because we already have the data that we do have right now we know that other suppliers particularly us um and others around the world we produce it um at a lower carbon intensity so it by simply switching from the Russian natural gas you're already getting that decarbonization benefit but at the same time um there will still have to be around death efforts around for these natural gas exporters to reduce methane emissions and overall carbon intensity across the value chain of of natural gas and you know this conversation about integrating Liberia with the rest of Europe you know this has been brought out for the last several decades if you would and it's interesting that now that this energy crisis has finally kind of jolted this project into into reality um but it is a tremendous opportunity because because that region does have multiple um LNG terminals uh which you know much of Europe is still lacking um but even uh FSR youth are being built out at a record Pace um Germany's looking into getting five done um but at the end of this year which is just I mean incredible once again we were you know Germany was also talking about LNG terminals for the last five ten more years and now with this energy crisis and Nordstrom 2 uh Nordstrom one not suddenly uh any gas now it's now it's finally Germany assessments yeah Germany's certainly setting its store by LNG but Germany's position on energy security is also that there needs to be much more interconnectivity among Europe's networks so energy can be shared when the member states are running low so here's what Chancellor Schultz had to say at this week's meeting of the new European political community in Prague that applies to Central and Eastern Europe to Southern and Central Europe to Western and Central Europe and that applies to Northern and Central Europe that's part of it that we build a European Grid it's important for the electricity grid the gas grid and the future hydrogen grid so Olga is Europe's Future Energy security dependent on how well member states can work together from the very beginning of this horrible attack on Ukraine and having countries kind of align on their response on their support for Ukraine but also just overall like multiple sanctions packages if you think about how many have been passed um they just approved the uh they just rolled out the eighth sanctions package which is just incredible if you think about 27 member states agreeing on these ginormous measures and then at the same time uh looking at how to restructure the the energy market so the solidarity is extremely important um as was mentioned uh in in the reminds us to a couple seconds ago particularly as the country is going to Winter and they will need to figure out how to manage the storage the natural gas that's being stored making sure that that's being properly shared um and of course on electricity uh the markets have been you know integrated quite well um and a lot of Investments going into from the EU funds to make sure that the electricity markets are well connected but there's still opportunities in some parts of yours particularly in central eastern Europe and as we look into some of the Southeastern um areas as well for even further integration further integration means more efficient uh operating markets it means that maybe you know if uh it provides signals being sent straight for one country for example that may have larger uh let's say Hydro sources or other sources you know if they're going through a draw or something else then they you know they can integrate and they can get electricity sent from from other countries say you know same thing when it comes to um Natural Gas right well a lot of changes coming in Europe's energy infrastructure and the future ways in which we keep the lights on here in Europe Olga kakova from the Atlantic council's Global Energy Center thank you so much for joining us on this TW business special thanks so much for having me it's a pleasure and thanks also to you for watching there's plenty more from the DW business team on the DW news YouTube Channel please go there and check it out we've got a wonderful series called business Beyond where we take a look at the broader implications of the new stories we follow day to day until next time take care foreign