The newspaper headlines in London proclaim that the temperature will drop to -10, and that Russia has just cut the gas supply to western Europe – again. And yet the reaction here, seems rather less alarmed than the first time this happened back in 2006.
Why? For three reasons, I think. First, bad news is always slightly less shocking, the second time around. Second, there is now more of a sense that this is a genuine economic dispute, as much as a Russian power-play. There are real arguments to be had about Ukrainian debts to Gazprom, and the price Ukraine pays for its gas.
But the most important reason is that Europe is actually rather less in thrall to Russian gas than we first thought. In Britain, just 3% of our energy needs are met by Russian gas. Pierre Noel of Cambridge University summarised the situation rather neatly in a recent paper for the European Council on Foreign Relations called “Beyond Dependence: How to Deal with Russian Gas”. Read more