Although energy security is an issue of critical importance for many different stakeholders, no consensus exists about its definition among scholars (Ang et al., 2015). However, many of these rendered definitions greatly resemble one another (Sovacool, 2011). This enables us to select one of them according to our goal, while many others are still compatible with it. For the aim of this research, energy security is defined as providing affordable, accessible, available, and acceptable energy for customers (Kruyt et al., 2009). In this research, we mainly consider the “accessibility” component corresponding to the geopolitical aspects of energy security. The other elements of this “4A” definition are classified into availability (geological existence of energy resources), affordability (the economic considerations­) and acceptability (the environmental and societal issues). Considering our aim of focusing on accessibility, the components of the composed index will be explained as follows.

Since one of the most critical sources of geopolitical risk of supply comes from dependency and concentration in the energy consumption portfolio, we assume these risks are measurable using the Herfindahl–Hirschman Index (HHI) (Pavlović et al., 2018):

HHI=∑i=1n(100xi), (1)

where x_i is the market share of the i^th gas supplier for a specific importer.

HHI is used to measure competition (or diversity) instead of dependence as an indicator of risks relating to a particular source or supplier. The higher the HHI, the higher the concentration, which means the system being examined is less diverse (Rubel and Chalvatzis, 2015). Therefore, if the number of suppliers is infinite (n → ∞), HHI “approaches” zero. This represents a market with perfect competition, while HHI = 10,000 indicates a total monopoly (n = 1), due to the existence of a single supplier.

PRs=∑i=1n(prsi.xi2), (2)

where pr_si shows the normalized PR_si, i.e. by dividing PR_Si by the highest PR_S value (represented by the worst state in the reference source). While PR_s includes political risks for different suppliers, ∑ x_i² can cover diversification concerns. Therefore, through equation (2), PR_s meets the requirements for having both geopolitical risks and diversification (or dependence) indicators.

Not many studies have attempted to quantify the geopolitical risks required to estimate PR_s according to equation (2). Some resources choose simple indicators, like the Human Development Indicator (HDI) as the reference, and others rely on more complex indices. Nevertheless, indicators like HDI look too straightforward for identifying geopolitical risks of energy supply (Kruyt et al., 2011). Muñoz et al. (2015) have quantified the geopolitical dimension of energy risk for 122 sovereign states. The combination of geopolitical and social dimensions in a single risk vector is vital for the current research aims, and their research meets this criterion reasonably. Although it was made in 2014, however, even at that point tensions were high between Russia and Ukraine in the aftermath of the Crimea annexation. Therefore, one can consider it still viable, as tensions have again escalated. Also, x_i is extracted from ENTSOG (European Network of Transmission System Operators for Gas) and, if necessary, validated by provided data from BP (2020) and Gazprom (2020).

While sporadic piracy cases exist involving LNG tankers, there are examples of how transit counties may (pretend to) use energy flow as a political lever against the importers, like how Belarus threatened the EU with Russian gas in response to Brussels’ efforts to impose sanctions against Minsk (Aarup, 2021). Hence, it is logical to include the influence of political transit risks in the composing index. Le-Coq and Paltseva (2012) tried covering this by proposing an indicator for gas transit risk, focusing on the Russian case as the supplier. In their work, transit states are considered as having bargaining power commensurate to the volume of gas passing through their territory. While this is applicable for the transiting states to make concessions from the main supplier, it does not cover geopolitical risks of supply or transit pointing to the final importer. Other research has attempted to focus on one specific European importer’s security of supply, such as Croatia (Pavlović et al., 2018) and Italy (Bompard et al., 2017), or to evaluate the importance of the EU’s infrastructure development for improving supply security through an economic rather than a political concept and approach (Abrell and Leo Chavaz, 2019).

Contrary to the research mentioned above, we prefer to concentrate on political risks rather than on technical ones. Basically, the political risk raises a certain level of “uncertainty” since interruptions caused by them are more challenging to predict than technically-induced blackouts or power cuts. Additionally, whenever they arise, it is not easy to estimate when they will disappear. Muñoz et al. (2015) claimed that their rendered data could also estimate the geopolitical energy risk for entire energy corridors by aggregating the geopolitical energy risk of the exporting and transit countries.¹ Assuming the importing gas passes through some transit states (m), total political transit risk equals the aggregated transit risks caused by each country. When this is multiplied by the risk for each route, we compute and then add to the risks attributed­ to other transit states, finally resulting in total political risks of transit, PR_T. Therefore, they are defined as follows:

PRTT=∑j=1mxj.∑i=1nprsi. (3)

While x_j is the proportion of imported gas passing via the j^th route (quoted by ENTSOG),  pr_si adds up the political risk of transit states in the j^th route (quoted by Muñoz et al., 2015).

The total political risk (TPR) of a hypothetical supplier across a certain route can be calculated by adding PR_T to PR_s, as below:

TPR = PR_T + PR_S. (4)

It is worth mentioning that since the range of both sub-indicators, PR_T and PR_S, is from 0 – 1, and both terms are dimensionless, the two terms are consistent to be added.

The importance of, and dependence on imported Russian gas is not uniform for all EU member states. For example, while the Eastern and Baltic States are heavily dependent on Russian gas, Western EU states have diversified their gas imports’ portfolio. As a result, member states’ economic vulnerability varies when it comes to disruptions to Russian gas. To calculate this concept, one can divide the net gas import from Russia to the Gross Domestic Product (GDP) based on purchasing power parity (PPP), as below:

Natural Gas Import Dependency (NGID) =

Natural Gas Import Dependency (NGID) =Imported Russian Gas VolumeGDP. (5)

In a sense, this may represent the financial possibility to switch from this source to others, as well. The imported Russian gas data has been extracted from ENTSOG, validated by two other sources of Gazprom and BP. GDP is extracted from IEA (2020), which quotes it based on the OECD and the World Bank.

2.1.4. Fungibility (F)

The European Commission recommends that member states enhance their ­energy resilience, including strategic storage capacity, installing more LNG importing facilities, and constructing new interconnectors to boost the EU natural gas network in the reverse direction (European Commission, 2014). This rationale has been reflected in enshrining the fungibility element in the rendered index. It indicates the functionality of the state against any gas supply disruption, relying on the state’s infrastructure and alternatives available for meeting its gas demand via alternative methods. This also increases the bargaining power of a final customer in negotiations with a certain supplier in terms of the contract, particularly regarding pricing. For example, when Lithuania launched its first LNG terminal in Klaipeda, it received a 20% discount from Gazprom, even though it had raised gas prices for the Baltic States in 2011 (Grigas, 2014).

In line with the Commission’s recommendations, and the N – 1 formula, the higher the “backup capacity.” the higher the resilience is. The fungibility potential comes from the operational LNG importing facilities, Underground Gas Storage (UGS) capacity, and available interconnectors (IC). We assume that the resilience of an importing gas state has a positive relationship with the availability of alternative supply options. The total capacity of all these facilities provided should be assessed compared to the demand volume to evaluate the usefulness and performance of these options in an emergency. Therefore, fungibility is determined as follows:²

F=Available Capacity of (LNG + UGS + IC)Annual Natural Gas Demand. (6)

Interconnector capacity and UGS capacities data were extracted from ENTSOG (2020). Corresponding data required for LNG was obtained from the International Gas Union (IGU) and was validated with data provided from ENTSOG (2020).

Now, considering all the elements as mentioned above, the composite aggregated Gas Supply Security Indicator (GSSI) is defined according to equation (7):

GSSSI=FTPR ∙ NGID.100 (7)

The GSSI index can render an applicable ruler for the aim of our research. While the fungibility indicates the bargaining power against a supplier, it can also show the resilience level against any interruption of gas supply using the backup capacities. The two elements of NGID and TPR in the denominator can represent the level of vulnerability against both a supplier and its corresponding transit routes and on natural gas in general, based on the diversity of the supply portfolio. The relative importance of each component of GSSI is not apparent, and, therefore, equal weightings have been considered.

Russian gas is not distributed across the EU in the same vein and through one route. While the Yamal–Europe pipeline passes through Belarus and Poland to reach Germany, Nord Stream lies on the Baltic Sea to arrive in Northern Germany, and the traditional route of Russian gas passes through Ukraine to be distributed in Central and Southern Europe (Gazprom, 2020). Additionally, Netherlands and Norway supply a part of EU gas demand (BP, 2020). Due to the expanded connections in the European gas network, different suppliers’ gas is mixed somehow so that is difficult to distinguish which source the flowing gas in the pipelines comes from at any given time. However, relying on the provided data by ENTSOG, we can distinguish the dependence of the bigger member states on Russian gas and the final destination where it goes to. Table 1 indicates how much of the exported Russian gas ended up in each member state in 2019. Considering this table, the six states — Germany, Italy, France, Poland, Austria and the Czech Republic — consume 80% of the total Russian gas exported to the EU. These six states will be selected as the case studies for this research.

The first noticeable fact about Germany is that Russian gas export to this country no longer transits via Ukraine, but instead through Belarus–Poland (via the Yamal pipeline), or is transported directly via Nord Stream (Pirani and Yafimava, 2016). Thus, the geopolitical transit risk is attributed solely to the Yamal pipeline via Belarus, as the other route (Nord Stream) connects Russia directly to Germany. Although it is the EU’s biggest natural gas consumer and importer, its importing portfolio is relatively diversified as indicated in the Appendix: Norway (24.66%), Netherlands (25.57%), Russia (23.37+18.58%), and other EU nations (2.39%). Moreover, Germany benefits from the high connecting pipelines’ capacity, which can provide reliable backup and the available UGS facilities in the absence of any LNG terminal.

The results show that the U.S. LNG replacement can improve Germany’s security of gas supply as the GSSI_{DE, U.S. LNG} reaches 17.2 from the initial level of 9.1 in the reference scenario. The positive impact of the U.S. LNG on German GSSI is compatible with the current field facts, as such alternation removes the political risks attributed to the Yamal pipeline for Germany. This connotes the future ambiguities around the Yamal route operation under the influence of the uncertainties of the long-term gas transit contract between EuRoPol GAZ and Gazprom, expired on May 18, 2020. Poland’s PGNiG declared its reluctance to extend the long-term gas supply agreement with Gazprom on Yamal, and Gazprom had not expressed its interest in using Yamal capacity either (Pirani et al., 2020; Jakóbik, 2021). Therefore, the U.S. LNG can alleviate Germany’s energy transit concerns.

Nevertheless, the results should not be interpreted to the absolute advantage of the U.S. LNG for Germany. First, Germany does not have an operating LNG terminal yet, which means U.S. LNG should be imported through other neighbors, as mentioned before. While ENTSOG data proves that their LNG terminal and reverse flow capacities suffice to replace Russian gas imported to Germany via Yamal, a conflict of interests may arise if these neighbors want to use their unbooked capacity to import LNG for other purposes, such as meeting their own needs. One solution is accelerating the planned LNG units in northern Germany, i.e. Wilhelmshaven and Brunsbüttel. However, such an idea is also problematic. According to German Uniper’s CEO, Klaus-Dieter Maubach, “it is becoming difficult for LNG to be competitive in the German market due to the good supply situation through pipelines – and with Nord Stream II, another one is coming” (Wettengel, 2021).

Our complementary calculations affirm Maubach’s statements; Germany’s GSSI can reach 13.51 if substitution of NS II instead of Yamal is considered, which is a promotion contrary to the current value of 9.1. Although this is still lower than GSSI_{DE, U.S. LNG}, NS II can provide cheaper gas to Germany given that the U.S. LNG cargos delivered to Germany’s neighbors are more expensive than the Russian gas to the German market (IEA, 2021). Additionally, NS II is expected to lower the price of Russian gas in Germany and Western Europe further (Goldthau, 2016; Günther and Nissen, 2019). This makes NS II even more advantageous for Berlin. In addition to economic considerations, NS II is a crucial project for enhancing Germany’s role in the European gas market, as it increases the transit flow through Germany by 17 bcm, enhancing the liquidity of Central European gas hubs (Goldthau, 2016). But in February 2022, the geopolitical situa­tion in Europe has radically changed because of Russia’s military operation in Ukraine, and the prospects of NS II remain highly uncertain.

Among the six selected member states, Italy has the lowest GSSI. This is because it imports more than 42% of its gas needs from Russia, mainly through Ukraine–Slovakia–Austria (north-eastern route), while a small portion also comes via Germany–Switzerland (north-western route), as depicted in Fig. 1. While the former still plays a prominent role, the latter is expected to be utilized more if NS II is launched. Until then, Italy is vulnerable to supply interruptions (Pirani, 2018). The GSSI_{IT, U.S. LNG} shows little promotion compared with the re­ference scenario since the vacant capacity of LNG terminals is just 18% (IGU, 2019). This limits the manoeuvrability of Italy for replacing Russian gas with U.S. LNG. Unlike with Germany, the possibility of importing LNG via neighbors is highly curtailed for Italy due to the lack of sufficient reverse flow interconnectors with France. This can explain why GSSI_{IT, U.S. LNG} is not much higher than the reference­ scenario.

One may suggest expanding the capacity of the interconnector or considering new LNG terminals in Italy for U.S. LNG, especially using EU’s financial aid. However, the EU’s main focus in energy policymaking has been gradually switched to the climate targets rather than the security of supply (Keypour and Ahmadzada, 2022). The Commission is revising corresponding legal outlines of energy infrastructures development like the Trans-European Networks for Energy (TEN-E) Regulation and the Projects of Common Interests (PCI) framework in the same vein. Under the new TEN-E and PCI structure, it will not be easy to apply for the EU’s financial aid to develop gas infrastructures, especially for enhancing gas supply security, like new LNG terminals in Italy. Therefore, within the available infrastructures, the positive impact of the U.S. LNG replacement in Italy’s gas market remains tiny.

As indicated in Fig. 1, the Czech Republic meets almost one-third of its demand from the OPAL pipeline as an extension of the Nord Stream. It also receives 1.6 bcm through Slovakia, which comes from Ukraine per se. Austrian dependence on the Ukrainian route is higher than that of the Czech Republic, and its import portfolio is less diversified, increasing risks (see Appendix). At first glance, LNG importation to the landlocked states of the Czech Republic and Austria seems non-existing ab initio due to their lack of access to the sea. Nevertheless, their relatively small market volume makes it possible to rely on the vacant capacity of the neighbors’ LNG terminals, like Italy and Poland. The impact of this substitution on GSSI_CZ is magnificent; it rises from 60.58 to 335.6. This sharp growth is justifiable due to two facts: the U.S. LNG diversifies the Czech gas portfolio, decreasing PR_s according to equation (2); it also reduces PR_T as the Czech Republic reaches non-dependency on Russian gas coming from the Ukrainian route. The same goes for Austrian GSSI.

While the positive impact of the U.S. LNG on the Czech and Austrian gas supply security is undeniable, other factors may moderate policymakers’ decision to lean towards the U.S. LNG. First, the price of imported LNG may not look competitive; exacerbated even more so in Germany’s case, whose situation we have already described, since the transit fee will be added to the importing LNG. Furthermore, given the Austrian and Czech Republic’s involvement in Central and Western European (Russian) gas-distributing, the likelihood of these states substituting Russian gas with U.S. LNG to any significant degree is slim. Jirušek (2020) has shown how the Czech Republic reoriented its stance favoring NS II and closer to the market-oriented attitude in recent years, making any redirection of gas supply patterns unnecessary for Prague. This is discernible, especially after the 2017 Gazprom long-term deal on gas transit through the Czech Republic until 2050.

In addition to NS II, another newcomer rival for the U.S. LNG, the Turkstream pipeline, should be accounted for. Gazprom started using this line to deliver gas to Turkey, Bulgaria, Greece, and North Macedonia in early 2020. This was followed by feeding Serbia, Bosnia and Herzegovina, and Romania. While the pipeline has not yet extended to central Europe, where Austria and the Czech Republic are, this can happen in the future. In that case, Ukraine’s role in delivering gas to Central Europe would be diminished, as it has already happened in Southern Europe. According to Ukrainian authorities, the Trans Balkan Pipeline used to transfer Russian gas to Southern Europe via Ukraine was operating at less than 5% capacity in late 2020 (CRS, 2021). The extension of Turkstream to Central Europe means that Austria and the Czech Republic can reduce the PRT needless of importing LNG from the United States via neighbors. Thus, U.S. LNG can positively impact the Czech Republic and Austrian gas supply security, yet it entails overcoming powerful rivals like Turkstream and NS II.

Fig. 2 indicates that Poland can experience a slight improvement in its GSSI using the U.S. LNG. Russia was the main gas supplier in Poland, with more than 53% of the total consumption in 2019 (see Fig. 1). Although Poland gets Russian gas via Belarus and Ukraine, Warsaw can receive gas from Germany via the Nord Stream extension, using the Mallnow gas station reverse flow at the German/Polish border ( ENTSOG (2020)). The only Polish LNG Terminal in Świnoujście can also provide up to 5 bcm of natural gas per year. However, as the role of Russian gas has been critical to the Polish gas supply, the GSSI_PL is still low. Świnoujście did not work at full capacity, reaching 70% in 2019 (IGU, 2019). Thus, if Poland uses the terminal for altering Russian gas, an additional 1.5 bcm of Russian gas can be substituted by the U.S. LNG, resulting in an improvement of GSSI to 28.4. One can also suggest utilizing the vacant capacity of the Lithuanian terminal in Klaipeda, the Independence, which was used no more than 47% in 2019, to unload other LNG cargoes (IGU, 2019). This will further improve GSSI_PL to 33.30 and is conducive to the Independence facilities’ economic performance.

Unlike other cases cited above, such as Germany, Poland has solid complementary political motivations to back the idea of Russian gas alternation in addition to the GSSI improvement. In fact, Warsaw has perceived the EU energy­ cooperation with Russia as a security threat due to its own long-standing adversarial interaction with Moscow (Siddi, 2020). In the aftermath of the 2006, 2009 gas disputes, Poland has tried to portray Russian gas as a “weapon” in the hands of the Kremlin against the EU, ahead of some other Central and Eastern European Countries (CEECs). Therefore, diversification of gas supply sources is mainly justified by political intentions in the eyes of Warsaw (Bocse, 2020; Brown, 2018). Similarly, one can explain the U.S. support for the EU’s energy infrastructure projects, considering the political aspects of EU–Russia gas relations, rather than pure economic interests. Given such a convergence in political approaches of the United States and Poland on Russian gas, one can expect to see Poland taking steps to reduce or moderate its reliance on Russian gas by relying on the U.S. LNG. As our research indicated, such a decision can be backed by the GSSI promotion as well.

Unlike the states mentioned above, France would experience a decline in its GSSI if it altered Russian imported gas with the U.S. LNG. This is justifiable considering the country’s gas market structure. Currently, France benefits from diversified gas providers consisting of twelve states, and Russian pipeline gas has no significant role (no more than 12%, see Appendix). Moreover, Russian gas is delivered to France without reliance on the Ukraine transit route, according to the gas deal between Gazprom and French GDF SUEZ in 2006, when parties agreed to deliver gas via the Nord Stream until 2030 (Gazprom, 2013), as depicted in Fig. 1. Therefore, replacement of U.S. LNG in France will not significantly improve the PR_T, but instead, it disturbs the diversification of the French gas portfolio resulting in higher PR_s according to equation (2). Therefore, such a policy lessens the GSSI_FR, and it does not look to be a rational choice for Paris.