DOI: 10.32609/j.ruje.10.124364

Authors: Duc Huu Nguyen, Irina P. Khominich

Abstract: The conflict between Russia and Ukraine, along with the imposition of energy sanctions on Russian energy sources, has prompted a reassessment of the global energy market. Utilizing the difference in differences model, this study investigates the financial performance disparities among fossil fuel companies operating within the EU-27 bloc, Russia, and countries such as the United States, the United Kingdom, Qatar, Norway, India, China, UAE, and Saudi Arabia (countries that have benefitted from exporting fossil energy to the EU-27 as an alternative to Russia) during the period spanning from 2016 to 2023. The result reveals that fossil fuel companies from the United States, the United Kingdom, Qatar, Norway, India, China, UAE, and Saudi Arabia experienced significant advantages from substituting Russia in supplying oil, natural gas, and LNG to the EU-27. This is evidenced by a notable enhancement in their financial performance compared to both Russian and EU-27-based fossil fuel companies. For fossil fuel companies, the study highlights the urgency of diversifying export and import markets, broadening partnerships for fossil fuel trading and refining, transitioning to the production of lower-emission energy forms, and enhancing sustainable development practices to mitigate risks. At the national level, the research results indicate that countries reliant on imported fossil energy, akin to most countries within the EU-27, must swiftly diversify their energy sources and focus on developing renewable energy. This strategy is crucial to avoid unexpected shocks in the energy market in the era of geopolitical conflicts and uncertainty.

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DOI: 10.32609/j.ruje.6.55105

Authors: Jonathan Stern

Abstract: The role of gases in the energy transition is a different, and much more immediate, issue in the EU, compared with other global regions. Net zero targets for 2050 mean that in order to retain the gas market and the extensive network infrastructure which has been developed, zero carbon gases will need to be developed, and natural gas (methane) will need to be decarbonized. Maximum availability of biomethane and hydrogen from power to gas is estimated at 100–150 billion cubic meters by 2050 (or around 25–30% of gas demand in the late 2010s. Therefore, large scale hydrogen production from reforming methane with carbon capture and storage (CCS), or pyrolysis, will be needed to maintain anything close to current demand levels. Costs of biomethane and hydrogen options are several times higher than prices of natural gas in 2019–2020. Significant financial support for decarbonization technologies — from governments and regulators — will therefore be needed in the 2020s, if they are to be available on a large scale in the 2030s and 2040s. If the EU gas community fails to advance convincing decarbonized narratives backed by investments which allow for commercialization of renewable gas and methane decarbonization technologies; and/or governments fail to create the necessary legal/fiscal and regulatory frameworks to support these technologies, then energy markets will progressively move away from gases and towards electrification.

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