Piping systems of the Nord Stream 1 pipeline in Mecklenburg-Western Pomerania, Germany, on July 25, 2022.
Stefan Sauer—Getty Images
July 26, 2022 10:40 AM EDT

European leaders’ relief over last week’s resumption of natural gas flows from Russia’s Nord Stream 1 pipeline was short-lived, after the Kremlin announced on Monday that it would reduce supply to the E.U. from Wednesday.

The flow of gas from Nord Stream 1, a vital undersea pipeline that links Russian gas to Europe via Germany, had initially been halted for 10 days from July 11 for what Russia says were maintenance issues. The pipeline is currently operating at 40% of its capacity but that figure will drop to 20% from this week. The E.U. has previously accused Moscow of energy blackmail, and on Tuesday the bloc’s energy ministers struck a deal to reduce gas consumption by 15% from August to March amid fears of a total cut-off in the coming winter months.

Russia is the main supplier of gas for many European countries, which is used to heat homes in winter and power industries. The resource has become a focal point of E.U.-Russia tensions, with Moscow having already cut off gas to six countries and reducing supply to six more in response to the bloc’s sanctions over the war in Ukraine.

The E.U. has been planning for the worst-case scenario, seeking additional gas imports from countries such as Nigeria. Analysts tell TIME that, to secure European energy security, the bloc will need to continue to encourage demand reduction and invest in green energy alternatives.

Where does Europe get its gas from?

The E.U. imports a huge amount of its natural gas—around 40% prior to the war in Ukraine—from Russia because it’s both cheap and convenient, with the Nord Stream 1 pipeline carrying the majority of it. Germany alone accounted for around 20% of Russia’s total gas exports in 2020—but Germany also distributes Russian gas to other European countries.

The import route was due to be expanded with the parallel Nord Stream 2 pipeline. Although construction was completed in September, Germany shelved the project in February in response to Russia’s aggression in Ukraine.

Europe’s dependency on Russian gas was no accident, explains Raphael Hanoteaux, senior policy adviser at climate change think tank E3G. It was part of a decades-long project spearheaded by Germany to tie the two countries together. “Germany’s theory was that by increasing dependency on Russia, they would be trading with them more,” Hanoteaux says. “And if Germany and Russia were co-dependent, it would be less likely that they’d become adversaries.”

For a while, says John Lough, associate fellow at London-based think tank Chatham House, this theory seemed to work. “Even [during the Cold War] after the Soviet Union invaded Afghanistan and through to the nuclear weapons crisis in the early 1980s, the gas flowed, because the Soviet Union needed hard currency, and Europe wanted Soviet gas.” Germany continued to back the construction of the Nord Stream 2 pipeline in 2015, even after Russia’s annexation of Ukraine’s Crimea region in 2014.

But the war in Ukraine exposed the flaws in Germany’s high-risk strategy, says Lough, as Russia is leveraging its control over gas exports to increase pressure on European leaders. “That was a gamble that [Germany] took—we’re now seeing that it hasn’t paid off.”

Read more: Putin Still Holds the Cards When It Comes to Global Energy

Why Europe is preparing for a disruption of Russian gas

Russia currently supplies around 15% of Europe’s natural gas, well below pre-war levels. That decline has sent energy prices skyrocketing, and is contributing to a cost-of-living crisis and economic anxiety across much of Europe. Moscow’s latest announcement has only stoked those concerns.

“Russia is blackmailing us. Russia is using energy as a weapon,” said European Commission President Ursula von der Leyen, ahead of Moscow’s announcement. “Therefore, in any event, whether it’s a partial, major cut-off of Russian gas or a total cut-off of Russian gas, Europe needs to be ready.”

The E.U. has previously committed to reducing gas imports from Russia by two-thirds within a year, and is seeking to diversify with other suppliers, including Israel, Egypt and Azerbaijan. Human rights groups have criticized the E.U.’s approach, arguing that repressive regimes in countries like Azerbaijan will use the deals to evade accountability for rights violations.

And after months of intermittent reductions in gas flows to Europe, storage facilities in Germany are at about 65% capacity, well short of the government’s 90% target.

How Europe plans to cope

According to Massimo Di Odoardo, vice president of global gas research at energy consultancy firm Wood Mackenzie, the combination of additional supplies and demand reduction will help Europe reach storage levels in excess of 80% by the beginning of the winter. By Wood Mackenzie’s accounts, Europe-wide demand for gas is currently down by a fifth compared to the same period last year.

Although E.U. countries may be able to avoid imposing formal rationing on individuals, says Di Odoardo, continued increases to energy bills will stimulate a natural reduction in consumption. Wood Mackenzie’s analysis found that European demand for gas was down by 10-11% in the first six months of the year compared to last year.

And it’s not just consumers who will have to reduce consumption. In Germany, industry accounts for about a third of the country’s gas use. Companies in energy-intensive industries, such as chemicals and metals, are warning of knock-on effects on the whole economy.

The risk remains that Moscow will continue to “turn the screw” on European governments, especially if things don’t go in Russia’s favor in Ukraine, says Chatham House’s Lough. The Commission said a Europe-wide cut-off during winter could have a major impact on member state economies, reducing GDP growth by up to 1.5%. The International Monetary Fund warned it could plunge countries into recession. Particularly bad weather could make the situation even worse.

Read more: Here’s How to Solve the World’s Russian Oil Problem

But according to Di Odoardo, as long as Russia continues to benefit from European payments, the bloc is unlikely to be completely cut-off. “Russia has been living in the best of both worlds—successfully reducing flows and putting pressure on Europe, while increasing prices and getting high revenues.”

A June report by the Centre For Research on Energy and Clean Air found that Russia earned $97 billion in revenue from oil and gas exports in the first 100 days of the war in Ukraine, with the majority of that revenue coming from E.U. countries. The figure exceeds the estimated costs of Russia’s war in Ukraine, the report added.

In the long term, however, analysts say that Moscow’s manipulation of gas prices and supply will only accelerate Europe’s move away from Russian energy. Beyond the E.U.’s plans to reduce Russian gas imports by two-thirds within a year, the bloc has released a strategy to halt Russian oil imports via sea by the end of 2022.

That shift will, in the long run, include a renewed emphasis on renewable energy. “It’s never been cheaper and it’s never made more sense to actually invest in [green energy],” says E3G’s Hanoteaux. Although countries like Germany have been forced to break their own climate targets in reverting to coal and other fossil fuels in the short run, the emphasis on reducing demand could establish more sustainable consumption habits in future. “It’s not just a climate issue, but it’s also a security issue,” he says.

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