Did you notice the EU just lost its gas lifeline? Here’s what you should know

Did you notice the EU just lost its gas lifeline? Here’s what you should know

https://www.windtaskforce.org/profiles/blogs/did-you-notice-the-eu-...

By Willem Post

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With one deal in Beijing, Russia redirected energy flows that had run to the West for fifty years, eastward

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The EU’s cheap-gas lifeline just got handed to Beijing instead.

With three signatures, Russia, China and Mongolia rerouted half a century of energy history eastward.

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On Tuesday, the three countries signed a legally binding memorandum for the Power of Siberia 2 pipeline – a roughly 2,600-km line, at an estimated cost of around $13.6 billion, that will carry 50 billion cubic meters (bcm) of natural gas every year through Mongolia into northern China’s industrial heartland. 

While the pricing structure has yet to be fixed, the signatories have effectively redrawn the European energy map.

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For decades, this gas was the bedrock of German and Western European industry, piped from Russia’s Yamal fields in the Arctic through Nord Stream 1 (capacity 55 bcm/y) directly into Germany.

US/UK/EU blew-up Nordstream 2 (capacity 55 bcm/y) to ensure Norway and the US would greatly increase their natural gas flow to the EU.

The Nordstream 1 and 2 flows (110 bcm/y) could have been going to Europe, but now all of it will go to China.

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Isn’t there already a pipeline?

Yes. Power of Siberia 1, which came online in 2019, snakes east from Yakutia into northeastern China.

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RT

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What makes this deal different?

Power of Siberia 2 (dotted line) is different: it will run a more direct route through Mongolia, which will gain access to the gas, tapping the very Yamal fields in western Siberia that once connected to Germany through the Nord Stream and Yamal-Europe pipelines. Mongolia will earn transit revenues.

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Unlike POS1, which sources Russia’s Asian-facing fields, POS2 will draw gas from Arctic reserves that once fed Europe’s factories.  

In other words, it closes the chapter of Europe as the main customer for Russian gas and hard-wires China as the new anchor market.

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What's the timeline?

The memorandum is binding but still vague. Key details such as pricing formulas, financing structures, and construction deadlines have not been finalized.

One thing is clear though: once the backbone of EU’s growth, the gas will instead be sent into pipelines running east through Mongolia to China.

For Brussels and Berlin, it’s not just a loss of supply but a structural break: the age of cheap Siberian gas for Europe is over.

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The West has just been given a rude awakening

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A whole new energy map

As well as as the Power of Siberia 2 signing, Moscow also pledged to boost flows on existing lines. 

POS1 volumes will rise from 38 to 44 billion cubic meters a year – roughly a quarter of what the EU once bought from Russia. Russia’s Far Eastern route, piping gas in from the Sakhalin mega-projects, will rise from 10 to 12 billion cubic meters – about a tenth of what Europe used to purchase from Moscow annually.

But the big figure is Power of Siberia 2: 50 billion cubic meters annually, slightly less than the Nord Stream 1 pipeline once carried into Germany before it was blown up. 

Add it all together and China will be importing over 100 billion cubic meters of Russian gas every year – volumes comparable to the flows that for decades underpinned Europe’s industrial base.

For the EU, the symbolism is brutal. The same Arctic molecules that drove the post-war boom and kept German factories competitive are now earmarked for China.

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What does it mean for the EU?

The EU attempted to cut itself off from Russian supply after 2022, in a rupture that was allegedly tacitly backed by NATO.

Since then, the bloc has been forced to buy US LNG at much higher prices than Russian pipeline gas, triggering an energy price crisis across the bloc and helping drive Germany into recession already for 3 consecutive years.

With Power of Siberia 2 signed, the option of reversing course and reconnecting Europe to Russian gas has vanished.

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Beijing’s calculation

For years, Chinese leaders hesitated. Beijing worried about becoming overly dependent on Russian energy and feared a dependency on a neighbor for transit. But something shifted.

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Analysts point to two triggers: renewed hostility between the EU and Moscow, which makes the West an unreliable transit for Chinese interests, and US President Donald Trump’s warnings about Chinese access to global LNG markets.

In this light, a fixed Siberian line through Mongolia looks like a hedge – long-term, secure, and beyond US interference.

The agreement also lands amid volatility in the Middle East, including the Israel-Iran confrontation, which rattled Beijing’s faith in seaborne LNG.

Securing a land-based artery of cheap pipeline gas offers stability at a moment of global flux.

By praising the project as “hard connectivity,” Xi made clear that for Beijing, energy corridors are not just economics, but strategy – a way of locking in partnerships and reshaping Eurasia’s balance of power.

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China ‘completely’ stops buying LNG from US – FT

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The bottom line

The Power of Siberia 2 agreement is more than an energy deal.

It is a strategic redirection of Russia’s Arctic gas – from the pipelines that once powered Europe’s prosperity to a single buyer in the east.

Europe loses the cheap fuel that underpinned its industrial strength for half a century, and with it any realistic opportunity to recover access to Russian gas in the foreseeable future. 

Russia gains a guaranteed outlet-a partnership with China described as being “without limits” by both leaders, while Beijing secures long-term supply on its terms.

The global energy map has been redrawn, and the full consequences will only emerge in the near future.

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(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/

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Hannah Pingree on the Maine expedited wind law

Hannah Pingree - Director of Maine's Office of Innovation and the Future

"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."

https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/

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