High costs of cutting Russian energy
Consumers, business owners in Europe caught in the middle
MILAN — Across Europe, rising energy prices are testing the resolve of ordinary consumers and business owners who are caught between the continent’s dependence on cheap Russian energy and its revulsion over President Vladimir Putin’s invasion of Ukraine.
Governments are trying to replace energy supplies from Russia, mindful that their regular payments are funding a war that has seen thousands of civilian deaths and widespread destruction. They also face a nerve-wracking showdown with Moscow over its demands for payments in rubles, and the possibility that Russia will block supplies, as it recently did to Bulgaria and Poland.
European Union countries import 40% of gas and 25% of oil from Russia, and the current EU timetable doesn’t foresee energy independence from Moscow for another five years. As atrocities unfold, the EU is looking to sharpen sanctions.
The EU’S executive commission this week proposed phasing out imports of crude oil within six months and refined products by the end of 2022. It must be approved by all 27 member countries, which will be a battle because some are more dependent on Russian oil than others. Still, oil is easier to replace than natural gas, which is used to generate electricity and power industries.
In a poll of 1,230 random voters published last month by German public broadcaster ZDF, 28% said the country should halt natural gas and oil imports immediately, even if it means supply problems, while 54% said it should only happen if the supply is largely secured, and 14% opposed a ban.
It shows how the economic blow is increasingly falling on consumers and businesses that already saw natural gas prices start to soar last summer. Some of their stories:
In Italy: Struggling residents of one of Italy’s lowestincome neighborhoods on Milan’s periphery line up twice a week to ask for help making ends meet. Increasingly, they come clutching utility bills.
Since energy prices began spiking, a three-woman panel that adjudicates the requests at Santa Lucia parish in Quarto Oggiaro have another resource to help the needy: an energy packet funded by the A2A energy company that offers up to $315 a year to families who can’t pay their higher utility bills. About 100 families have qualified since September.
Alessandra Travaglini, 54, hit the maximum even before the war as her utility bill doubled to over $125. She has been out of work as an in-home caregiver for two months and hopes the parish can give her even more help.
There’s not much room for cutting energy use.
“I don’t cook a lot. I run the washing machine only in the evening or on weekends. I take short showers, I use the oven maybe once a month, and I iron once, maybe twice, a week,” Travaglini said. “I am scared.”
In Hungary: Kritztian Kobela-piko, a gas fitter and plumber in Budapest, sees his profession intimately connected with his country’s relationship to Russian energy. And being just a couple of hundred miles from Ukraine, the war is hardly a distant reality.
The 41-year-old independent contractor installs gas boilers, using materials that have become exponentially more expensive. He said he sympathizes with the war’s victims and would be willing to make personal sacrifices if it meant Ukrainians could better defend themselves.
“At most, I will have to tighten my belt a little,” Kobela-piko said. “But these sacrifices are nothing compared to the situation of people living in Ukraine. I think that this sacrifice is the minimum, something I would do any time out of solidarity.”
Hungary, a former member of the Soviet bloc, gets 85% of its gas and more than 60% of its oil from Russia.
Putting pressure on a country that Hungary depends on for its energy resources “is a very unpleasant situation,” he said.
In Germany: Carletta Heinz is calculating the impact of a gas cutoff for the 400-yearold glass company she took over from her father as the 13th generation.
The Heinz-glas Group, which makes bottles for international cosmetic and perfume brands, would have to close a gas-fired facility in the town of Piesau. That would ruin tanks that need to stay above 1,650 degrees Fahrenheit to keep molten glass from solidifying.
The company has transitioned to electricity at headquarters in nearby Kleintettau to lower carbon emissions, but it still needs gas for some processes there.
If a gas boycott leads to government-imposed rationing, Heinz said, then Germany must ensure that glassmakers get at least 70% of their current energy to keep tanks hot and avoid widespread equipment losses.
Beyond her company, she is worried about the impact on glass-making companies near the border between the Thuringia and Bavaria regions, which employ 5,000 people directly and 8,000 others indirectly.
Job losses could mean higher carbon emissions if production shifts to countries with fewer environmental protections, said Heinz, 38.
“In Germany, we’re more developed regarding environmental protection. Glass will still be needed and would be produced in other countries, which for our planet would be definitely worse,” she said.
In Bulgaria: Nikolay Belev’s income as a construction worker in the Bulgarian capital of Sofia is not keeping pace with gas and oil prices. And he is not ready to take on more pain for Russian sanctions, which he thinks are improper and will only bring more inequity in the EU’S poorest member state.
“These sanctions are meant to weaken Russia’s economy, but in the end, they hit back on my country and particularly on the people with lower incomes,” Belev said. He also complained that higher energy prices have driven up the costs of his materials — as much as 30% in the last two months.
Bulgaria, a nation of 6.5 million people, once was among Moscow’s closest allies during the Soviet era. Now a NATO and EU member, it is still heavily dependent on Russian energy. Its only oil refinery is owned by Russia’s Lukoil, supplying nearly two-thirds of the country’s energy needs. The only nuclear power plant, generating over a third of Bulgaria’s electricity, runs on uranium that comes from Russia.