Europeans weigh costs of cutting Russian energy over Ukraine

Rising energy prices in Europe are testing the resolve of those caught between a dependence on cheap Russian energy and their revulsion at Moscow’s war in Ukraine

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 did to Bulgaria and Poland last week.

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 on Wednesday 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 to consumers and businesses, who already saw natural gas prices start to soar last summer. Some of their stories:

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HELP FOR THE POOR IN MILAN

Struggling residents of one of Italy’s lowest-income 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 kindly 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 300 euros 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 120 euros. 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 back on 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. ‘’

She worries that if Italy cuts off Russian energy or if Moscow halts supplies, her life will get even harder.

“I think they have to buy it from Russia, for now,’’ she said. “But for me, Italy has adopted the wrong strategy, because we have become enemies. I think that if Mr. Putin pushes the button, we will be the first targets” in any nuclear attack.

Roberto Bertolini can’t cover his last bimonthly electricity bill of 180 euros on his monthly income of 550 euros, working just three hours a day caring for disabled adults.

The war feels especially close for Bertolini. As soon as he retires, the 66-year-old plans to join his wife in Hungary, which borders Ukraine. He does not think Italy should be buying gas from Russia.

“These sacrifices need to be made,’’ he said. “When I see those images, I change the channel. It is too horrible — women raped, children attacked. They are not easy images. Not showing them isn’t right. But for me, I just can’t look.”

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BELT-TIGHTENING IN BUDAPEST

Kritztian Kobela-Piko, a gas fitter and plumber in the Hungarian capital of Budapest, sees his profession intimately connected with his country’s relationship to Russian energy. And with the capital just a couple of hundred kilometers (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.”

Since the war began, many clients have been converting their home heating systems to electricity, uncertain about the future of natural gas.

While Kobela-Piko believes harsher sanctions against Moscow is the right strategy, he said Hungary’s geopolitical situation makes breaking its dependence on Russian energy nearly impossible. 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.

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RUSSIAN GAS FOR GERMAN GLASS

Carletta Heinz is calculating the impact of a gas cutoff for the 400-year-old glass company she took over from her father as the 13th generation — and for communities in the heart of a glassmaking district in eastern Germany.

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 900 degrees Celsius (1,650 degrees Fahrenheit) to keep molten glass from solidifying. If Piesau has to shut down, it can’t be restarted, and production would go elsewhere.

The company already 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. In case of a dire shortage, EU law requires governments to shut off gas to businesses to spare homes and hospitals.

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

“I am just of the opinion that you first need alternatives. Naturally I’m for everything that hurts Russia and helps Ukraine,’’ Heinz added. “But we need to keep our industry in mind and see that we have a future, because if our industry is ruined then our country can’t help anyone else.”

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SANCTIONS BLOWBACK 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, who are the real victims of these sanctions” said Belev. 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 from Russia.

The current centrist coalition government is trying to get on a clearer pro-Western path by looking elsewhere for energy, including gas from Azerbaijan or liquefied natural gas via an pipeline with Greece. The LNG option will mean higher prices.

For Veselina Marinova, an editor who lives with her husband and 83-year-old mother, paying more for energy is a small sacrifice when weighed against the deaths of civilians in Ukraine.

“Nothing can justify the military aggression against a democratic country,” she said. “Of course, my family’s income will suffer because of the inflation fueled by the war. I am always aware that a severe crisis is looming, and that life will get harder. I do believe, however, that we must stay on the right track.”

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Toshkov reported from Sofia, Bulgaria; Spike from Budapest, Hungary.

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