Mikhelson: barriers created to Russian gas harm economic growth and people’s well-being worldwide
Speaking at the 17th Verona Eurasian Economic Forum in Ras Al Khaimah, Novatek Management Board Chairman Leonid Mikhelson noted that, without Russia, the world will not be able to ensure energy transition, avoiding a supply crisis. He believes the barriers created to Russian gas directly harm economic growth and the well-being of people in different regions.
“We have repeatedly stated that only the systematic work of all market participants will solve the problem of reducing emissions without compromising economic growth. This cannot be achieved through drastic decisions, as in the case of the termination of financing of oil and gas projects," Mr. Mikhelson said. He recalled how Europe's decision to abandon financing of hydrocarbon projects led to a rise in gas prices in 2021, “As a result, a new crisis related to the reduction of pipeline gas supplies to Europe happened the next year. Against the background of the crises, the priority of energy security and availability of supplies has become even more obvious. Countries, especially developing ones, do not want to create risks for their economic growth.”
Mr. Mikhelson mentioned the European Union as an example: here, huge funds have been injected in energy transition, and investments continue to increase. “Last year alone, they amounted to about $360bn and are expected to be even higher in 2025. The share of renewable energy in the EU has been increased to 17 percent by now. The share of gas has decreased from 34 to 25 percent, and coal – from 11 to 10 percent. If the share of coal had been reduced more, and gas, on the contrary, increased, it would have been possible to reduce emissions more and maintain stability for the economy. This, of course, would require costs, but disproportionately less than is spent on green energy transfer today,” he explained.
According to the expert, the world's gas consumption is more than 4 trillion cubic metres now, which is about 23 percent of the global energy balance. 550 billion of them are supplied in the form of LNG. Recently, gas was recognised as a transitional fuel of the BRICS countries, and Mr. Mikhelson drew attention to the practice of China in this regard, “100 billion cubic metres are currently consumed there in the form of LNG, and the figure is likely to reach 170 billion by 2040. We are talking about the country that is a leader in investments in energy transfer. In three years, the share of renewable energy there has increased from 6 to 9 percent, and gas has increased from 8 to 9 percent. As a result, the GDP growth made about 30 percent.”
As noted by Mr. Mikhelson, three resource bases — Qatar, Russia and the United States – can ensure the growing demand for gas. “Qatar's potential is already being fully realised, its capacities are being expanded as much as possible. Shale gas production in the US is expensive. In this regard, Russia is the most promising resource base. Without Russia, the world will not be able to ensure energy transition, avoiding a supply crisis. The barriers created to Russian gas directly harm economic growth and the well-being of people in different regions,” he stated.
