Economic impacts of natural gas flow disruptions between Russia and the EU

Abstract

In this paper we use a non-linear programming approach to predict the wider interregional and interindustry impacts of natural gas flow disruptions. In the short run, economic actors attempt to continue their business-asusual and follow established trade patters as closely as possible. In the model this is modelled by minimizing the information gain between the original pattern of economic transactions and the situation in which natural gas flows are disrupted. We analyze four scenarios that simulate Russian export stops of natural gas by means of a model calibrated on an international input-output table with six sectors and six regions.The simulations show that at the lower levels of aggregation considerable effects are found. At the aggregate level of the whole economy, however, the impacts of the four scenarios are negligible for Europe and only a little less so for Russia itself. Interestingly, the effects on the size of the economy, as measured by its GDP, are predominantly positive for the various European regions, but negative for Russia. The effects on the welfare of the populations involved, however, as measured by the size of domestic final demand, have an opposite sign; with predominantly negligible but negative effects for European regions, and very small positive effects for the Russian population.

The evaluation of the EU trade with Russia based on the analysis of selected indices: Revealed comparative advantages, intra-industry trade, and trade intensity

“…The decrease in export and import was about 30%. Nowadays the trade is affected by mutual economic sanctions and declining of prices of oil and natural gas (Bouwmeester & Oosterhaven, 2017). Trade balance between the EU and Russia was passive all the time in the years 2005-2016.…”

Trade wars and the changing international order: a crisis of globalization?

“…Restrictions against Russia imposed by the US and the EU during the Ukrainian crisis in March 2014 accelerated geopolitically motivated trade wars (Aalto & Forsberg 2016;Bouwmeester & Oosterhaven 2017). Until this turning point, unlike the Soviet Union, Moscow had not been subjected to Western sanctions (Makasheva 2016).…”

Does the Development of Renewable Energy and Smart Grids Pose Risks for Russian Gas Projects? Scenario Forecast for Partner Countries

“…For the Russian economy, which still has a high degree of dependence on hydrocarbon exports (Paltsev, 2014;Orlov, 2017), this prospect creates certain threats and risks that must be taken into account in strategic planning of the development of the oil and gas complex, in particular, in the implementation of large gas projects. And, although the use of natural gas is not limited only to energy sector and the risks of completely abandoning it are minimal, the growing political and economic conflicts around gas projects of Russia, which are well described in the studies (Orlov, 2016;Lee, 2017;Stulberg, 2017;Vatansever, 2017;Bouwmeester and Oosterhaven, 2017;Richman and Ayyilmaz, 2019), attract additional attention to this topic and require a more detailed study of the real and emerging technical and technological capabilities of exporting countries to ensure its energy consumption in alternative ways.…”