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Assessing gas transit risks: Russia vs. the EU

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This paper proposes a Transit Risk Index (TRI) designed to assess the riskiness of pipeline gas imports and to study the effect of introducing new gas routes. TRI controls for gas dependency, transit route diversification, political risks of transit, pipeline rupture probability, and the balance of power between supplying and consuming countries along the transit route. Evaluating TRI for the EU-Russia gas trade, we show that the introduction of the Nord Stream pipeline would further widen already large disparities in gas risk exposure across the EU Member States. The gas risk exposure of the Member States served by Nord Stream would decline. In contrast, EU countries not connected to Nord Stream, but sharing other Russian gas transit routes with the Nord Stream countries, would face greater gas risk exposure. We discuss the implications of our analysis for the design of the common energy policy in the EU.

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  • Le Coq, Chloé & Paltseva, Elena, 2011. "Assessing gas transit risks: Russia vs. the EU," SITE Working Paper Series 12, Stockholm School of Economics, Stockholm Institute of Transition Economics.
    • Handle: RePEc:hhs:hasite:0012
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    1. Psarras, John, 2016. "Multicriteria decision support to evaluate potential long-term natural gas supply alternatives: The case of GreeceAuthor-Name: Androulaki, Stella," European Journal of Operational Research, Elsevier, vol. 253(3), pages 791-810.
    2. Flouri, Maria & Karakosta, Charikleia & Kladouchou, Charikleia & Psarras, John, 2015. "How does a natural gas supply interruption affect the EU gas security? A Monte Carlo simulation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 785-796.
    3. Corey Johnson & Tim Boersma, 2015. "The politics of energy security: contrasts between the United States and the European Union," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 4(2), pages 171-177, March.
    4. Hughes, Larry, 2015. "The effects of event occurrence and duration on resilience and adaptation in energy systems," Energy, Elsevier, vol. 84(C), pages 443-454.
    5. Filip Božić & Daria Karasalihović Sedlar & Ivan Smajla & Ivana Ivančić, 2021. "Analysis of Changes in Natural Gas Physical Flows for Europe via Ukraine in 2020," Energies, MDPI, vol. 14(16), pages 1-22, August.
    6. Yeeles, Adam & Akporiaye, Alero, 2016. "Risk and resilience in the Nigerian oil sector: The economic effects of pipeline sabotage and theft," Energy Policy, Elsevier, vol. 88(C), pages 187-196.
    7. Chen, Qian & Zuo, Lili & Wu, Changchun & Bu, Yaran & Lu, Yifei & Huang, Yanfei & Chen, Feng, 2020. "Short-term supply reliability assessment of a gas pipeline system under demand variations," Reliability Engineering and System Safety, Elsevier, vol. 202(C).
    8. Guych Nuryyev & Tomasz Korol & Ilia Tetin, 2021. "Hold-Up Problems in International Gas Trade: A Case Study," Energies, MDPI, vol. 14(16), pages 1-16, August.
    9. Hughes, Larry & Ranjan, Ashish, 2013. "Event-related stresses in energy systems and their effects on energy security," Energy, Elsevier, vol. 59(C), pages 413-421.
    10. Johnson, Corey & Boersma, Tim, 2013. "Energy (in)security in Poland the case of shale gas," Energy Policy, Elsevier, vol. 53(C), pages 389-399.
    11. Månsson, André & Johansson, Bengt & Nilsson, Lars J., 2014. "Assessing energy security: An overview of commonly used methodologies," Energy, Elsevier, vol. 73(C), pages 1-14.
    12. Aram Lee & Jeonghwan Kim, 2023. "Analysis of Bargaining Power between the EU and Russia by Altering Gas Supply Network Structure," Sustainability, MDPI, vol. 15(5), pages 1-12, March.
    13. Dubský, Zbyněk & Tichý, Lukáš & Pavliňák, Daniel, 2021. "A quantifiable approach to the selection of criteria and indexation for comparison of the gas pipeline projects leading to the EU: Diversification rationality against securitisation?," Energy, Elsevier, vol. 225(C).
    14. Le Coq, Chloe & Paltseva, Elena, 2012. "The EU-Russia Gas Relationship: a mutual dependency," SITE Working Paper Series 18, Stockholm School of Economics, Stockholm Institute of Transition Economics.
    15. Chen, Qian & Zuo, Lili & Wu, Changchun & Cao, Yankai & Bu, Yaran & Chen, Feng & Sadiq, Rehan, 2021. "Supply reliability assessment of a gas pipeline network under stochastic demands," Reliability Engineering and System Safety, Elsevier, vol. 209(C).
    16. Peter Zeniewski & Carlo Brancucci Martínez-Anido & Ivan L.G. Pearson, 2013. "Framing new threats: the internal security of gas and electricity networks in the European Union," Chapters, in: Hugh Dyer & Maria Julia Trombetta (ed.), International Handbook of Energy Security, chapter 3, pages 40-69, Edward Elgar Publishing.

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    More about this item

    Keywords

    Gas transit risk; Index; Security of supply; Nord Stream; Common Energy Policy;
    All these keywords.

    JEL classification:

    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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