Energy policy. Since the start of the war in Ukraine and the choice to sanction Russia, the countries of the European Union have faced a sharp drop in deliveries of Russian gas, on which several of our neighbors depend. From now on, the International Monetary Fund itself is concerned about the possible supply problems that the nations of Europe could face and the Commission is encouraging them to reduce their gas consumption by at least 15% by the end of the month of August, indicates Ouest-France on its site. But what would France look like if the gas actually ran out? The opinion of Philippe Crevel, economist, interviewed by Planet.
Philippe Crevel is a macroeconomist, specialist in issues relating to pensions and savings. Today, he directs the Cercle de l’Epargne.
Planet: The hypothesis of a France cut off from Russian gas seems more plausible than it has ever been. Several European plans have been considered to counter this type of situation. What are they, exactly?
Philippe Crevel: The European plans aim to ensure the supply of gas in all the countries of the European Union, in priority for the winter period to come (2022-2023) but also for the winters which will come afterwards. In addition, they also include a section relating to the reduction or elimination of the supply of Russian gas.
The first objective, to resist such a situation, is none other than to fill the tanks of the member countries. This now involves actively seeking other suppliers, particularly from countries such as Algeria or the United Arab Emirates. In addition, Europeans are now advocating the establishment of a common energy policy, which means favoring group purchases to lower prices and providing for mechanisms to be activated in the event of a shortage. In this way, we avoid the temptation for certain countries to apply a scorched earth policy and we protect vulnerable countries from an implosion of their market.
In the long term, the European Union is considering ways to no longer depend on Russian gas. Projects for the development of renewable energies, but also for the development and improvement of infrastructures are currently being considered.
Planet: What would be the daily impact of a Russian gas cut this winter? Should we expect real blackouts? A price hike?
Philippe Crevel: In the current state, that is to say at the beginning of July 2022, European gas tanks were 60% full in anticipation of winter 2022-2023. The objective is now set at 80% by this fall, but several technical obstacles could pose a problem, up to around ten percent. Let us not forget, however, that the European Union is often effective in an emergency and that France is not among the most vulnerable nations due to its low dependence on Russian gas.
That being said, it is important to remember that the price shield should also protect French women and men from rising prices (which have been multiplied by 7, by 8 and sometimes even by 9) but that it cannot be maintained ad vitam aeternam. The other problem that should be mentioned is that of a potential gas shortage in France. In practice, this seems implausible: we should instead expect occasional selective rationing, which would push large industrial consumers to reduce their gas needs to the detriment of economic activity, so as to preserve as much as possible may be household heating capacities. They will only be called upon as a last resort, the government said. So there is no need to be overly alarmist.
Planet: You were saying that the price shield cannot be maintained indefinitely. When will I have to pay?
Philippe Crevel: For the time being, the government has decided to maintain the tariff shield at least until the end of the year. However, it should be remembered that the longer it is maintained, the more difficult it will be to get out of it. The government’s initial bet was based on a prompt return of prices to a normal level.
In my opinion, it will be difficult to get out of the tariff shield as long as prices continue to rise. That being said, as new contracts are signed and new infrastructures are developed, gas prices could decrease. At that time, it will be possible to gradually return to the shield.
This is all the more important because it is necessary: it is a costly effort, estimated at 30 or 40 billion euros by the end of the year. Let us not lose sight of the fact that this is a transfer of the burden to the taxpayer, financed by compulsory levies and savings, which in no way solves the problem. In addition, this type of general measure undeniably benefits wealthier households more than poor households. It is better to set up a system of targeted aid.