European Natural Gas through the 2020s: the Decade of Extremes, Contradictions and Continuing Uncertainties

Yaroslav Melekh, James Dixon, Katrina Salmon and Michael Grubb
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Yaroslav Melekh: UCL Institute of Sustainable Resources
James Dixon: UCL Institute of Sustainable Resources
Katrina Salmon: UCL Institute of Sustainable Resources
Michael Grubb: UCL Institute of Sustainable Resources

No inetwp233, Working Papers Series from Institute for New Economic Thinking

Abstract: The European gas system has entered a structurally volatile phase defined by post energy crisis overbuild, dislocated demand trajectories, and a decoupling mandate under REPowerEU. This paper interrogates the contradictions between fossil lock-in through LNG import capacity and overcontracting, and policy-driven demand reduction. The EU’s pivot to flexible LNG procurement exposes pricing to global volatility, while decarbonisation hinges on electrification, demand-side retrofits and hydrogen feasibility—each encumbered by cost, infrastructure lag, and political friction. We assess Europe's gas outlook through the decade's residual volatility, policy ambivalence, and the emerging global LNG oversupply regime — a clash with geopolitical energy security imperatives, domestic backlashes against capital-intensive green technologies and market inertia. We argue that Europe’s energy system now operates in a zone of structural ambiguity—where security, sovereignty, economy and climate ambition remain deeply entangled, but as yet far from operationally aligned.

Keywords: Natural gas trade; LNG; European energy scenarios; European energy security; RePowerEU (search for similar items in EconPapers)
JEL-codes: D40 D47 F15 F21 F50 F51 G13 H12 L60 L95 O25 O38 O52 Q34 Q35 Q41 Q47 Q48 Q54 (search for similar items in EconPapers)
Pages: 107 pages
Date: 2025-05-13
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:thk:wpaper:inetwp233

DOI: 10.36687/inetwp233

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