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EU agrees to gradually end Russian gas imports by January 1, 2028

10 points by geox 1y ago

ggm 1y ago
I'm not saying there's no deliberate delay in this, nor that the EU is entirely united in this. But to the 2028 date: Contracts for supply like this have penalty clauses, and the consequences for future gas contracts with any supply would be high if the termination did not respect international contract law. 2028 is only 2 and a bit years off, a multi-year contract is not implausible. Remember that Iranian banking assets and aircraft parts have been tied up in embargos for multiple decades. These kinds of things feel like "if I was king for a day..." solvable, but the awful reality of modern life means respect for contract matters, at least between most economies. There's a newer trend to act like the agreement has no force, because no force can be brought if you decide to tear it up. But that ignores the economic forces which come back into the room when you try to re-negotiate on favourable terms next time round. re-negotiate here, in the widest sense: Europe will be importing gas an oil products for a long time, worldwide. The nature of a supply contract and the capital investment in pipes, engines to process supply, pumping and distribution is a capital outlay which expects decades of recovery time on fee. If the Nordstream pipes don't get used, some bank is carrying debt. If future pipes need to be built, some bank expects to see a return on investment. I think 2028 is achievable. I wish they'd moved faster on this, and put some systems resilience into place back when the signals were clear. Obviously it's not like nothing has been happening the last 2 years, I just don't think it's been happening fast enough.
- mytailorisrich 1y ago
  This deadline only stands if the war has not ended by then. A lot of things can happen in 2 years.
  - ggm 1y ago
    It would be a shit winter for europe (bits of it) for sure. But for contracts, that would be "Force Majeure" and would be on Russia as the supplier in most cases. Absent actual war with europe, tearing up a contract? Thats sovereign risk territory. Next time you draw one up, expect a consequence. I'm probably blinding myself to the cases where Europe walks off things before a contractual deadline and so Europe incurs the consequences. I tend to think thats what this 2028 thing IS: avoidance of the commercial risk side.
- JumpCrisscross 1y ago
  > Contracts for supply like this have penalty clauses, and the consequences for future gas contracts with any supply would be high if the termination did not respect international contract law International contract law is soft law [1]. None of it permanently binds states, much less against belligerents. Europe's pussyfooting around matters of security is precisely what has left it vulnerable to exploitation by the Russian military and American and Chinese economies. If, in the future, Moscow stops being a pest, negotiations can include those past penalty clauses. If Moscow does not, the discussion is moot. (Similar outdated legalism plagues the EU moving at a snail's pace on seizing Russian assets as war reparations.) In the meantime, the status quo is America, China, Russia, India, Turkey, Israel and the Gulf States are acting the way great and emerging powers do in a multi-polar world: embrace sovereignty. (When Argentina is barred from the international markets, Europe can revisit contractual purism. In the meantime, indulging delusions of an enduring American unipolar rules-based international order is a unilateral cession of power and wealth.) [1] https://en.wikipedia.org/wiki/Soft_law https://en.wikipedia.org/wiki/Soft_law
  - drysine 1y ago
    >Moscow stops being a pest Quite dehumanizing, isn't it?
java-man 1y ago
I hope little Ukrainian drones will help expedite the EOL of those contracts...
- deleted 1y ago
  [deleted]
- rasz 1y ago
  drones or happy little accidents: Hungary https://apnews.com/article/hungary-oil-danube-refinery-fire-szazhalombatta-2571de4d3de341a7b7875e8cdda1b4f3 https://apnews.com/article/hungary-oil-danube-refinery-fire-... Romania https://ukranews.com/en/amp/news/1112511-explosion-at-lukoil-refinery-in-romania-media https://ukranews.com/en/amp/news/1112511-explosion-at-lukoil...
  - drysine 1y ago
    >drones or happy little accidents What would you call 9/11 then?

10 points by geox 1y ago

ggm 1y ago

I'm not saying there's no deliberate delay in this, nor that the EU is entirely united in this. But to the 2028 date: Contracts for supply like this have penalty clauses, and the consequences for future gas contracts with any supply would be high if the termination did not respect international contract law. 2028 is only 2 and a bit years off, a multi-year contract is not implausible. Remember that Iranian banking assets and aircraft parts have been tied up in embargos for multiple decades. These kinds of things feel like "if I was king for a day..." solvable, but the awful reality of modern life means respect for contract matters, at least between most economies. There's a newer trend to act like the agreement has no force, because no force can be brought if you decide to tear it up. But that ignores the economic forces which come back into the room when you try to re-negotiate on favourable terms next time round. re-negotiate here, in the widest sense: Europe will be importing gas an oil products for a long time, worldwide. The nature of a supply contract and the capital investment in pipes, engines to process supply, pumping and distribution is a capital outlay which expects decades of recovery time on fee. If the Nordstream pipes don't get used, some bank is carrying debt. If future pipes need to be built, some bank expects to see a return on investment. I think 2028 is achievable. I wish they'd moved faster on this, and put some systems resilience into place back when the signals were clear. Obviously it's not like nothing has been happening the last 2 years, I just don't think it's been happening fast enough.

mytailorisrich 1y ago
This deadline only stands if the war has not ended by then. A lot of things can happen in 2 years.
- ggm 1y ago
  It would be a shit winter for europe (bits of it) for sure. But for contracts, that would be "Force Majeure" and would be on Russia as the supplier in most cases. Absent actual war with europe, tearing up a contract? Thats sovereign risk territory. Next time you draw one up, expect a consequence. I'm probably blinding myself to the cases where Europe walks off things before a contractual deadline and so Europe incurs the consequences. I tend to think thats what this 2028 thing IS: avoidance of the commercial risk side.
JumpCrisscross 1y ago
> Contracts for supply like this have penalty clauses, and the consequences for future gas contracts with any supply would be high if the termination did not respect international contract law International contract law is soft law [1]. None of it permanently binds states, much less against belligerents. Europe's pussyfooting around matters of security is precisely what has left it vulnerable to exploitation by the Russian military and American and Chinese economies. If, in the future, Moscow stops being a pest, negotiations can include those past penalty clauses. If Moscow does not, the discussion is moot. (Similar outdated legalism plagues the EU moving at a snail's pace on seizing Russian assets as war reparations.) In the meantime, the status quo is America, China, Russia, India, Turkey, Israel and the Gulf States are acting the way great and emerging powers do in a multi-polar world: embrace sovereignty. (When Argentina is barred from the international markets, Europe can revisit contractual purism. In the meantime, indulging delusions of an enduring American unipolar rules-based international order is a unilateral cession of power and wealth.) [1] https://en.wikipedia.org/wiki/Soft_law https://en.wikipedia.org/wiki/Soft_law
- drysine 1y ago
  >Moscow stops being a pest Quite dehumanizing, isn't it?

java-man 1y ago

I hope little Ukrainian drones will help expedite the EOL of those contracts...

deleted 1y ago
[deleted]
rasz 1y ago
drones or happy little accidents: Hungary https://apnews.com/article/hungary-oil-danube-refinery-fire-szazhalombatta-2571de4d3de341a7b7875e8cdda1b4f3 https://apnews.com/article/hungary-oil-danube-refinery-fire-... Romania https://ukranews.com/en/amp/news/1112511-explosion-at-lukoil-refinery-in-romania-media https://ukranews.com/en/amp/news/1112511-explosion-at-lukoil...
- drysine 1y ago
  >drones or happy little accidents What would you call 9/11 then?