Consequences of war: Is natural gas the new oil?

6 min readJun 6, 2023


Waging on for over a year now, the war between Russia and Ukraine continues with shows of support from across the globe. While the Kremlin’s decisions have been met with approval by the likes of Belarus, Iran, Syria, North Korea, and Eritrea, countries like the USA, Germany, and Poland have drawn lines in the sand by providing tanks to the much beleaguered Ukraine. The European Court of Human Rights has permitted cases brought against Russia by the Netherlands and Ukraine concerning the alleged violation of human rights in Luhansk and Donetsk. Along these lines, further attempts to punish Russia for its actions against Ukraine have emerged in the form of sanctions.

Sanctions to cripple Russia’s economy appear across the spectrum, from asset freezes on the Russian Central Bank to the cutting off of major Russian banks from SWIFT to private sector multinationals like Apple disengaging from Russia.

In March 2022, the US banned all oil, gas, and coal imports from Russia. As of December 2022, crude oil may not be imported from Russia to the EU with the ban on refined petroleum products coming into effect from February 2023. Coal and other solid fossil fuels are also prohibited from being imported.

On 2 December 2022, the Price Cap Coalition, made up of the G7 and Australia, decided on a maximum price of 60 USD per barrel for seaborne Russian-origin crude oil. This consensus was reached to prevent Russia from profiting from its aggressions against Ukraine and to provide support in stabilising the global energy markets.


With Russian oil becoming an inaccessible commodity to the Western world, what impact will that have on natural gas?

Can natural gas replace oil?

Frequently referred to as a bridge fuel, liquefied natural gas (LNG) is considered to be the transition between “dirty” fossil fuels (oil and coal) and sources of renewable energy. LNG is the cleanest fossil fuel, with far fewer carbon emissions and a lower sulphur content than oil or coal. The following graph shows a comparison between natural gas and marine gas oil (MGO), marine diesel oil (MDO), and heavy fuel oil (HFO):


However, concern was voiced over the amount of methane leaking from natural gas facilities. Methane is one of the most powerful greenhouse gases with over 80 times the effect that carbon dioxide has on global warming over a 20-year period.

Several methane abatement strategies exist and could be put into practice to feasibly reduce methane emissions from landfills and dumpsites by 80% by 2030. The implementation of extensive methane monitoring and measurement technologies is essential to the success of these strategies. Existing landfills throughout the world that are under-functioning or poorly-managed can be rehabilitated or converted into sanitary landfills that utilise advanced monitoring technology that will allow for increased accuracy in methane capture. Through concentrated policy requiring employment of best practices at these facilities, effective methane reduction and capture can be achieved.

Efforts are also being taken to reduce emissions in extractive industries by means of gas pipe repairs, installation of methane-capturing technology for sale or later use, and methane fees that are built off existing business taxes.

Europe’s call for gas

The EU imported 83% of its natural gas in 2021 from a variety of sources throughout the globe and consumed 412 billion cubic metres (bcm). Before the war, it imported 40% of its natural gas from Russia. Now, pipeline gas and LNG import from Russia represent less than a quarter of EU gas imports. As a result of Russia’s actions against Ukraine, Europe looked to diversify its cache of gas suppliers. There was a marked difference in imports from the US, with an increase to 50 bcm from half that in the previous year.


Tapping into gas-rich resources

Having had to decrease its gas imports from Russia, Europe turned to other suppliers, such as North America, East Africa, Qatar, and Australia. This also led to the diversification of gas supply routes. One such endeavour was the opening of the Southern Gas Corridor which conveys gas from the Caspian Basin to the countries of Southeast Europe via pipeline infrastructure. With expansions on the Corridor planned, the goal is for 20 bcm to be imported to Europe annually by 2027, double the current delivery. The infrastructure projects needed for this have been maintained on the EU’s fourth list of Projects of Common Interest (PCI).

One of the areas covered by PCI is smart gas grids — a bid to reach the EU’s energy and climate goals. At the moment, four projects are under consultation for 2023: installation of hydrogen-ready chromatographs in 11 locations in Hungary; Smartswitch project (Greek section); Smartswitch project (Bulgarian section); and a flexible grid for Danish renewable gases. The main beneficial effects of these projects include:

· Access to environmentally friendly energy carrier (H2) as part of a hydrogen-gas mixture for all market participants;

· Reduction of greenhouse gas emissions;

· Achieving a gradual decarbonisation of the energy sector and the economy, and providing conditions to boost the competitiveness of the industry.

With the hydrogen demand growth projected by the International Renewable Energy Agency (IRENA), it’s little wonder that sights have been set beyond natural gas:


Going a step further than natural gas

While there is a definite weaning of Europe from the need for oil, dependence on natural gas is not the end goal. Hydrogen is the new buzzword, with it possibly playing a key role in the decarbonisation of the global energy system and serving as a complement to renewables. With the goal of reaching net zero by 2050, hydrogen has become a vital agent in achieving this target through stronger demand growth and cleaner technology initiatives for its production. On this path, hydrogen and hydrogen-based fuels can avoid 60 Gigatonnes of CO2 emissions between now and 2050–6% of total cumulative emissions reductions.


Japan stands at the helm of this hydrogen revolution, due in part to goals set by the Japanese government aiming for carbon neutrality; in 2017, Japan became the first country in the world to adopt a national hydrogen framework. Through this strategy, Japan has implemented a comprehensive plan to establish a full-scale hydrogen supply chain to cut the cost of hydrogen by 2030.

As a Japanese company that has a vision to revolutionise the energy industry through the digitalization of plant engineering, we at PlantStream have had the opportunity to work with other Japan-based companies who are at the forefront of this transition to hydrogen.

Through their “Hydrogen Road” plan, PlantStream client Kawasaki Heavy Industries is implementing a shift to hydrogen energy in production, transportation, storage, and utilisation processes. Similarly, using SPERA Hydrogen ™, Chiyoda Corporation utilises the liquid organic hydrogen carrier (LOHC) method to facilitate the creation of an international hydrogen supply chain.

So, to answer the question “Is natural gas the new oil?” — for now, yes. But given the predictions for the future and the increasing demands for greenhouse gas emissions reductions, investing in hydrogen technology as Japan has done may be the way to go.




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