Europe also has the ability to make much greater use of its LNG import facilities. Due to falling gas demand in Europe and surging demand in Asia, these facilities have been operating at just 25% capacity as LNG cargoes have gone elsewhere. But mild weather, growing stockpiles and the prospect of a return for nuclear power mean that Asian demand has fallen, taking the spot price of LNG in the region to a three-year low of less than $11 per million British thermal units. At that price, internationally traded LNG cargoes can compete against Russian pipeline gas. If LNG utilisation levels reached their historic high of 70%, and if Europe were willing to pay the associated price, it could displace two thirds of its imports of Russian gas. If the U.S. starts to export a significant proportion of its abundant gas supplies, then the prospects for LNG in Europe become better still.
In the long term, the surest route to greater energy security is for Europe to develop its own lower-cost resources and to consume less of them. The continent already leads the way when it comes to renewable energy, which has made significant inroads in the power sector. Thanks to generous government subsidies, renewable sources now account for more than 20% of electricity generation, taking gas demand down to levels last seen in 2002. If those gains are to be sustainable, and if renewable energy is to exist without subsidies in the future, governments must now spend less money supporting the production of renewable energy and more on R&D to bring down the cost of renewable energy technologies.