Russian gas exports play a crucial role in political discussions today. This paper argues that the European strive for energy diversification at present is economically inefficient, given the nearby resources and existing or committed transport network to Russia. Furthermore, this present diversification strategy will put Europe into competition with other consuming regions in the future, when the sources available for diversification turn dry. Hence, the current policy pursued by the EU faces a serious trade off of risking future supplies for present energy security (after all its questionable whether some of these sources are secure). We use the methodology based on the dynamics of gas reserves and path dependency in trade flows based on investment in pipeline infrastructure.
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