Want to blame foreigners for the European gas crisis

“NSUSSIA is about Now bear, it’s not about bullies. This week, Russia’s Deputy Foreign Minister Sergei Ryabkov joked about the crisis in the European natural gas market. He argued that his country favored stability and low prices over runaway prices.

Russia responds to the view of currency acquisition in the European capital that Gazprom, the state-owned energy goliath, the continent’s largest supplier, is agitating the continent’s energy crisis by refraining from exporting natural gas. .. European parliamentarians said Gazprom no more gas as a ploy to ensure final regulatory approval of the controversial Nord Stream 2 pipeline designed to transport Russian gas to Germany. Requests to investigate not transporting.

Cassandra makes it half right. Europe is certainly in an energy crisis. Natural gas prices have skyrocketed all over Europe lately. This caused a panic in the UK, and the government is currently considering providing subsidies and other state support to steel, chemicals and other heavy energy users. October 12 E.ON, The German energy company has taken extraordinary steps to suspend new gas supply contracts for home customers.

To make matters worse, the continent appears to be heading for a harsh winter with potential for serious gas and electricity shortages. Matt Drinkwater of Argus Media, an industry publisher, said official forecasters are concerned that the La Niña phenomenon could produce particularly severe winters not only in Northwestern Europe but also in Northeast Asia and North America. .. Global competition for energy.

Europe’s natural gas stores were well above the five-year average in early 2021, but were stored due to long winters and reduced production in Norway and the United Kingdom (partly due to pandemic-related obstacles). The quantity is currently at the level of concern. Edward Morse of Citigroup, an American bank, predicts that if this winter is really tough, those stores could disappear.

In the past, switching fuels was an option, but now it’s difficult. For example, green activities have hampered Europe’s nuclear program.James Hack Step NS&NS Research firm Global Platts Analytics said the region was “partially closed, making it difficult to return to coal-fired power plants, and the rest unattractive due to carbon policy.” And renewable energy is not yet a reliable alternative to gas, as revealed by recent painful episodes of light winds and depleted hydropower in parts of Europe.

It will be difficult to use less gas, at least in the short term. But is it possible for Europe to get more gas? One way is to bully Russia and try to export more. European Commission President Ursula von der Leyen recently praised Norway for supporting the gas crisis, but turned his finger on the Kremlin. “This doesn’t seem to be the case in Russia.” However, analysts believe that gas giants are actually exporting more gas to Europe this year than they were before the pandemic, and that their large continental customers have recently fulfilled their contractual obligations. confirmed. There is little solid evidence that Russia is a major contributor to Europe’s current gas crisis.

Another possible way to increase supply is to increase imports of liquefied natural gas (LNG) By ship. Over the last two decades, Europe’s strategy to reduce dependence on Gazprom has been LNG, Which now accounts for about 20% of the continent’s gas (not increasing from any of the decades ago). When the world gas market was well-supplied a few years ago, Europe had low gas prices due to access to surplus cargo. However, the combination of stagnant investment in new production and the sudden surge in global gas demand associated with the recovery of the global economy is LNG Recent.

There are those who justify it a little more in Europe and point to another foreign Boogeyman. “There is a tendency to blame China among European authorities,” Morse said. LNG Imports are skyrocketing in the Pacific region, with mainland imports jumping 25% recently. Freight from the United States and the Middle East is spurring European ports, fascinated by the high price premiums offered by Asian buyers. One advantage they have is explicit state support. In China, energy security concerns have led authorities to “at all costs” to ensure adequate winter supplies.

Other benefits they have explain Michael Stoppard IHS Research firm Markit states that most Asian gas is still sourced on long-term contracts related to oil prices. This is a practice that Europe has abandoned due to the liberalization of the gas market. Asian buyers are hedged, so they are less painful than European buyers who are fully exposed to today’s astronomical prices. Putin ridiculed Europe’s adoption of “market-based” pricing for gas as the Commission’s “smart alec” job for good reason, and Gazprom took the old-fashioned type of oil. It suggested that it was ready to be resurrected. Linked contract.

After all, foreign Boogeymen do not provide a satisfactory explanation for the European gas crisis. Controversial, but another plausible explanation was found near the house: the continent’s upside-down rush to decarbonize its energy system.Morse argues what European leaders are hiding the night before United NationsThe big climate summit in Scotland next month is the first crisis of energy transition. Being away from fossils and nuclear power and adopting renewable energies, the region does not adequately address the need for grid redundancy. America also has such a problem, but he states that it is energy and self-sufficient. Europe is far from it. ■■

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This article was published in the printed European section under the heading “Unpleasant Truth”.

Want to blame foreigners for the European gas crisis

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