Russia is ready to further strengthen its position as Europe’s leading supplier.
The retired salt caves, aquifers, and fuel depots that house Europe’s stockpiles of natural gas have never been empty this time of winter.
Just four months after Amos Hochstein, the US special envoy for energy security, said Europe was not prepared enough for the coming cold season, the continent is grappling with a supply shortage that has left Europe with a shortage of supplies. Standard gas prices more than quadrupled last year. level five, squeeze businesses and households. The crisis has exposed the European Union to the weather and the wiles of Russian President Vladimir Putin, both of which are notoriously difficult to predict.
Maximo Miccinilli, head of energy and climate at EU consultants FleishmanHillard said: “The energy crisis has hit the bloc as supply security is off the menus of key decision makers. EU book. He expects the energy crisis to keep prices volatile and also cause further political tension between regulators in Brussels and the leaders of the bloc’s 27 member states.
Although the situation happened suddenly, it has been done for many years. Europe is in the midst of an energy transition, closing coal-fired power plants and increasing reliance on renewables. Wind and solar are cleaner but sometimes fickle, as illustrated by the sudden drop in turbine-generated electricity the continent recorded last year.
Moscow’s increased leverage over its neighbors became apparent at the end of last winter, an unusually long and cold spell that drained Europe’s as well as other economies’ gas reserves. The country’s economy is emerging from the recession caused by the pandemic. Over the summer, the state-controlled Gazprom PJSC began limiting flows to the continent, exacerbating shortages due to delayed maintenance at North Sea oil and gas fields and increasing its stake in a costly and long-delayed pipeline project championed by the Kremlin.
At the same time, countries from Japan to China are stepping up their imports of liquefied natural gas (LNG) to prepare for the coming winter. All of this leaves Europe struggling to replenish its dwindling stockpiles during the warm months, when gas is cheaper.
However, the European leaders betrayed no alarm. On July 14, the European Commission announced the world’s most ambitious package to phase out fossil fuels to avert the worst consequences of climate change. With their eyes trained on long-term goals, such as reducing greenhouse gas emissions by at least 55% by 2030 from 1990 levels, politicians have failed to appreciate some of the pitfalls. potential traps in sight on the decarbonization pathway.
Europe’s natural gas production has been declining for years, making the country more dependent on imports. Now, Russia is poised to further consolidate its position as the bloc’s top supplier. Gazprom and its European partners have invested $11 billion in Nord Stream 2, a 1,230 km (764 mi) pipeline that runs beneath the Baltic Sea from Russia to Germany.
Repeatedly delayed by US sanctions, the decade-long project encountered another setback this fall, when a new coalition government took power in Germany and the governing body The country’s energy regulator has halted final approval. The move continues to rock European energy markets, where gas prices have been breaking records day after day since July. In a televised address on December 24, Putin touted the benefits of the controversial pipeline, saying that “the additional volume of gas on the European market will certainly bring down prices right here.” place.”
The recent increase in LNG imports from the US has provided some relief, but at best temporary. France needs to bring some of its reactors offline for maintenance and repair, resulting in a 30% reduction in nuclear capacity by early January, while Germany is moving ahead with a plan to shut down all of its reactors. its nuclear plant. With the coldest two months of winter still ahead, there is concern that Europe could run out of gas.
Hosting sites are only 56% full, 15 percentage points below the 10-year average. Sebastian Bleschke, head of INES, the German association of hydrogen and gas storage system operators, said: “Over the years, since the record began, we have had a relative level of storage. low at this point. Researcher Wood Mackenzie Ltd. conditions.
With energy policy largely in the hands of member states, EU officials lack the authority to force national governments to replenish gas inventories more quickly. To make matters worse, Russia is building up its military on its border with Ukraine, a move that US intelligence sources say could spark an invasion. About a third of Russia’s gas flows to Europe via Ukraine, and although shipments were not disrupted during Russia’s 2014 annexation of Crimea, there is no guarantee that will remain the case if war breaks out. out this year.
Jason Bordoff, director of the Center for Global Energy Policy at Columbia University, said the energy situation limits the range of actions Western powers can take to counter Russian aggression. “The ability of Europe and the United States to respond to a Russian invasion is limited by a desire not to aggravate Europe’s energy crisis by sanctioning Russia’s energy exports and more broadly due to the threat that Russia could retaliate against any confrontation by restricting the flow of gas into Europe, as Russia did in 2006 and 2009, “Bordoff, former energy adviser and climate during the Obama administration, said.
Traders were bracing for the worst, with gas prices for delivery between spring and 2023 up about 40% in the past month. Some say the crisis could last until 2025, when the next wave of LNG projects in the US begins to feed the world market.
“It is difficult to see how good gas reserves are without more Russian exports through Nord Stream,” said Massimo Di-Odoardo, vice president of gas and LNG research at Wood Mackenzie. 2 or existing routes. “The year 2022 will be another tumultuous year for European gas prices.”
(Except for the title, this story has not been edited by NDTV staff and is published from an aggregated feed.)
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