"Russia is set to shut its key Nord Stream natural-gas pipeline on Wednesday for maintenance, leaving Europe guessing again about whether supplies will restart, as temperatures fall and demand for the fuel grows.
Whatever the outcome, European officials and energy executives say the continent faces years of high energy prices and possible shortages as efforts to replace Russian imports clash with limited supplies elsewhere and regulations that discourage hydrocarbon use.
Because of a drop in consumption this year, Europe is on track to secure enough gas to avoid outright rationing this winter. However, its governments are struggling to secure supplies for next year and beyond, despite wooing top producers from the likes of the U.S., Canada and Qatar.
Even if Nord Stream reopens on Saturday as promised by Russian gas giant Gazprom PJSC, few Western politicians and economists think Europe will receive enough Russian natural gas next year because of expectations that the economic war with Moscow will intensify.
Russia's Gazprom will reduce gas deliveries to Engie SA because of a dispute over contracts, the French multinational utility company said on Tuesday, without providing further details. Engie's deliveries of Russian gas, which normally account for about 17% of its yearly supply, has dropped to less than 4%, or a monthly level of 1.5 terawatt hours.
Pipeline gas from other regions besides Russia is flowing at full capacity, leaving the continent relying on liquefied natural gas from farther afield to offset the shortfall.
Many experts think it won't be enough, condemning Europe to years of high energy prices that will dent consumers' budgets, drive energy-intensive companies out of business, and deplete public coffers as governments seek to soften the blow on society.
Europe must brace for five to 10 years of hardship, said Alexander de Croo, the prime minister of Belgium, one of Europe's major LNG importers.
Faraway gas producers such as Qatar or the U.S. need at least two years to increase production to meet surging European demand. And because many European nations aim to cut fossil gas use in the long term, they have been reluctant to sign the long-term purchase contracts these producers insist on. Some gas-rich nations such as Canada can't boost production because of their own climate-change legislation limiting carbon-dioxide emissions, including a ban on new production in Quebec, which sits on vast reserves.
In the short term, Europeans have acquired LNG on the spot market to meet gas shortages, mostly from Asian buyers who signed flexible long-term deals with U.S. exporters and have rerouted cargoes to Europe, where gas prices have soared. Benchmark European gas prices hit $100 per million British thermal units last week, before settling at $79.92 on Monday. European natural-gas futures fell Tuesday as the European Union appeared on the cusp of filling its gas storage to sufficient levels to last through winter, and leaders said they would take measures to ease the continent's energy crisis.
"For the past six months, Europe has become the demand center," said James Huckstepp, a gas analyst at S&P Global Commodity Insights.
While Europe looks unlikely to run out of gas in the immediate future, economists and many politicians fear current energy prices will test the region's political stability and economic resilience if they hold at current levels.
Helen Thompson, professor of political economy at Cambridge University, said the shock reflects how Europe's dependence on Russian energy became entrenched over decades.
"It's not like these difficulties suddenly appeared, it's just that Western politicians now scrambling for non-Russian energy sources find they are either in short supply, like LNG, or hard to come by, like oil," she said.
EU nations are discussing proposals to cap electricity prices across the bloc. Some are also reconsidering years of environmental legislation to shut down nuclear power plants and reducing the use of fuels such as oil and coal.
Germany has said it would restart idled coal-powered electricity plants this winter to free up gas and is reviewing a decision to shut down its last three nuclear plants at the end of 2022.
It isn't yet dropping laws mandating an end to fossil fuel use beyond around 2040, however, complicating its bid to secure LNG from Qatar, which insists on multidecade contracts.
Because of this, Germany could struggle after the winter to refill its gas stores, now almost 80% full, said Sigmar Gabriel, a former German economy minister.
Since the outbreak of the sanctions on Russia, only one German utility, EnBW Energie Baden-Wurttemberg AG, has signed a long-term LNG deal, with U.S. firm Venture Global LNG Inc. A spokeswoman for EnBW said that the company, which like most German importers had been using Russian gas, was refocusing on LNG.” [1]
If you want to pay for energy, you have to earn more. Since this is impossible in Lithuania, you have to move to other countries.
1. World News: Key Pipeline to Shut for Maintenance
Pancevski, Bojan.
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 31 Aug 2022: A.6.
Komentarų nėra:
Rašyti komentarą