Media: Europe could be without gas in two months

Europe could run out of gas in the next two months due to frost and low gas supplies, Bloomberg reports.

“The energy crisis hit a bloc member when security of supply was not on the agenda of EU policymakers,” said Maxim Machinili, head of energy and climate at FleishmanHillard EU, a consultant. He expects that the energy crisis will keep prices volatile and will also lead to more political tensions between Brussels regulators and the leaders of the bloc’s 27 member states.

Although the situation has suddenly deteriorated, it has been going on for years. Europe is in the midst of an energy transition, shutting down coal-fired power stations and increasing its dependence on renewable energy sources. Wind and solar energy are cleaner, but sometimes volatile, as evidenced by the sudden drop in turbine-generated power on the continent last year.

Moscow’s influence over its neighbors became apparent at the end of last winter, which was unusually cold and prolonged, shattering Europe’s gas supplies just as its economy emerged from the recession caused by the pandemic. In the summer, state-controlled Gazprom PJSC began restricting gas flows to the continent, exacerbating the deficit caused by the delayed maintenance of oil and gas fields in the North Sea and raising rates on an expensive and long-delayed pipeline project advocated by the Kremlin.

Gas storage capacity is only 56% full, more than 15 percentage points below the 10-year average. “In none of the last years since the start of the inventory have we had a relatively low level of storage,” says Sebastian Bleške, head of INES, the German association for gas and hydrogen storage system operators. With the two coldest winter months ahead, there are fears that Europe may run out of gas.

As energy policy is largely in the hands of the Member States, EU officials lack the power to force national governments to replenish gas supplies more quickly. The situation is exacerbated by Russia’s troops on the border with Ukraine, and U.S. intelligence sources indicate a possible invasion. About a third of Russia’s gas flows to Europe pass through Ukraine, and although shipments were not disrupted during Russia’s annexation of Crimea in 2014, there is no guarantee that war will continue this year.

The energy situation limits the amount of action that Western powers can take to combat Russian aggression, says Jason Bordoff, director of the Columbia University’s Global Energy Policy Center. “The ability of Europe and the United States to respond to the Russian invasion is limited both by the desire not to exacerbate the European energy crisis by imposing sanctions on Russian energy exports and, more broadly, by the threat of Russia retaliating against any confrontation by restricting gas flows. In Europe, as Russia did in 2006 and 2009, ”says Bordeaux, a former energy and climate adviser to the Obama administration.

Traders are already preparing for the worst, with prices for gas supplied between spring and 2023 rising by about 40% in the last month. Some say the crisis could last until 2025, when the next wave of LNG projects in the US will start supplying the world market.