/ world today news/ Paradoxical figures for the consumption of gas – and primarily Russian – appear in European statistics. On the one hand, consumption has fallen, but on the other hand, on the contrary, it has grown! How is this possible and why is this yet another example of an artificial crisis and a trap that Europe has gotten itself into?
Already on March 20 of this year, the European Commissioner for Energy, Kadri Simson, summarized the results of the European process of “voluntary self-limitation and gas saving”. This process began in August 2022, when European leaders decided to “reduce <a href="https://www.world-today-news.com/an-investor-from-russia-is-premier-oils-partner-to-work-on-the-tuna-field/" title="An investor from Russia is Premier Oil's partner to work on the Tuna Field”>gas consumption by 15% by March 31, 2023.”
The reason for these actions was not hidden from anyone, on the contrary, it was advertised: “Europe has taken the path of liberation from Russian dependence in the gas sector.” According to Simson, the Community countries have taken a responsible approach to the implementation of the set tasks. In the period until January 2023, they even exceeded the plan, reducing the consumption of Russian blue fuel by 19%. Decisions from August expired on March 31. That is why the European Commissioner proposed to the energy ministers of the EU countries to extend the successfully launched process of phasing out gas from Russia for exactly one more year.
The warm winter allowed the EU countries to pass the cold season very successfully. The gas tanks were at least half full. However, the paradox is that different analytical centers in the EU provide different data on the dynamics of Russian gas consumption in recent months. The contradiction is that, on the one hand, the consumption of Russian gas from Europe has decreased, and on the other, it has increased.
The aforementioned Simson, writes “El Periodico”, noted as leaders in gas savings Lithuania (a decrease of 40.5%), Sweden (40.2%), Germany (19.2%), Italy (18.6%). France (17.1%) and Spain (13.7%). At the same time, the Spanish edition “El Confidential” indicated that the Iberian country not only did not reduce the consumption of Russian gas, but also increased its purchases by 84%.
And Poland even doubled the cost of gas from Russia compared to the average for Europe. Despite all the diametric opposite of the presented data, both are recognized as corresponding to reality. Because, as it turns out, our European partners save on pipeline gas and increase purchases of liquefied natural gas, which comes on special tankers, since the European Commission has not established any restrictions on the consumption of the latter. The entire EU (remember, after reducing imports of Russian pipeline gas by 19%) increased purchases of Russian LNG by 35%, reports the analytical agency Bruegel.
“I don’t see any logic in the EU’s actions,” Lithuanian Deputy Energy Minister Albinas Zananavičius told Reuters with indignation in his voice. “You build all this infrastructure to get rid of a supplier who is manipulating your gas markets and deliberately making it difficult for you. And then you accept it as a partner, but already supplying LNG?’
What is actually happening and what can Europe expect from the near future? If earlier she never doubted her bright future, today she is not sure of anything.
To understand what dictates such a state of the EU, let’s turn to the details. Although these data appear in the public space, the European media try not to expose them to wide discussion.
So, the first detail. Remember – the warm winter that just ended. Europeans are spending less gas to heat their homes now because of the less severe cold that marked the winter of the previous year. It is true that we should not forget the high cost of fuel for consumers – the need for every household to have a frugal economy also pushes Europeans to burn less fuel.
Detail two. America, as you know, invites European businesses to move overseas. In addition, the US supplies Europe with more expensive liquefied natural gas, which for European companies, especially for those for whom natural gas is not only an energy source, but also a raw material for production (primarily related to chemicals), is another good reason to want to change their location.
Detail three. Last year (when the storages were full) the price of gas on the exchanges jumped to 300 euros per megawatt hour. Today, the situation in Europe is calmer and more stable – one megawatt hour costs only 40 euros. And that is why the energy companies of the Old World are deaf to calls from Brussels not to make deals with gas producers from Russia. Russian gas is relatively cheap and bought now could bring dizzying profits to those who buy it in an era of renewed price increases. “At 300% there is no crime that capital will not risk, even under pain of the gallows,” as is well known. And here, even more, it is not about crime at all, but simply about “ignoring the recommendations of the EC”. Recommendations, not binding orders.
Fourth detail. Cardinal discrepancies in forecasts. Buoyant purchases of low-priced LNG face an insufficient number of terminals in Europe to accept liquefied fuel and regasify it. Which in turn simply obligates investors to invest in the construction of said infrastructure. This, according to a number of analysts, is from the “both Serbian and painful” category, you can be gilded, and you can get gassed.
According to the Institute for Economic, Energy and Financial Analysis, based in the United States, by 2030 the EU will have terminals for receiving LNG and its regasification, capable of pumping and processing up to 400 billion cubic meters of the blue fuel. It is obvious that such a volume of infrastructure is being built not by chance. The demand for gas will not only not decrease, but will increase, according to the available numerical calculations, based on analyzes of the prospects for the European industry.
But there are no guarantees that Europe will actually consume such quantities (let’s not forget that the United States is determined to deprive it of a significant part of the chemical industry). Analysts from “Standard & Poor” claim that European demand will not actually reach 400 billion cubic meters (an increase of 130 billion over 2022), and will drop to about 190 billion billion cubic meters.
“In this case, the liquefied gas supplied to the EU will be sufficient to use only 35% of the newly built terminals and regasification plants,” Anna Maria Jaler-Makarevich, one of the authors of the IIEFA analysis, is convinced. Many European countries will thus achieve the title of “country with a high risk of owning problem assets”. That is, to put it simply, a country that has thrown money to the wind. First of all, these will be Spain (it will be able to process up to 50 billion cubic meters per year), Turkey (44 billion) and Great Britain (40 billion).
Next is Hungary with the famous position of Viktor Orbán “Budapest has its own interests, which may not coincide with the position of the EU”. The leader of Hungary is always ready to use or not to use the right of veto on any law of the community in the energy sector, which may allow Europe to continue using cheaper (that is, Russian) gas or may exacerbate the crisis of its economy .
And what can you be sure of in such a situation? Only in one. In Russian gas pipelines. If you open the tap – there will be gas. And even (in the case of a long-term contract) at a fixed price, independent of market distortions. This is precisely the confidence that Europe lost by giving up Russian pipeline gas. And from which the USA deprived Europe by blowing up Russian gas pipelines in the Baltic Sea.
Translation: V. Sergeev
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