The EU’s Natural Gas Conundrum

The coming winter looks to be a difficult one in Central and Northern Europe due an acute shortage of natural gas. The only feasible solution would be for the EU to scrap its sanctions against Russia, but that’s unlikely to happen. I don’t think the continent has enough idled coal-fired power plants that could be restarted on short notice to make up the deficit.

Many thanks to Hellequin GB for translating this article from Anti-Spiegel. The translator’s comments are in square brackets:

As reported in Russia about the worsening of the gas crisis

Europe has a home-grown gas problem as Western sanctions prevent maintenance of Nord Stream 1, causing gas supplies from Russia to fall by half.

German media blame Russia for the sharp drop in gas supplies via Nord Stream 1, and Economics Minister Habeck alleges political calculations. With this, Habeck and the German media are lying to the Germans, because the first reports about the decline in gas supplies, for example, Der Spiegel, clearly said that there was a simple reason for the decline: Siemens, which is responsible for the maintenance of the turbines of the pipeline, cannot bring the turbines back to Russia after their overhaul due to Western sanctions. I reported about it; more details may be found here.

But of course the German public shouldn’t know that this gas supply problem was also created by the West itself, so you just lie to the people and simply blame Russia. This was also the subject of the weekly news review on Russian TV, and I have translated the Russian report.

Start of translation:

Europe is trying in panic to circumvent the sanctions

Gas prices on the European exchanges have again exceeded the mark of $1,500 per thousand cubic meters. The surge began after Gazprom reduced its deliveries through Nord Stream 1 to Europe to 67 from 167 million cubic meters per day. There is an objective reason for this. There is no Russian malice in it. Siemens, a German company that has a maintenance contract with Russia, has sent the turbine to Canada for a major overhaul. But now they say they can’t return the turbine because of anti-Russian sanctions. Germany and Canada are now negotiating the return of the Nord Stream equipment. So far they are stuck in a dead end. In Europe, meanwhile, reserves for the winter are already being withdrawn from gas storage facilities. There is panic.

Our correspondent reports from Germany.

As has been shown, the sanctions have a life of their own and multiply spontaneously. A few weeks ago, after euphoria over the adoption of the sixth package of sanctions, Europe announced the seventh package, which could theoretically include some form of gas embargo. This step has to be taken responsibly — stocking up for the winter and finding new suppliers for the future, but there is a ban on supplies of equipment for the Russian gas industry — and lo and behold, dreams come true. Sometimes out of the blue.

“Due to the expiration of the overhaul interval, in accordance with the Rostekhnadzor regulation and taking into account the technical condition of the turbine, Gazprom will stop operating another Siemens gas turbine engine at the Portovaya pumping station,” Gazprom said.

Portovaya is pumping gas through the Nord Stream 1 pipeline. According to the Bundesnetzagentur [Federal Network Agency], the shutdown of the worn-out turbine has resulted in a 40 percent reduction in gas transit, and according to Gazprom by as much as 60 percent. Germany has been forced to halt gas supplies to French customers altogether, and supplies to Italy have fallen by a third. Isn’t that already the seventh package? It’s a legitimate question how it happened that Gazprom didn’t have a replacement. It’s simply because Siemens has yet to get another aggregate back after its overhaul in Montreal — Canadian authorities seized it under the Sanctions Act of June 8 of this year.

“Siemens has also confirmed that there is a delivery from Canada that has not yet arrived, but whether there is a causal connection between this gas turbine and the many delivery failures cannot be verified,” says Beate Baron, a spokeswoman for the German Ministry of Economic Affairs.

In fact, everything is verifiable. She could, if she wanted to, call Siemens and ask about the performance characteristics of its turbines and compare them to the amount of gas received, but she doesn’t want to, because as a result there’s a 100% chance she would find out that she has herself to blame. And then she could no longer blame Russia for the problems of the coming heating season. 90 percent filling of gas storage tanks by November 1 — it is assumed that this level of filling of underground storage facilities will allow the country to survive the winter normally, but instead of pumping gas into the storage tanks, from Saturday they started pumping it out, which obviously violates this schedule.

“We can’t go into winter when the gas storage tanks are 56 percent full, they have to be full or we really aren’t ready for winter. We should have no illusions, we are fighting Putin. My appeal to everyone, to the public and to industry, is: save energy,” said German Economics Minister Robert Habeck.

Boiling eggs in the dishwasher, not dawdling in the shower, turning off the heat in unused rooms — all these recipes are familiar. And they would be good if there weren’t a risk of salmonella poisoning and growing mold in the home, which would end up being even more expensive, even if the Federal Network Agency warns that the bills at the end of the year could come as a nasty surprise for tenants and landlords alike which could force the agency to lower the temperature centrally in the second half of winter, without regard to residents’ wishes.

That’s almost inevitable, but Bloomberg is preparing its readers for the looming possibility of something far worse: “In the worst-case scenario, if Nord Stream were to shut down completely for Germany, Europe would not meet the European Union-mandated stock levels by the start of the winter heating season in November. And by January, reserves in the region might be completely depleted.”

Gas prices, especially for industry, would then be exorbitant and inflation would be in double digits. For the third month in a row, it broke the record of older crises in Germany: it is now 7.9 percent, which was the level in 1974. Following the news about the reduction in gas shipments, gas prices rose from $900 to $1,350 per thousand cubic meters. This is despite the fact that the market has not yet priced in, over the last week, the news that the Turkish-Stream pipeline is scheduled to be shut down for maintenance on June 21. For the time being, it is to be switched off for a week, but nothing is certain at the moment. The problem for the EU is compounded by the fact that the other suppliers are also not doing well, to say the least,

According to preliminary calculations, the fire in the US liquefaction plant in Freeport means a minus of five billion cubic meters in the European energy mix. The export terminal, which handles a quarter of all US LNG shipments to the European market, has been out of service for three months.

It is also not clear when gas supplies from Qatar will start. A preliminary agreement between Berlin and Doha will probably only become a reality if the Europeans comply with Qatar’s wish for a 20-year agreement that does not fit with the German government’s environmental goals. So you have to scrape together every cubic meter you can get.

“I am grateful that we are now talking about this great project, that you are ready to increase gas supplies to the European Union via Egypt,” said European Commission President Ursula von der Leyen.

The President of the European Commission traveled to Israel this week because there is gas under the Promised Land that could be delivered to Europe, but not immediately — a pipeline to Egypt’s LNG terminals must first be built. But there is not much fuel there: proven reserves are around 650 billion cubic meters and the region is politically unstable. The newspaper Die Welt summarizes all the efforts of European politicians to find an adequate replacement for Russian gas and comes to the disappointing conclusion: “Germany has the largest natural gas storage facilities in Europe. However, these underground tanks can only be filled to the required 90 percent level by November 1 by deliveries via Russian pipelines.”

In principle, the problem could be solved with a push of a button that starts Nord Stream 2. The turbines there are brand new and not imported, but rather Russian Ladoga turbines. But they are not yet ready for such a radical step that violates their own sanctions. They call Canada every day now — sometimes asking, sometimes demanding — that Canada give them the turbines back. [Maybe if they present Trudeau with a Lederhosen set, along with a Tyrolean hat, so that he can play dress-up when he is visiting Germany next, he will relent and send those turbines back.]

But even if the Germans managed to convince the Canadians, the loss of face would be enormous, because that would also circumvent the sanctions. As it turns out, each of them has its own price. Run out of gas or lose face — Europe is likely to choose the latter. [Obviously, these politicians believe that they will not lose anything that way, because they have their full allowances, paid for by the taxpayer, and won’t freeze to death.]

End of translation

Afterword from our German translator:

This conflict with Russia should wake up people to the insanity of being dependant GLOBALLY on others for almost everything. Anyone who believes that this could be solved by a One World Government should think again, because then they would be at the mercy of a bunch of people who do not know the meaning of mercy or compassion for anyone except themselves.

“Happiness belongs to the self sufficient.” — Aristotle

10 thoughts on “The EU’s Natural Gas Conundrum

  1. “This conflict with Russia should wake up people to the insanity of being dependant GLOBALLY on others for almost everything.”

    Exactly this… Europe is as dependent on Russian gas today, as it was on Arab oil in the 1970s. Because of such monopolies of supply, it’s easy to exert political pressure. The gas supply should become spread over several providers, with plenty of spare capacity.

    But that’s not how Russia wishes it to be, and it’s been making a lot of effort to make sure gas from the likes of Kazakhstan and Turkmenistan can only come via Russia.

    Which is why the discovery of large gas reserves in Ukraine’s Donbas region around 2010 could be problematic to Russia: Ukraine had the infrastructure to export to Europe, without using Russia. As the video below explains.

    • European energy problems are of their own making.

      They are dependent on Russia precisely because support for Green parties ensured that policies to produce energy from nuclear (like in France) or to use plentiful German coal in clean coal fired plants, or to frack for oil and gas on one’s own soil never came to fruition. Instead, hare-brained schemes such as solar or wind were pursued while perfectly good nuclear and coal plants were shuttered and the difference made up with cheap Russian gas. This was done even though it was perfectly well known by the EU elites that reliance on Russian energy meant that Putin had them firmly by the testicles and could inflict serious hurt anytime he felt like yanking. They can’t now give the excuse that “if only Ukraine had been allowed to build pipelines in defiance of Putin” , or “if Putin hadn’t been so fiendishly clever in subverting and co-opting fellow Central Asian leaders to only transport their gas through his pipelines” that they wouldn’t be in this mess.

      All the hand wringing and recriminations doesn’t change the fact that the EU elites chose this path because they were giving lip service to the Greens while keeping their populace and industry pacified with cheap Russian gas. They thought they could control Putin and hamstring him at will with the same tools they used so successfully to ban rivals from Twatter & Farcebook and failed to realize they were up against a rival far out of their league who happened to be far more clever and resourceful than the packs of fools they were used to running with.

      For their abject stupidity and short-sightedness Europeans in general and Germans in particular deserve whatever consequences come from this. The destruction of German industry, collapse of the EU and NATO, heating and energy costs many multiples of the present sky-high costs, military impotence, and forever being stuck with the blame as the proximate cause of the destruction of the petrodollar and creation of a multipolar world with Russia and China calling all the shots deserve to be laid at their feet. In case you haven’t looked up to see the forest for the trees, this is no longer about Ukraine if indeed it ever was.

      • Well failure to build more nuclear power, or extract shale gas, or carry on using coal was undoubtedly massive stupidity, inspired by the likes of Greenpeace and Greta Thunberg, and which for some reason ended up influencing policy.

        But, say, in Germany, mainland Europe’s biggest gas consumer, the gas consumption looks like this:

        “In 2021, buildings (residential, services, and agriculture) accounted for 44% of the gas consumption; this is trailed by the industrial (30%) and power sectors (21%).”

        So the Green stupidity (mainly in power sector) still accounts for only up to 21% of consumption.

        The main factor is still that mainland Europe is still, to a ridiculous extent, reliant on gas coming from, or through, Russia.

    • Because with the loss of the Freeport LNG operation, American gas is partially stranded. Sabine Pass and other facilities are still running, but the drawdown rate of US reserves dropped by enough to pull the spot price down

  2. Another “world” conflict in the offing with a bunch of femme fools
    and emasculated hem giggling and clucking. Jesus look at that degenerate Johnson and the lady in pink. One would think Joe Biden old enough to have a vague memory. Women will at last have their opportunity to prove themselves on the battlefield. No running and comforting this time. Nukes take everyone out.

  3. “This conflict with Russia should wake up people to the insanity of being dependant GLOBALLY on others for almost everything.”

    Yeah well, to be honest, it was a trap and it’s about to clap. The Powers that Be decided to cut the West off of energy, and it looks like it’s gonna happen this winter.

    If Europe will be forced to live out the winter with reduced heating, then we will see for sure how many “immuno-compromised” people there are in Europe. But that might just be the plan. Retirement funds are empty, and the only way to equal out the equation is to kill old people.

    Here’s just some comment from Zero Hedge…

    Shell CEO van Beurden: spare capacity is running very, very low.

    1- Global oil spare production capacity including OPEC+’s is running very low. This won’t only keep the market on edge but will also send crude oil prices on a steep upward trajectory with Brent crude hitting $130-$140 soon.

    2 – OPEC+ can no longer keep the world guessing about its spare capacity because there is currently none. Saudi Arabia and UAE have reached the end of their tether of giving the impression that they have any spare capacity because they don’t.

    3 – There is no global spare refining capacity either. The refining industry lost around 3 mbd of processing capacity in the wake of the pandemic and the crash in demand in 2020.

    4 – It will be impossible for LNG to replace all Russian pipeline gas

    Authorities in Warsaw have allowed citizens to forage for firewood in forests to keep their homes heated amid spiralling energy costs. Poland is in the midst of a coal shortage after banning Russian imports.

    • The Poles have all of Silesia with it’s coal ridden areas that can be mined in a half a heart beat, so I don’t understand why you believe that nonsense?

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