(Finance and Economics) "North Stream" pipeline was suddenly damaged, and Europe is getting colder this winter

  China News Agency, Beijing, September 28 (Liu Wenwen) Before winter officially comes, Europe is chilling due to energy shortages.

The bad news that the "North Stream" pipeline was damaged at three places made the energy crisis even worse.

  On the 26th local time, Danish media reported that a natural gas leak occurred near the "North Stream-2" natural gas pipeline.

Just one day apart, on the 27th, the "Beixi-1" natural gas pipeline was also exposed to two leaks.

  Since the Russian-Ukrainian conflict, the "North Stream" natural gas pipeline, which is the main energy artery in Europe, has attracted much attention.

Is it a natural disaster or a man-made disaster?

How does this affect European energy?

  Natural disaster or man-made disaster?

  In response to the accident, the "Beixi" natural gas pipeline company issued a statement saying that the three branches of the Beixi natural gas pipeline suffered "unprecedented" damage at the same time. reason.

  This rare accident has caused discussions and speculations in many countries: Is it a natural disaster or a man-made disaster?

  Swedish government officials said there was information that the Nord Stream gas pipeline leak may have been "sabotage".

  The head of the Danish Energy Agency said in a press release that leaks in natural gas pipelines are "extremely rare".

Danish Prime Minister Fraser Ricksen said the leak of the Nord Stream gas pipeline did not rule out the possibility of deliberate sabotage, but stressed that it was "too early to draw conclusions".

  Russian President's Press Secretary Peskov said that the state of emergency of the "North Stream" project concerns the energy security of the entire European continent, and Russia is extremely concerned about this.

It cannot be ruled out that the pipeline accident was caused by sabotage.

  The EU believes that it is too early to speculate on the cause of the Nord Stream-1 and Nord Stream-2 pipeline accidents.

The European Union is closely monitoring events and so far has not seen any impact on the security of gas supply in Europe from the pipeline accident.

  How important is "North Stream" to Europe?

  "Beixi-1" and "Beixi-2" are two parallel natural gas pipelines, with a total length of more than 1,000 kilometers, from Russia to Germany through the territorial waters of Finland, Sweden and Denmark.

As the "main artery" of European energy, the "North Stream" natural gas pipeline is related to the energy security of the entire European continent.

Data show that in 2021, the total amount of natural gas transported by "Beixi-1" will reach 59.2 billion cubic meters, accounting for nearly 40% of the EU's imports of Russian natural gas that year.

  "North Stream" pipeline was damaged, what impact will it have on Europe?

  There is a view that this event will lead to the complete failure of Europe's hopes of receiving Russian gas through Nord Stream-1 before winter.

There is no doubt that the accident will have an impact on the European economy, and as the market is worried about the shortage of natural gas supplies in Europe, it may lead to drastic changes in energy prices.

  Unsurprisingly, affected by the news of "North Stream", the Dutch TTF natural gas futures price, which is regarded as the wind vane of natural gas prices in Europe, once rose by 22% on the 27th. At the close, the increase was still as high as 19.65%, at 208 euros / MWh.

  Will the natural gas market spiral out of control?

Lin Boqiang, Dean of the China Energy Policy Research Institute of Xiamen University, analyzed to China News Agency that considering the recent suspension of "Beixi-1", "Beixi-2" has never been put into use, so it is expected that it will not have a great impact on the current market. .

But in the long run, if the conflict between Russia and Ukraine does not ease, the oil and gas connection between Russia and the EU will likely be "broken" in the future, so the impact on future expectations cannot be ignored.

  Winter is coming and Europe is 'sad'

  Right now, Europe's first cold snap is on its way.

The bad news of the destruction of the "North Stream" pipeline will undoubtedly bring another heavy blow to European energy.

The severe winter is coming, can Europe withstand the huge test of energy shortage?

  The research report of Huarong Rongda Futures Research Institute pointed out that if Russia cuts off its natural gas supply to Europe for a long time, its impact may vary.

The UK, Ireland, Spain, Portugal, Sweden and Denmark, which are less dependent on Russian gas, can accommodate such supply disruptions.

France, the Netherlands and Belgium are somewhat dependent on Russian gas, but they have access to LNG import capacity and alternative pipeline supply routes.

Germany and Italy, which are highly dependent on Russian gas, will experience a consumption gap of about 15%.

  At present, the European energy crisis has had a huge impact on people's lives. Some Europeans have begun to scramble for coal and logging for heating in order to survive the winter.

In addition, European industrial and agricultural production is also facing unprecedented difficulties and challenges.

Denmark's largest tomato producer has even announced that it will stop producing tomatoes and cucumbers this winter due to high fuel prices for greenhouse production.

  Meanwhile, high gas prices are pushing European manufacturers to turn to the United States.

  The Organisation for Economic Co-operation and Development (OECD) has warned that Europe's energy shortages could increase significantly if energy supplies from non-Russian sources fail to materialise as scheduled, or if demand for natural gas increases due to cold winters.

These shocks could reduce European economic growth by more than 1.25 percentage points from the baseline in 2023 and raise inflation by more than 1.5 percentage points, putting many European countries in recession in 2023.

  "This winter, Europe is destined to be 'sad'." Lin Boqiang said.