Not just a European cold snap

In fact, the past year turned out to be somehow especially illustrative from the point of view of the European energy security, which is very topical recently.

And what is perhaps the most interesting thing here: the unusually cold winter that has already ended, thank God, highlighting the real problems, including those in the gas markets of Europe, turned out to be nothing more than, if you will, a kind of "litmus paper".

But nothing more.

The reasons for what is happening are rooted much deeper, and only the European (and not only European) cold weather that made the problem more prominent here, if we talk about the root causes, well, it has absolutely nothing to do with it.

See for yourself.

According to the European Commission's report on the European gas market released on Friday, the EU's own natural gas production in 2020 fell by 22.9%, to 54 billion cubic meters.

The reasons, in general, are clear, let us explain with a simple example.

For the first time in the vicinity of the Dutch Groningen field, which is system-forming for the European gas industry, discovered back in 1959 (commercial production since 1963), it significantly "shook" in December 1994: at first, an earthquake of 2.4 magnitude on the Richter scale was not even given special importance , and, as it turned out later, in vain.

After a while, the increased seismic activity in the very center of the European subcontinent, the authorities and developers represented by Royal Dutch Shell still could not help but notice and simply ignore.

Moreover.

Further studies have more than convincingly proved that the volumes of fuel obtained from - we repeat - a system-forming field for Europe will have to drop sharply in the coming years.

And this is connected, firstly, with the predatory development of existing deposits.

And secondly, with irreversible changes within the geological massif itself: and there is nothing surprising in the fact that in the hitherto calm European regions a real barrage of earthquakes has come: just to make it clear, their number in a relatively short historical period of time will soon exceed a thousand ( !), whether anyone likes it or not.

As a result, it was decided to gradually reduce hazardous production until it is completely halted in 2030.

To make it clear.

Over the past fifty-odd years, it is the gigantic - and not only by European standards - Groningen field that has been the basis for the prosperity of the Netherlands and the key to the energy security of the countries of northwestern Europe.

By the way, an interesting detail: the well-known (and so beloved in particular by Russian liberals) "Dutch disease" in the economy is connected with this deposit.

However, we are not talking about that now ...

But that's not all.

There are also problems with the development of deposits not only on the Dutch, but also on the Norwegian and Scottish shelves.

Moreover, they are connected not only with the high cost of the same Norwegian raw materials, known to all of Europe, purely in terms of cost: alas, but these reserves, like everything else in this world, are also, as they say, “finite”.

And despite all the heroic efforts of Norwegian geologists, who are really great (to carry out such work on the shelf, and even at such depths in arctic and subarctic conditions, believe me, is real heroism, as, in principle, we have in Yamal, and about this also do not forget), the newly discovered reserves by no means cover the already developed volumes.

And this, sorry, unfortunately, is an officially registered trend.

Nothing special, in this world everything ends at some point.

Alas.

And despite the fact that what is happening with European production did not become a sensation, moreover, Europe knew very well about the upcoming drop in its own natural gas production and prepared for this result ahead of time - the situation in the energy sector on the subcontinent is, frankly, extraordinary.

And it is by no means the European gas industry that is to blame, just one thing is superimposed on the other: what made, for example, the same Germany in a perverted form to rape its own coal and nuclear generation, I personally still cannot fully understand this.

Simply because there are no economic (and, by the way, environmental, for my taste) reasons for this process.

And there are only purely political ones.

Let Greta Thunberg understand, in short.

And those who are behind it.

Here something else is worse.

The very winter cold, which, it seems, this year, thank God, has ended, quite brightly highlighted one rather unpleasant tendency: in emergency situations, gas is often needed not only in Europe.

And the same LNG, which could cover the lost volumes, just did not really reach Europe, despite the very high spot prices: just for how much LNG the Europeans were willing to buy, this product was sold even more expensive in Southeast Asia ...

And this price for Europe, even from the point of view of the consumption structure, forgive me, with all the desire not to interrupt.

And despite the fact that the European Union last year was the third largest importer of liquefied natural gas after Japan and China, Europe turned out to be absolutely not ready to pay for LNG at the peaks of more than a thousand euros per thousand cubic meters.

And as a result - LNG in the "cold crisis" quite calmly went to the premium markets of Southeast Asia, we quote the same report of the European Commission: "LNG imports to the EU in the fourth quarter of 2020 fell by 27% compared to the same period last year from - for an increase in gas price markups on the wholesale Asian market compared to Europe, which led to the redirection of goods to Asian markets. "

And at the European spots, the same Russian natural gas raised from European underground gas storages was in full swing at this time: Gazprom made quite good money here, and it is somehow extremely stupid to even try to deny it.

The market is the market, you will excuse me, please, ladies and gentlemen.

Alas.

By the way, UGS facilities, as it turns out, are empty not only in Europe, but all over the world: and right now gas is being actively pumped into them all over the world.

Prices are going up again, and Europe is again finding it hard to chase after them: after all, the Europeans are used to receiving gas at the expense of their production and Russian - first of all - pipelines at, shall we say, much more attractive prices.

And if everything goes like it is now, it's better to forget about it altogether.

Moreover.

It is also worth remembering that in the past (and so far this year), the European economy, and therefore the energy sector, are in a state of real crisis, associated primarily with the COVID-19 pandemic.

But it must end anyway.

And then this - already more and more clear problem of gas shortage on European markets - will have to be somehow solved.

The point of view of the author may not coincide with the position of the editorial board.