"European consumers are paying": how the EU intends to cope with the energy crisis due to rising gas prices

The energy crisis is gaining momentum in Europe.

Insufficient filling of gas storage facilities and rising prices for hydrocarbons against the background of the approaching heating season are forcing Europeans to look for additional sources of fuel.

In particular, the Minister of Energy and Climate Policy of the Netherlands, Stef Block, announced his readiness to consider temporarily suspending the closure of Groningen, the largest gas field in the EU, said the observer of the specialized portal Oil Price Cyril Widdershoven.

Now it produces only 6.9 billion cubic meters of gas per year.

Earlier, the authorities set a goal to completely stop production by 2023 due to periodic seismic activity in the region caused by work at the field, the reserves of raw materials in which are estimated at 450 billion cubic meters.

According to experts, the factors of the energy hunger in Europe were the rise in prices due to the high demand for fuel in the Asian markets, the reduction in the supply of liquefied gas (LNG), the depletion of its own fields and the rise in the cost of CO2 emission quotas in the European environmental trading system (ETC) ...

This list also includes the ongoing transition of the EU to green energy, as well as manipulations with the third energy package.

In particular, they are trying to extend the action of the latter to the Nord Stream-2 gas pipeline, demanding that a company independent of Gazprom become its operator, and that 50% of the pipe's capacity should be allocated for reservation by other companies.

On September 17, Gazprom CEO Alexei Miller emphasized that the European Union will enter the autumn-winter season with a shortage of gas in storage facilities, and prices are likely to set new records.

“All experts in Europe and Asia say that this lag in pumping gas into underground storage facilities in Europe cannot be made up.

Europe will enter the autumn-winter period with a shortage of underground storage facilities.

The only question is with what volume? "- TASS quotes Miller's speech at the annual general meeting of the International Business Congress.

According to the head of Gazprom, a record amount of gas was withdrawn from the storage facilities last winter, and fuel injection in 2021 began three weeks later than usual.

Alexander Frolov, Deputy Director General of the Institute of National Energy, noted that the current situation in Europe was the result of its excessively tough energy strategy to regulate the work of energy markets, as well as Europe's hasty statements about the transition to the green path.

For this reason, the responsibility for the current gas crisis in the EU lies entirely with them, although none of the Europeans wants to admit this, said the interlocutor of RT.

“The authors of this strategy and its followers urged to believe in every possible way that the path they had chosen was absolutely correct, therefore, admitting at least some of their guilt in the events taking place also means that renewable energy is partly to blame for this.

One should not expect that at least one European official will say that Europe was wrong, ”Frolov said.

According to him, so far the attempts of European officials to reduce the EU's dependence on Russian gas supplies by increasing the share of renewable energy sources have not been crowned with success.

• Gas production in Groningen

• © REUTERS / Michael Kooren

In turn, the press secretary of the President of the Russian Federation Dmitry Peskov stressed that Russia, represented by Gazprom, fully complies with its obligations to supply fuel to Europe.

Moreover, the company is ready to even increase them if requested.

“Is it possible to take more gas from Gazprom and pump it in?

Can.

Gazprom is ready.

Moreover, he has already selected all additional applications.

Fully fulfills all its obligations.

No one has absolutely any complaints, and there cannot be.

Is Gazprom ready to conclude contracts further?

Gazprom is interested in this, ”said Peskov on the air of the Russia-1 TV channel.

Russia is to blame anyway

Despite this, the European Union prefers to blame Russia for its energy problems.

A number of MPs even called on the European Commission to launch an investigation into Gazprom, which allegedly manipulates the market and puts pressure on Europe.

And this despite the fact that on September 15 the company announced an increase in exports to non-CIS countries to 131.3 billion cubic meters in the period from January to August.

According to Gazprom, the increase in supplies took place in the direction of Turkey (by 173.6%), Germany (by 39.3%), Italy (by 15%), Romania (by 344%), Serbia (by 123.9% ), Poland (12%), Bulgaria (50.9%), Greece (15.8%) and Finland (22.7%).

In addition, Moscow was accused of undersupply of gas to Europe, which Sergei Komlev, head of the contract structuring and pricing department, called Gazprom Export absurd. 

According to Igor Yushkov, an expert at the Financial University under the Russian government, a leading analyst at the National Energy Security Fund, European politicians' attacks on Moscow on any occasion have already become traditional.

At the same time, he stated that the rise in prices was largely influenced by the departure of a significant part of LNG suppliers to Asia.

Alexander Frolov shares his opinion, stressing that it is difficult to blame the suppliers for this, since the Asian market is now most interesting for its readiness to buy gas at high prices.

“Europe faces the prospect of competing for LNG with the Asia-Pacific region, which is currently the most attractive in terms of the volume of gas requested and the price.

However, the EU countries do not have the ability to do this, although the entire infrastructure for receiving and storing liquefied gas is available, ”Frolov said.

At the same time, Igor Yushkov believes that representatives of European business may well influence politicians and urge them to return to normalizing relations with the Russian Federation in terms of further gas purchases.

“European politicians will continue to blame Russia for all the troubles.

But this criticism will continue from government officials, while criticism from gas companies has not and will not arise.

Businessmen will continue to advocate cooperation with Russia, because buying gas from Gazprom, they pay less than buying gas from the exchange or from LNG suppliers, ”the expert explained.

• Amur Gas Processing Plant, which is a Gazprom project

• © REUTERS / Maxim Shemetov

Overestimated the possibilities

The continuing high energy prices have already caused the closure of a number of large European enterprises.

In particular, two factories for the production of fertilizers of the American company CF Industries have suspended their work in Britain.

Following them, the Norwegian Yara, the second largest ammonia producer in the world, also announced a reduction in activity.

Later, the suspension of some workshops was announced at the Lithuanian plant Achema, the largest nitrogen fertilizer producer in the Baltic states.

According to Cyril Widdershoven, the energy crisis is widely discussed in the European Union, but the discussion does not go beyond the proposals for tax cuts.

At the same time, as follows from the data of the Association of Gas Infrastructure of Europe (GIE), gas storages are currently filled only by 73.5%, while last year during this period they were at around 94.8%.

In this regard, Russian analysts note that European officials, having set themselves an ambitious goal of switching to green energy, did not take into account the short-term consequences of such a decision.

“The rather strong green lobby in the EU is now making colossal efforts to discredit gas as a fuel.

These people are afraid that after giving up coal, gas will continue to be purchased.

They want all the fuel energy to go away and the transition to renewable energy to take place immediately, which is impossible even from a purely technical point of view, ”noted Igor Yushkov.

According to Alexander Frolov, gas prices on world markets in the near future will continue to hold the upper mark, and this situation will continue until supply exceeds demand.

“The situation is terrible not even because the prices are high, but because no conclusions are being made.

And as a result, European consumers pay for this policy, for whose wallets the green rate hits, ”the expert said.

The analyst expressed confidence that the EU will still have to come to an agreement with Gazprom and change its energy strategy to the current level of technology and technology development.

"Moreover, Russia is the only country that can provide supplies in large volumes, promptly and at an affordable price," Frolov summed up.