This raises the question: How will Europe, which imports most of its energy, survive the winter without a gas disaster, especially if the winter turns out to be colder or longer than usual?
Europe's natural gas crisis is not being resolved. Stocks are low, prices are high and consumers are facing expensive bills. The big Russian gas industry company, "Gazprom", is not selling gas like before.
This raises the question: How will Europe, which imports most of its energy, survive the winter without a gas disaster, especially if the winter turns out to be colder or longer than usual?
Here's how the European Union, home to 447 million people, will try to deal with the crisis:
Small gas reserves
The problem lies in the small gas reserves. Utilities that supply gas to the community use underground gas reserves to meet unexpected demands for gas for heating or electricity. Europe has started 2021 with only 56% gas reserves, compared to 73% the previous year.
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The reasons are varied: the cold weather last winter, the lack of Russian shipments in the market and the high demand in Asia for liquid natural gas carried by ships. The European Pipeline Operators Association says the cold weather would mean the need to import 5% to 10% more gas than the peak volumes seen in recent years to avoid the risk of shutdowns.
Increase in prices
As a result, gas prices have risen: the standard price of gas in Europe is around 80 euros per Megawatt hour, four times higher than the 19 euros price it was at the beginning of 2021. Prices have fallen nine times over the price at the beginning of last year and this is shocking and alarming consumers and politicians.
High prices in Europe are attracting more suppliers. Analysts at Rystad Energy used vessel tracking data last month and saw 11 tankers bringing liquefied natural gas to Asia making unnecessary detours across the ocean in order to take advantage of lucrative sales. in Europe.
The Lakhta Center, an 87-story skyscraper, is the headquarters of the Russian gas monopoly Gazprom in St. Petersburg
With prices so high, traders were incentivized to divert cargo to Europe even if they had to offer 100% of the price as compensation, say analysts at data company Energy Intelligence.
"I wouldn't say that liquefied natural gas is 100% sufficient, but it will play a very important role" in solving Europe's energy problem, said Xi Nan, head of the liquefied natural gas market at Rystad.
Insufficient supply of gas from Russia
Russia has not sent enough gas. State-owned Gazprom has sold less gas and has not met Europe's reserves as usual, but Russian officials have stressed that the company has fulfilled its supply obligations under long-term contracts.
Analysts believe that Russia may be emphasizing its desire for Europe to approve the Nord Stream 2 gas pipeline that reaches Germany. Also, tensions have increased due to the deployment of Russian soldiers near the border of Ukraine.
The EU's antitrust chief said on Thursday that Gazprom's supply restrictions were thought to be "provocative" and demanded an explanation from the company and other suppliers. Commissioner Margarethe Vestager has described the behavior of the "Gazprom" company as "rare behavior in the market".
The solution is a mild winter
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The weather in Europe and Asia has so far been relatively mild, more liquefied natural gas is coming in and high prices have forced industries to use less gas, cutting production. Meanwhile, Norway, which is one of Europe's suppliers, has increased the supply of more pipeline gas.
"That means we can get through this winter with Russian supplies as low as they are," said James Huckstepp, manager of Europe, Middle East and Africa gas analytics at energy firm S&P Global Platts.
A worker at the Ukrainian gas station, Volovets in Western Ukraine
"I cannot say that the crisis has passed, because there is still the risk of low temperatures and there is very little storage space." If there is an unexpected blockage, "we could use the extreme scenario by making forced gas cuts, starting with industries, but eventually consumers would also be at risk," Huckstepp said.
As a short-term solution, European governments are looking at providing consumer subsidies to alleviate the situation.
The long-term solution is to invest in renewable resources such as wind and sunlight. However, officials acknowledge that gas will play a role for years during this change.
Political influence
Political unrest in Kazakhstan is not helping. The resource-rich Central Asian nation supplies the EU with oil - but not gas - and oil's behavior was not affected by the violent protests that began over rising fuel prices, but these protests were dispersed quickly reflecting deep discontent about Kazakhstan's authoritarian government.
The last alternative
If all else fails, EU legislation has required states to help each other in the event of gas shortages. Governments can declare a gas emergency and cut off supplies to industrial customers to spare households, hurting the economy but avoiding a human and political disaster.
In theory, states can request cross-border gas supplies from each other. In recent years, Europe has built more pipelines, but not enough to cover the entire continent, leaving some countries more exposed than others. However, this system has never been tested and there are questions about how willing states would be to share gas during a crisis.
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The European Commission, as the EU's executive branch, is working to revise the rules so that the rules include joint gas purchases, but on a voluntary basis, said Ruven C. Fleming, assistant professor at the University of Groningen in the Netherlands. The fact that the rules are being revised "is a pretty clear indication that even those who installed the mechanism don't think it's going to work very well," Fleming said.
Translated by: Marigona Avdimetaj
