Most Read
Image 01 Image 02 Image 03

Germany, Europe Brace For Energy Crunch As Second Russian Pipeline Goes Down

Germany, Europe Brace For Energy Crunch As Second Russian Pipeline Goes Down

Reuters: “Europe faces fresh disruption to energy supplies due to damage to a pipeline system bringing oil from Kazakhstan through Russia that was reported by the pipeline operator on Monday.”

As I arrived in Berlin today after a gap of almost a year, I noticed how big businesses and ordinary Germans are gearing up for a massive power crisis triggered by the dwindling Russian energy supplies. (Some of our regular readers may recall that I am a German national currently residing in South Africa.)

Government ministers, who haven’t done an honest day’s work in their lives, have taken it upon themselves to ‘educate’ hardworking Germans on how to save on electricity, room heating, and hot water.

I have always considered German media and public debates, whether over Climate Change, Brexit, or pandemic, to be driven by wild hysteria and doom-and-gloom predictions. But this time, the German Angst is based on some challenging and bitter facts.

For years, mainly under former Chancellor Angela Merkel’s watch, the country became hooked on cheap Russian gas, which covered industrial and household needs. With Europe now trying to push back against Russia in the wake of the Ukraine war, President Vladimir Putin is using gas as his crucial bargaining chip.

The pain inflicted by Putin is beginning to hurt ordinary Germans. “Utility companies are passing on the increased costs of gas to their customers. Gas heats more than half of the homes in Germany, and many residents will struggle to pay for it,” German state broadcaster Deutsche Welle reported last month.

Since then, the prices have soared even further, with the German newspaper Bild noting on August 12 that the “electricity and gas prices are going through the roof. The electricity already costs more than four times as much as it did a year ago, and gas seven folds as much.”

Putin Makes German and European Economy Scream

Days after Russian state-owned energy Gazprom announced that it was temporarily halting its main natural gas pipeline to Europe (Nord Stream 1), another gas pipeline — this time the one that brings gas from the former Soviet republic of Kazakhstan via Russia — has gone out of operation “due to damage.”

The Europeans, particularly the Germans, are not buying the Russian claims. They believe the Kremlin is punishing them for imposing sweeping sanctions following the Ukraine invasion.

Reuters reported Monday:

Europe faces fresh disruption to energy supplies due to damage to a pipeline system bringing oil from Kazakhstan through Russia that was reported by the pipeline operator on Monday, adding to concerns over a plunge in gas supplies.

CPC, which handles about 1% of global oil and whose largest shareholder is Russian pipeline firm Transneft, said exports from two of its three mooring points at a Black Sea terminal had been suspended, confirming a Reuters report.

The West accuses Russia of restricting energy supplies to boost prices in retaliation for sanctions imposed after Moscow’s invasion of Ukraine, which the Kremlin calls a special military operation. Russia denies this, blaming Western sanctions themselves and various technical problems.

Russian natural gas supplies to Europe are down around 75% year on year, with export company Gazprom last week announcing unscheduled maintenance on the Nord Stream 1 pipeline, which runs under the Baltic Sea to Germany.

Natural gas prices jumped on Monday, with outages at Norwegian and UK gas fields adding to concerns.

Germany, Canada to Sign Energy Deal

In a desperate bid, Germany’s Chancellor Olaf Scholz traveled to Canada early this week in the hope of signing gas and oil deals.

But Germany is too entangled in the web of Russian pipelines that Canadian Prime Minister Justin Trudeau can’t be of any help, at least not this winter. Germany’s Deutsche Welle admitted that the proposed Scholz-Trudeau “deals on LNG and green hydrogen won’t be able to offer a solution to the Germany’s fear of an energy shortage during winter, as Canada currently holds no LNG terminals for export.”

Politico noted last Friday that the “two progressive leaders” Scholz and Trudeau were “feeling the heat of juggling ambitious and expensive green agendas in a high inflation era.”

As Margaret Thatcher once said, “The facts of life are conservative.” The “progressive” political class has long ignored common sense and reality. Now the facts of life are coming back to bite them with a vengeance.

The Deutsche Welle reported:

German Chancellor Olaf Scholz and his deputy, Economic Affairs and Climate Action Minister Robert Habeck, kicked off a three-day trip to Canada on Monday, seeking to arrange short-term gas-based energy solutions and to explore longer-term, cleaner options, such as green hydrogen. (…)

The focus of the negotiations with Germany will lie on the supply of liquefied natural gas (LNG) and green hydrogen amid Berlin’s attempt to lessen its dependence on Russia as a supplier of gas. (…)

However, deals on LNG and green hydrogen won’t be able to offer a solution to the Germany’s fear of an energy shortage during winter, as Canada currently holds no LNG terminals for export.

Even before the winter can arrive, Germany is tapping into its strategic gas reserves to keep the industry and economy going.

If Russia completely shuts down the gas supply, Germany’s reserves will last less than three months. “Germany will struggle to have enough natural gas to get through the coming winter, even if reserves are replenished in line with government targets,” Bloomberg News estimated. “Refilling gas inventories to 95% full by November would only cover about 2-1/2 months of heating, industrial and power demand if Russia cuts off supplies completely.”

DONATE

Donations tax deductible
to the full extent allowed by law.

Comments

“(Germans) believe the Kremlin is punishing them for imposing sweeping sanctions following the Ukraine invasion.”

Take that, Putin!

    The Gentle Grizzly in reply to LB1901. | August 24, 2022 at 8:41 am

    “We Germans will teach them!. We’ll drive our nation’s solar plexus right into Russia’s fist! Over and over!”

      Ouch!!

      docduracoat in reply to The Gentle Grizzly. | August 25, 2022 at 12:36 pm

      Please don’t forget that Israel has phenomenal amounts of natural gas just under the seafloor off their coast.

      They had proposed East med pipeline which would transport that gas to Cyprus to be fed into the European pipeline system.
      President Biden denied the financial guarantees that would’ve allowed this pipeline to be built.

    henrybowman in reply to LB1901. | August 24, 2022 at 2:32 pm

    Yeah, ya think?
    If somebody wanted me to vote to sanction DeBeers or BMW, I could do that without a second thought.
    If it was to sanction UPS or Safeway, I’d think five times, then probably still decline.
    Did nobody in Germany ever take this into consideration?

That’s what they get for following Bidens lead rather than Trumps.

When Russia cuts off the gas to Germany and the rest of Europe what do you think will happen?

Naturally those countries suddenly suffering enforced weening off sweet, sweet Russian gas are going to be competing with everyone else for what ever has is left behind…which means gas prices are going to skyrocket this coming winter!

But what ever we do don’t you dare suggest we start fracking our own shale reserves or burning our own gas because apparently that won’t reduce prices now BUT some fucking how we can address all this by building even more windmills and mirrors in ever more remote locations, all requiring connecting to the grid AND still requiring gas to balance the grid!

What a self created green fucking palaver!

    The Gentle Grizzly in reply to mailman. | August 24, 2022 at 10:16 am

    Fuckin’ B!

    /I’m fresh out of Fuckin’ A

    MattMusson in reply to mailman. | August 24, 2022 at 11:47 am

    Question: Should US consumers pay 3 times more for Natural Gas in order to bail out Europes bad energy policies? Should we do this to show our support of Ukraine?

      The Gentle Grizzly in reply to MattMusson. | August 24, 2022 at 1:06 pm

      Why not? We’ve done it with blood and treasure before.

      Subotai Bahadur in reply to MattMusson. | August 24, 2022 at 6:42 pm

      They were warned. They were offered alternatives which would give them alternatives and which would have made their situation less critical. They laughed [literally and publicly] largely out of hatred of President Trump and contempt for the American people for electing him. It was their right. However, their choice and their right does not make us responsible for saving any part of their nether regions. Every choice has consequences. They can get scrod [past, pluperfect, subjunctive] because Americans have expended enough on rescuing Europe for a century.

      Mr. Uniyal , please feel free to convey those sentiments to any of the German government types you should encounter.

      Subotai Bahadur

        Vijeta Uniyal in reply to Subotai Bahadur. | August 25, 2022 at 2:49 am

        Thank you, Mr. Bahadur, I agree with you. But poor and hardworking Germans are paying the price for the mistakes of their political class; be it the self-inflicted refugee crisis, or today’s energy crisis.

          Stuytown in reply to Vijeta Uniyal. | August 25, 2022 at 8:42 am

          The people voted in leftist government after leftist government. The people agreed with the decommissioning of the nuclear plants and the conversion to “green” energy. The people are getting what they deserve.

          “But poor and hardworking Germans are paying the price for the mistakes of their political class…”

          No, they are paying for their own mistakes in allowing a corrupt political class to take over the country.

          There are always exceptions. I have several German friends, a relationship that goes back to my 20’s. They know the truth and they have been predicting the outcome for as long as I have.

          We here in the USA are right behind the Germans, but with an exception. When push comes to shove we have the minority’s greatest protector, the 2nd amendment and the weapons to fight back.

    Another Voice in reply to mailman. | August 24, 2022 at 4:39 pm

    When you mesh together ‘The European Nation’ with ‘NATO’ in relation to Eastern Europe Ukraine then vigorously shake all the components in play for the same commodities over a winter of discontent….How long does it take before it all explodes?

    “When Russia cuts off the gas to Germany and the rest of Europe what do you think will happen?”

    Dunkelflaute! That’s what!

Fat_Freddys_Cat | August 24, 2022 at 7:52 am

Gee, you mean they can’t solve this by building a shit ton of windmills? How ’bout that.

This must be the “flat earth” future NYT columnist Thomas Friedman was predicting in 2006. Of course, he was talking about the inevitability of China dominating the new world economy. Here is China doing some flat earthy stuff lately:

https://finance.yahoo.com/news/china-tears-down-tower-blocks-122948254.html

Everything seems to be collapsing in China. I guess that new economy will be dominated by the country that achieves total self-destruction first.

Meaning Germany will buckle first and break with NATO to buy Russian gas.

Hurry, build more windmills!

Considering that the EU/NATO Nations initiated a form of economic warfare via a series of escalating sanctions and suspension from international payment systems to impose pain on Russia why are they now crying when Russia uses the means at their disposal to impose their own economic pain in retaliation? Turnabout is fair play.

IMO, we are witnessing first hand the hubris and depth of folly of the Western Nation’s establishment class. They don’t seem to grasp that not everyone will meekly accept their attempts to bully or intimidate them into submission. These same leaders and policy influencers rebuffed and scorned anyone who pointed out this possibility and doubled down on their ideology. Good luck adapting to the arrival of the consequences you so casually ignored.

    RITaxpayer in reply to CommoChief. | August 24, 2022 at 11:45 am

    Have your priced caviar lately?
    Enough is enough.

      CommoChief in reply to RITaxpayer. | August 24, 2022 at 12:53 pm

      Sorry, I’m a barbarian. I don’t like caviar or sushi.

      “Have your priced caviar lately?”

      Ummm, caviar.

      My wife fixed chicken wings tonight. I heard her mention taking out a 2nd mortgage…

      Chief, any good barbarian will eat raw fish 🙂
      If you want the good stuff, we go out on the beach, catch the fish, clean the fish, and start shaving it 15 minutes after it was removed from the water. I am a true barbarian, I’ll even eat the fish eggs.

    txvet2 in reply to CommoChief. | August 24, 2022 at 1:03 pm

    Of course the “leaders and policy influencers” won’t be the ones suffering the pain. They rarely are.

There is a flip side to this that isn’t discussed — namely, that Russia only earns revenue from oil and NG sales when they sell the stuff.

The Russians do need the cash. They’re financing their side of the Ukrainian war, and Russia has many, many other needs. Putin is aware of all this and knows that keeping the Euros coming in is a big part of what keeps him in power.

So he can only go so far, and for so long. It’s going to be interesting to see who blinks first. My bet — the Germans.

    The Russians have just switched customers. They’re shipping to China, India, and Turkey.

      CommoChief in reply to txvet2. | August 24, 2022 at 5:40 pm

      And at increased prices need to sell far less, even at a 20% discount to spot prices, to make the same revenue. OPEC+ is about to cut production for FY2023 just FYI. Don’t underestimate the beta test phase of an alternate international payment system being conducted right now among the BRICS with Turkey and Saudi putting their toes in the water.

      Long term, resource rich nations would do better to intentionally reduce supply and ride the higher prices created by lack of supply. IMO, the neo mercantile system of the west and backed by the western financial institutions in particular is hitting a perfect storm. Lingering impacts of Rona, foolish western energy policies and environmental restrictions along with a supply system built for international cooperation within a unipolar world.

JackinSilverSpring | August 24, 2022 at 10:18 am

The Germans laughed in Trump’s face when he warned them about being dependent on Russian gas. I guess they’re not laughing anymore. Of course, the other issue is their self-destruction of their fossil fuel and atomic energy plants because they wanted to save the world from what I think is the non-existant issue of CO2. Maybe they should worry more about themselves than listen to the prognostications of the watermelon “climate scientists.”

    As I recall, the composition of air consists of 78% nitrogen and 21% oxygen, and carbon dioxide is a small portion of the remaining 1% (1/25th of that 1%, to be precise). If Planet Earth were to experience a 25% increase in the amount of CO2 in the atmosphere (which is way more catastrophic than even the most ardent climate alarmists predict), it means that carbon dioxide would rise from 1/25th of 1% to 1/20th of 1%.. Yeah, I just don’t see the problem.

      drednicolson in reply to jpwcpa. | August 24, 2022 at 9:27 pm

      70% Nitrogen
      20% Oxygen
      8% Argon
      2% Trace Gasses (which includes CO2)

      Barry in reply to jpwcpa. | August 25, 2022 at 12:23 am

      Not to mention that CO2 has been much, much higher in the past, and before man existed. Musta been the cars those dinosaurs were driving.

The USA has multiple LNG terminals, principally in Louisiana and
Texas but the krauts run to the Canucks who have….none. Dumb.

As Trump told them years back…the USA is an honest source for gas and the Euros will continue to let the lights go out before they will look to the USA.

They should just build a few more windmills. That would solve everything.

I remember Trump at the UN warning the krauts and the camera panned to the kraut delegation and they were smirking and laughing. Schaudenfreude……i am gonna enjoy their pain!