Putin’s game. Europe faces difficult “invasive options”

Europe faced an energy crisis even before the Nord Stream 1 pipeline from Russia to Germany was closed for regular maintenance, and now that gas is back after maintenance, a return to the previous level of supply is still not guaranteed, according to the Associated Press.

The agency says government officials are prepared for the possibility that the main pipeline may not start again as scheduled.

And it quoted officials who said that Russian President Vladimir Putin was using energy for political pressure in his confrontation with the European Union over Ukraine.

Russia has already cut off the flow of natural gas to Europe, affecting the operation of factories, generating electricity and heating homes in the winter, and Putin warns that it could continue to decline.

Stocks via Nord Stream 1 were also reduced by 60% before repairs began.

Even if the pipeline is restarted at these reduced levels, Europe will struggle to keep homes warm and the industry booming this winter.

After the European Union imposed severe sanctions on Russian banks and companies and began sending weapons to Ukraine, Russia cut gas to six member states and cut supplies to another six.

Flow to Germany, the EU’s largest economy, via Nord Stream 1 has fallen by two-thirds as Russia blames part of the pipeline sent to Canada for maintenance and has not been returned due to sanctions.

European leaders rejected the claim, saying it was a political maneuver in response to the sanctions.

This has left the European Union with 27 members scrambling to replenish gas supplies before winter, when demand rises and utilities withdraw their reserves to keep homes warm and power plants running.

The agency says the EU’s target is to use less gas now to build winter storage, as Europe’s gas reserves are only 65% ​​full, compared to an 80% target by 1 November.

Europe saw a record rise in energy derivatives prices after Russia reduced gas flows

Why is Russian gas important?

Russia supplied about 40% of Europe’s natural gas before the war. It dropped to about 15%, driving up prices and straining energy-intensive industries.

The gas is used by a series of processes that most people may not know about – such as forming steel to make cars, making bottles and pasteurizing milk and cheese.

Companies warn that they often cannot switch to other energy sources such as fuel oil or electricity overnight to produce heat.

In some cases, equipment containing molten metal or glass is destroyed if the heat is suddenly turned off.

Rising energy prices are already threatening to cause a recession in Europe in times of inflation, when consumers have less money to spend as food, fuel and utility costs rise.

A complete moratorium on spending will inflict an even heavier blow on an already plagued economy.

What is Nord Stream 1 pipeline?

It is the most important European natural gas pipeline running under the Baltic Sea from Russia to Germany and is the main source of Russian gas in Germany.

Klaus Muller, head of Germany’s network regulator, said on Twitter that Russia’s state-run Gazprom had announced plans to supply about 530 gigawatt-hours of gas via Nord Stream 1 on Thursday – about 30 percent of the pipeline’s capacity and down from about 800 gigawatt hours that the company had.This informed the Europeans hours before the announcement of its preparation. “More changes are possible,” Mueller noted.

In the days before the shutdown for maintenance, the gas supply operated at about 700 gigawatt hours per day.

Analysts at Rystad Energy said that if Nord Stream 1 remained idle, Europe would fill only about 65% of its storage capacity, creating a real risk that it would run out of gas during the heating season.

There are three other pipelines transporting Russian gas to Europe, one of which is closed, running through Poland and Belarus. Another line, through Ukraine and Slovakia, continues to bring reduced amounts of gas despite the fighting, as well as one through Turkey to Bulgaria.

Pipeline maintenance work has begun

Maintenance work has begun on the Nord Stream 1 pipeline, which supplies gas to Germany. Archives

What is Putin’s game?

Although Russia’s oil and gas exporters sell less energy, higher prices mean that Putin’s profits have already increased, according to the International Energy Agency.

Since the invasion, Russia’s oil and gas exports to Europe have doubled over the average of recent years, to $ 95 billion, according to the Paris-based International Energy Agency.

And the increase in Russia’s energy revenues in just the last five months is three times what it normally achieves by exporting gas to Europe over an entire winter, so Putin has money on hand and can calculate that painful utility bills and an energy stagnation The popular may undermine support for Ukraine In Europe, sentiment is growing after a negotiated settlement in its favor, according to the Associated Press.

“Based on what we have seen over the past year, it would be unwise to rule out the possibility that Russia will decide to relinquish the revenue it receives from exporting gas to Europe in order to gain political influence,” he said. Fatih, executive director of the IEA. Birol.

In fact, Putin said, the amount of gas pumped by Nord Stream 1 will drop by more than 60 million to 30 million cubic meters per day, or about a fifth of its capacity, as turbines sent to Canada for repairs not replaced quickly. Canada said it had returned the part, but Germany refused to track it down.

“Our partners are trying to shift the blame for the mistakes they have made to Russia and Gazprom, but it is absolutely unfounded,” Putin told Russian reporters on Tuesday during talks in Tehran with the leaders of Iran and Turkey.

What can Europe do?

The European Union has switched to more expensive liquefied natural gas, or liquefied natural gas coming by ship from places like the United States and Qatar.

Germany is speeding up the construction of LNG import terminals on the North Sea coast, but it will take years. The first floating reception station will come into operation later this year.

But LNG alone cannot close the gap.

The world’s LNG export facilities are operating at full capacity amid tight energy markets, and there is no more gas to get your hands on.

An explosion at a U.S. plant in Freeport, Texas, which sends most of its gas to Europe, shut down 2.5% of Europe’s supply overnight.

Storage and transition to other energy sources are key, the agency says.

Germany, for example, operates coal plants for longer, sets up a gas auction system aimed at encouraging conservation, and resets thermostats in public buildings.

The European Union on Wednesday proposed that member states voluntarily reduce their gas use by 15% over the coming months.

The European Commission, the EU’s executive arm, is seeking the power to impose mandatory cuts across the block if there is a risk of severe guest shortages or unusually high demand.

EU member states will discuss the measures next Tuesday at an emergency meeting of energy ministers.

Countries are scrambling to secure alternative energy supplies, with the leaders of Italy, France and the European Union concluding agreements this week with their counterparts in Algeria, Azerbaijan and the United Arab Emirates.

Homes, schools and hospitals are unlikely to lose heat because governments are required to impose rations on businesses first. The German government can also allow gas suppliers to pass on the increases to customers immediately.

If the supply of Nord Stream 1 is resumed at reduced levels, Europe will have to supply 12 billion cubic meters of gas, the equivalent of 120 LNG carriers, to fill storage levels by winter.

The International Energy Agency recommends that European countries step up campaigns for people to stay at home and plan to share gas in an emergency.

A complete disconnection will mean more need for storage, and time will be shorter.

“European leaders must now prepare for this possibility to avoid the potential damage that could result from an incoherent and destabilizing response,” Birol said. “This winter could be a historic test of European solidarity – a test we can not afford to fail – with repercussions far beyond the energy sector.” “.

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