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Europe tried to abandon Russian gas, failed and now blames Russia for everything

Today, more and more analysts confidently state that the “gas anomaly” will continue for at least the entire first half of 2022

Today, more and more analysts confidently state that the “gas anomaly” will continue for at least the entire first half of 2022

Photo: EAST NEWS

The energy crisis continues to hit the standard of living of Europeans. Less than a year’s electricity bills in the EU and the UK grew up, on average, one and a half times. And this is already making a decisive contribution to accelerating inflation and reducing the level of consumption, especially for poor households. The post-COVID economic recovery is also in question. And if even in autumn it was believed that ultra-high gas prices (in the region of $1,000 per thousand cubic meters) will last, at best, until the end of winter, which accounts for peak consumption. Today, more and more analysts are confidently declaring that the “gas anomaly” will continue for at least the entire first half of 2022.

ERRORS OF EUROBUROCRATS

As usual, problems of this magnitude are caused not by any one wrong decision, but by a whole chain of overlapping subjective and objective factors. Of course, the man-made nature of the current crisis is noticeable, in many respects. It is caused, firstly, by the too hasty, unprepared transition of Europeans to renewable energy. And secondly, rejection of long-term gas contracts in favor of exchange trade in gas.

On both counts, now we can safely talk about the catastrophic managerial mistakes of the euro-authorities, bordering on incompetence. The first case does not take into account the fact that solar and wind energy are not only very expensive in terms of cost, but also unpredictable in terms of supply stability. In the second case, the miscalculation consisted in the fact that an overabundance of energy capacities in the market was accepted as an axiom, while in reality buyers had to compete for sellers, and not vice versa. The decommissioning of nuclear power plants in Germany, the emergency work at Norway’s largest gas field, and China’s purchase of almost all available LNG on the market have created an unprecedented supply shortage.

FROM A SICK HEAD TO A HEALTHY

From the above reasons, it is clearly seen that Russia has nothing to do with any of them. Moreover, for many years, Gazprom has been almost the only supplier of natural gas to the European market, which strictly fulfills all its obligations, regardless of any circumstances.

But Western partners would not be themselves if they did not try to place all the blame for their own mistakes on Russia. The other day, another voice joined this choir – the head of the International Energy Agency, Fatih Birol. Recognizing the fulfillment by Gazprom of all contractual obligations, nevertheless, he reproaches the unwillingness to increase spot deliveries to Europe. The volume of Russian gas traded on the stock exchanges, according to Mr. Birol, could be increased by a third. The second claim is low inventory in the storage facilities of Gazprom in the EU.

European bureaucrats are trying to present the case in such a way that Gazprom allegedly behaves in a non-market way. Like, there is an increased demand for goods, why not increase the supply on the market. However, this logic gives a simplified and distorted idea of ​​how the gas business works.

The commercial interests of Gazprom imply, first of all, the establishment of stable and guaranteed relations with consumers. The head of the IEA turns a blind eye to the fact that even in 2021, Gazprom increased fuel supplies to countries with which it has contractual obligations. Thus, more than 50 billion cubic meters of gas were supplied to Germany, more than 10 percent more than a year earlier. Deliveries to Italy, Turkey, Serbia, Finland and a number of other countries have also been increased. It is important to note that the contract price (including additional volumes) remains well below the market price. As for the level of gas reserves in Gazprom’s European storage facilities, it is clearly unnecessary to dramatize this situation: it is obvious that the Russian supplier is able to satisfy the needs of European buyers even during periods of peak demand.

NON-MARKET BEHAVIOR

If we analyze the statements on the gas issue by Fatih Birol or, for example, NATO Secretary General Jens Stoltenberg, then it becomes clear that they see Gazprom as a kind of last resort supplier of last resort, which is obliged to come to the rescue in case of interruptions from other suppliers. But this is not true! European authorities have never approached Gazprom with a proposal to become a supplier of last resort. And in the gas market, the Russian company represents only its own interests, but not the interests of European consumers, and even more so of the ruling elites in Western countries, now worried about the dissatisfaction of the electorate due to the increase in the cost of living.

Moreover, if we talk about non-market behavior, then this epithet is much more suitable just for European bureaucrats, who defiantly postpone certification of the Nord Stream 2 pipeline solely for political reasons (which no one hides). The same non-market mechanism, in fact, is all the excessive European gas regulation.

THE GOALS ARE THE SAME, BUT THERE IS NO AGREEMENT

It remains to add that current energy crisis in the Old World can by no means cause us to rub our hands contentedly. In no way does it benefit either our country as a whole or Gazprom in particular. The company has repeatedly stated that too high gas prices are playing a cruel joke – the volume of industrial consumption of blue fuel is sharply reduced. At the same time, growing inflation in Europe (including food inflation) is inevitably imported into Russia, putting pressure on our economy. So it turns out that the goals of Russia and Europe in the gas issue are the same, but for some reason it is impossible to agree.

And all Europe needs to recognize is the obvious fact that without Russia it is impossible to achieve an energy balance in the coming years and, accordingly, our interests must also be taken into account. But while on the other side of the Danube they prefer to persist in their delusions …

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