In Europe they are seriously talking about possible rolling blackouts this winter if it will be a cold one
Jeremy Weir, director of Trafigura, one of the world’s largest commodity traders, made the statement: “To be honest, we don’t have enough gas at the moment. We are not making reserves for the winter period. So there is a real concern that if we have a cold winter, there could be blackouts in Europe.”
Of course, this generation of Europeans is unlikely to be familiar, even on a theoretical level, with what rolling blackouts are like. And, on the one hand, it is surprising how quickly the prosperous but highly bureaucratic EU has come to terms with such prospects. On the other hand, European bureaucrats were just bringing this scenario closer with their elephantine clumsiness in the energy market. Once again proving that European bureaucracy can be very effective. Another thing is that the effect of reducing the use of coal, and in some countries the use of nuclear power, was probably not planned in the form of rolling blackouts.
Everyone has long been used to talk about possible rolling blackouts in Ukraine. The other day, by the way, the mayor of Odessa Trukhanov announced the threat, following an earlier statement by the mayor of Kiev Klitschko. And the last time they were in Ukraine was not so long ago – in the winter of 2014-2015.
In September this year, China faced rolling blackouts as it sharply reduced coal production as part of its green energy transition ideology. However, the Chinese comrades were quick to increase production, as well as imports, largely coping with the problem by mid-November.
By November, the rolling blackout crisis had reached Kazakhstan and South Africa. The reasons, however, were different. In Kazakhstan, it was the irrepressible mining of cryptocurrencies, while in South Africa, it was the gradual dilapidation of the power generation and the emergency repair of some of it.
But for something like this to happen in Europe, it was unthinkable even five years ago.
However, the so-called Third EU Energy Package, the cutbacks in upstream investment worldwide amid green hysteria, last winter’s cold snap and this summer’s heat, reinforced by the long doldrums in Europe, have created a new reality with natural gas prices never seen before and shortages of natural gas itself. And also with a very serious dependence of its electricity generation on the same gas.
The technical suspension of Nord Stream 2 certification by the German regulator has brought European gas prices back to a thousand dollars per thousand cubic metres. The extraordinary hikes in gas prices this autumn have created problems for market participants, Weir acknowledged. “As a result, the market was almost unable to function normally,” he said. As for oil, shortages persist and the lack of investment in new projects means that a “triple-digit price”, that is from $100 a barrel, is “very, very likely”. Brent oil is trading slightly above $81, although at the start of the year the price was around $50. “Oil stocks are not being replaced. We’ve gone from 15 years of reserves for development to ten years in a short time,” Weir said.
So, by and large, there are no rosy prospects for Europe yet. LNG is mostly bought by China and other Southeast Asian countries – and in large quantities and at almost any price. Europe’s own storage capacities are less than 73 percent full and have fallen by almost five percentage points in the last month. And winter has not even started yet. By the way, last year at the same dates, stocks stood at 93 per cent.
The Europeans, however, are beginning to suspect something. “Gazprom’s refusal to book additional capacity in order to increase or at least maintain the existing level of gas transit through Ukraine and Poland has led to a debate about the extent to which this decision is linked to the delayed commissioning of Nord Stream 2. This is what the latest report by the European Union’s Energy Regulators’ Cooperation Agency says. That is, the agency does not say directly that there will not be a significant increase in gas supply before Nord Stream 2 comes on stream, but it does give some hints of understanding of this fact.
The rolling blackouts, if it comes to it, will not only greatly contribute to debunking the myth about a prosperous Europe but will also raise the question of efficiency of the European bureaucrats in managing the territory. There is no doubt that, if anything, the full force of European propaganda will descend on Russia with accusations of blackouts due to gas shortages. However, both the blackouts themselves and the very likely quarrels between the EU members, with each state taking decisions in the interests of its consumers (as it already did at the beginning of the pandemic), will create a very unwholesome picture. This will be difficult to hide from the local electorate, even behind a stream of accusations against Moscow.
The hysteria about a possible military clash between Russia and Ukraine is also worth mentioning in this context. It would have been fine if it had only come from Washington, but France and Germany have been very active in the process. Although the authorities of the key EU countries should have thought about what would happen to Europe and European households if the United States succeeded in pitting Ukraine against the unrecognised republics of Donbass and provoking a more or less large-scale war. Then it may not be just a matter of rolling blackouts – for political (sanctions) and/or technical (e.g., the breakdown of Ukraine’s gas transportation system) reasons, Europe may not even have enough gas to heat its homes.
Valery Mikhailov, RIA