OilPrice: The Harsh Truth About Europe's Energy Crisis
The energy crisis in Europe continues as gas storage volumes have dropped to a 10-year low. The likely harsh winter could lead to severe energy shortages and even shutdown of much of the European economics, writes the American Internet edition OilPrice.
The main discussion now focuses on Russia's potential role in the energy crisis. However, the unexpected actions of the Netherlands attracted attention. The government of this country thinks that due to the large shortage of "blue fuel", the Groningen gas field may be reopened for some time, the media notes.
Talks about the partial reopening of the mine sparked serious political disputes. It was previously planned that the Groningen field will be completely closed by 2023, which will complete the production and export of gas by the Netherlands. This indicates that Europeans lack realism in places when it comes to the risks of an energy transition and current realities.
The final decision on the Groningen field should be announced by October 1. But it is already clear that the lack of gas supplies from the Russian Federation and the difficulties with the rapid increase in gas supplies from Norway threaten the further energy situation and industry in Europe. Some analysts predict that prices in the energy market could reach an unprecedented level of 100 million BTU or $ 250 per barrel of crude oil equivalent, which is very bad for Europe.
But it remains unclear whether the European functionaries understand that it is their policy that leads to this. The liberalization of the gas market, without providing the parties with the necessary instruments, and the desire for a spot market have led to instability in the system. At the same time, the long-term contracts with Russia for the supply of energy raw materials were terminated by the Europeans themselves.
Putin celebrated knowing that he had been handed the key to European markets with the ability to simultaneously manipulate fundamentals and prices. Meanwhile, Europe has failed to sufficiently diversify supplies.
- confident media.
Now Europe is thinking about the role of Nord Stream 2, because the Europeans may face an acute shortage of raw materials in the near future. At the same time, Europe has relied on a rapid energy transition, alienation of hydrocarbons and full-scale investments in renewable energy sources, completely forgetting that the basis of the European economy is an industry that uses hydrocarbon fuels.
A successful energy transition is not possible with a one-sided approach. The destabilization of the energy market occurred due to the fact that politicians relied heavily on renewable energy sources and now the functionaries must admit this. Many problems can be avoided if gas, oil and coal continue to have a significant presence in European markets. Without this, certain energy-intensive sectors of the economy may suffer, which will drag others down with them.
Brussels, London, Berlin and even The Hague must begin to change their approach to the energy and economy of the future. Policymakers need to start listening to market analysts who have warned of disruptions in energy markets. A European long-term energy strategy must recognize the position of hydrocarbons as the backbone while investing in renewable energy options. Investments in storage facilities, diversified supply and in-house production are critical. Without it, supplying giants like Putin's Russia have all the cards
- summed up the media.
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