European gas imports

lancelot wrote:
No it is not. They did not increase capacity in Europipe II when they did Baltic Pipe. The whole rationale behind Baltic Pipe is that Germany would have enough Russian gas via Nord Stream that they did not need all that Norwegian gas anymore, so it could be diverted to the Danes and Poles.

Well, I have never inspected the numbers as the issue was under my radar, but the general mood of how it was described here was about how much redundancy we will get.
So probably you are right, and things have been presented here in an over-optimistic manner.

By Michael Hudson, from Martyanov's blog:  

The Euro Without German Industry

   The reaction to the sabotage of three of the four Nord Stream 1 and 2 pipelines in four places on Monday, September 26, has focused on speculations about who did it and whether NATO will make a serious attempt to discover the answer. Yet instead of panic, there has been a great sigh of diplomatic relief, even calm. Disabling these pipelines ends the uncertainty and worries on the part of US/NATO diplomats that nearly reached a crisis proportion the previous week, when large demonstrations took place in Germany calling for the sanctions to end and to commission Nord Stream 2 to resolve the energy shortage.

   The German public was coming to understand what it will mean if their steel companies, fertilizer companies, glass companies and toilet-paper companies were shutting down. These companies were forecasting that they would have to go out of business entirely – or shift operations to the United States – if Germany did not withdraw from the trade and currency sanctions against Russia and permit Russian gas and oil imports to resume, and presumably to fall back from their astronomical eight to tenfold price increase.

   Yet State Department hawk Victoria Nuland already had stated in January that “one way or another Nord Stream 2 will not move forward” if Russia responded to the accelerating Ukrainian military attacks on the Russian-speaking eastern oblasts. President Biden backed up U.S. insistence on February 7, promising that “there will be no longer a Nord Stream 2. We will bring an end to it. … I promise you, we will be able to do it.”

   Most observers simply assumed that these statements reflected the obvious fact that German politicians were fully in the US/NATO pocket. Germany’s politicians held fast turbines refusing to authorize Nord Stream 2, and Canada soon seized the Siemens dynamos needed to send gas through Nord Stream 1. That seemed to settle matters until German industry – and a rising number of voters – finally began to calculate just what blocking Russian gas would mean for Germany’s industrial firms, and hence domestic employment.

   Germany’s willingness to self-impose an economic depression was wavering – although not its politicians or the EU bureaucracy. If policymakers were to put German business interests and living standards first, NATO’s common sanctions and New Cold War front would be broken. Italy and France might follow suit. That prospect made it urgent to take the anti-Russian sanctions out of the hands of democratic politics.

   Despite being an act of violence, sabotaging the pipelines has restored calm to US/NATO diplomatic relations. There is no more uncertainty about whether Europe may break away from U.S. diplomacy by restoring mutual trade and investment with Russia. The threat of Europe breaking away from the US/NATO trade and financial sanctions against Russia has been solved, seemingly for the foreseeable future. Russia has announced that the gas pressure is falling in three of the four pipelines, and the infusion of salt water will irreversibly corrode the pipes. (Tagesspiegel, September 28.)

    Where do the euro and dollar go from here?

   Looking at how this will reshape the relationship between the U.S. dollar and the euro, one can understand why the seemingly obvious consequences of Germany, Italy and other European economies severing trade ties with Russia have not been discussed openly. The solution is a German and indeed Europe-wide economic crash. The next decade will be a disaster. There may be recriminations against the price paid for letting Europe’s trade diplomacy be dictated by NATO, but there is nothing that Europe can do about it. Nobody (yet) expects it to join the Shanghai Cooperation Organization. What is expected is for its living standards to plunge.

   German industrial exports and attraction of foreign investment inflows were major factors supporting the euro’s exchange rate. To Germany, the great attraction in moving from the deutsche mark to the euro was to avoid its export surplus pushing up the D-mark’s exchange rate and pricing German products out of world markets. Expanding the eurozone to include Greece, Italy, Portugal, Spain and other countries running balance-of-payments deficits prevented the euro from soaring. That protected the competitiveness of German industry.

   After its introduction in 1999 at $1.12, the euro sank to $0.85 by July 2001, but recovered and indeed rose to $1.58 in April 2008. It has been drifting down steadily since then, and since February of this year the sanctions have driven the euro’s exchange rate below parity with the dollar, to $0.97 this week.

   The major deficit problem has been rising prices for imported gas and oil, and products such as aluminum and fertilizer requiring heavy energy inputs for their production. And as the euro’s exchange rate declines against the dollar, the cost of carrying Europe’s US-dollar debt – the normal condition for affiliates of U.S. multinationals –rises, squeezing profits.

   This is not the kind of depression in which “automatic stabilizers” can work to restore economic balance. Energy dependency is structural. To make matters worse, the eurozone’s economic rules limit its budget deficits to just 3% of GDP. This prevents its national governments supporting the economy by deficit spending. Higher energy and food prices – and dollar-debt service – will leave much less income to be spent on goods and services.

   As a final kicker, pointed out by Pepe Escobar on September 28 that “Germany is contractually obligated to purchase at least 40 billion cubic meters of Russian gas a year until 2030. … Gazprom is legally entitled to get paid even without shipping gas. … Berlin does not get all the gas it needs but still needs to pay.” A long court battle can be expected before money will change hands. And Germany’s ultimate ability to pay will be steadily weakening.

   It seems curious that the U.S. stock market soared over 500 points for the Dow Jones Industrial Average on Wednesday. Maybe the Plunge Protection Team was intervening to try and reassure the world that everything was going to be all right. But the stock market gave back most of these gains on Thursday as reality no longer could be brushed aside.

   German industrial competition with United States is ending, helping the U.S. trade balance. But on capital account the euro’s depreciation will reduce the value of U.S. investments in Europe and the dollar-value of any profits they may still earn as the European economy shrinks. Reported global earnings by U.S. multinationals will fall.

    The effect of U.S. sanctions and the New Cold War outside of Europe

   The ability of many countries to pay their foreign and domestic debts already was reaching the breaking point before the anti-Russian sanctions raised world energy and food prices. The sanctions-driven price increases have been compounded by the dollar’s rising exchange rate against nearly all currencies (ironically, except against the ruble, whose rate has soared instead of collapsing as U.S. strategists tried in vain to make happen). International raw materials are still priced mainly in dollars, so the dollar’s currency appreciation is further raising import prices for most countries.

   The rising dollar also raises the local currency cost of servicing foreign debts denominated in dollars. Many European and Global South countries already have reached the limit of their ability to service their dollar-denominated debts, and are still coping with the impact of the Covid pandemic. Now that US/NATO sanctions have driven up world prices for gas, oil and grain – and with the dollar’s appreciation raising the cost of servicing dollar-denominated debts – these countries cannot afford to import the energy and food that they need to live if they have to pay their foreign debts. Something has to give.

   On Tuesday, September 27, U.S. Secretary of State Antony Blinken shed crocodile tears and said that attacking Russian pipelines was “in no one’s interest.” But if that really were the case, no one would have attacked the gas lines. What Mr. Blinken really was saying was “Don’t ask Cui bono.” I don’t expect NATO investigators to go beyond accusing the usual suspects that U.S. officials automatically blame.

   U.S. strategists must have a game plan for how to proceed from here. They will try to maintain a neoliberalized global economy for as long as they can. They will use the usual ploy for countries unable to pay their foreign debts: The IMF will lend them the money to pay – on the condition that they raise the foreign exchange to repay by privatizing what remains of their public domain, natural-resource patrimony and other assets, selling them to U.S. financial investors and their allies.

   Will it work? Or will debtor countries band together and work out ways to restore the world of affordable oil and gas prices, fertilizer prices, grain and other food prices, metals and raw materials supplied by Russia, China and their allied Eurasian neighbors, without U.S. “conditionalities” such as have ended European prosperity?

   An alternative to the U.S.-designed neoliberal order is the great worry for U.S. strategists. They cannot solve the problem as easily as sabotaging Nord Stream 1 and 2. Their solution probably will be the usual U.S. approach: military intervention and new color revolutions hoping to gain the same power over Global South and Eurasia that America’s diplomacy via NATO wielded over Germany and other European countries.

   The fact that U.S. expectations for how anti-Russian sanctions would work out against Russia have been just the reverse of what actually has happened gives hope for the world’s future. The opposition and even contempt by U.S. diplomats toward other countries acting in their own economic interest deems it a waste of time (and indeed, to be unpatriotic) to contemplate how foreign countries might develop their own alternative to the U.S. plans. The assumption underlying this U.S. tunnel vision is that There Is No Alternative – and that if they don’t think about such a prospect, it will remain unthinkable.

   But unless other countries work together to create an alternative to the IMF, World Bank, International Court, World Trade Organization and the numerous UN agencies now biased toward the U.S/NATO by U.S. diplomats and their proxies, the coming decades will see the U.S. economic strategy of financial and military dominance unfold along the lines that Washington has planned. The question is whether these countries can develop an alternative new economic order to protect themselves from a fate like that which Europe this year has imposed upon itself for the next decade.  

https://smoothiex12.blogspot.com/2022/09/something-about-future.html

The Nord Stream 2 AG company has informed the Danish Energy Agency that a stable pressure now appears to have been achieved on the NS2 A pipeline. This thus indicates that the blow-off of gas has been completed on this pipeline.

kvs wrote:I rest my case, the US decider clowns are certifiably congenital idiots.

Certainly... but what about German politicians, being raped in the ass in front of the whole world and taking it with a smile this way? They simply can't get any lower

Wait for it. Give them a chance. They will get lower.

Before we go all out on blaming the US give this article a read, there are others in the frame as the 'winners' in this situation.

What Luongo is in effect postulating is that we are falling into a trap in blaming countries, that is so 19th and 20th century, now, in the days of rapid communications and movement, we should be thinking of extra national groups or factions as per the EU or in particular the group known as 'Davos'.

It is a long article but thought provoking so worth the time.

https://tomluongo.me/2022/09/29/the-curious-whodunit-of-nordstreams-1-and-2/

Another MoA post, this time laying bear the EU problem, forget LNG infrastructure, there just isn't enough gas without Russia's.



"1) The objective of the USA is to be able to export 50 Gm3 of natural gas per year to Europe in the form of LNG.

Even if it is achieved, it is largely insufficient to replace the 155 to 190 Gm3 that Russia supplies to the EU annually.

The plan proposed by Joe Biden for 2022 for example targets 15 Gm3, in association with all other producing countries.

It must also be taken into account that, counting on a future increase in its production, the US has signed a large long-term contract of 30 years with China that it will therefore have to honor.


2) This American production is based on shale gas, whose drilling is running out very quickly. To simply maintain the quantity produced, new, more expensive drilling is constantly needed.

Rather, quantities are expected to be reduced in the coming years.

3) No country in the world, alone or together, can replace the quantities supplied by Russia in the short term.

In the long run, the only solution outside Russia would be the world's largest gas field shared by Qatar and Iran. Qatar is counting on these reserves to increase from 185 Gm3 of current annual production to 300 Gm3 in a few years.

However, Qatar already has long-term contracts with several customers, which contracts the European Union refuses to sign, unlike China, Japan, South Korea or India, which therefore have priority.

Moreover, the banks, caught up in the ecological diktat, refuse to finance the investments necessary to develop these resources.

4) The approximate general scheme is as follows (rounded figures):

* 380~400 Gm3 is the annual consumption of the EU:
* 40 Gm3 is internal production;
* 340~380 are imported including:

* 155~190 from Russia,
* 100~110 from Norway,
* 20~25 from Qatar,
* 55~65 others including Algeria, USA,...


Norway is at its maximum production. If the other suppliers double their exports to Europe, this represents a maximum of 90 Gm3 more, still insufficient to replace Russian gas.


5) The other solution would be for Qatar to reserve almost all of its new production, 100 to 115 Gm3 to the European Union and for the UNITED States to terminate certain long-term contracts with Asian countries to supply Europe.

But for this to happen, Qatar requires the EU to finance investments to increase its production capacity, and to sign long-term contracts of at least 20 years, which it refuses.

6) THE main problem of the European Union is not the long term but the short term. Without Russian gas, the EU can spend the winter at great sacrifice, but it has no chance by the following winter. And it is not about LNG infrastructure but about lack of gas.


Unless, as now, they buy gas with China and India pretending not to know that it is Russian gas, paid more.


7) In the end, the Russian economy will be little impacted by this crisis. The cost of new LNG infrastructure and pipelines to Asia will be more than offset by current excess profits.

If some producers decide to terminate contracts to supply Europe as a priority, their former customers will naturally turn to Russia. The mere increase in China's need for natural gas is enough to replace the European market.
Europe is the only loser in this matter...

Posted by: UncleTom | Oct 1 2022 12:54 utc | 33"

Gents, the problem is quite a bit more severe than that, since the U.S itself, doesn't have remotely enough "Freedom gas" for itself, much less Europe.
So its gonna be LNG from elsewhere, who are just reselling Russian gas.

Like Saudi-Arabia importing russian oil in the summer to keep all their air conditioners running.

when Scotland leaves the UK next year, the rUK faces big problems as 65% of the UK's gas comes from Scotland's maritime waters as well as over 96% of the oil and we supply over 10% of there electricity, geological survey was done around the whole of Scotland's maritime boundary in the mid 1990s and they have found out our entire maritime boundary has vast reserves of oil and gas, the firth of Clyde alone was found to have more oil and gas than the entire Scottish and Norwegian sectors of the North sea, only Faslane was stopping oil and gas being extracted from the Firth of Clyde and the UK nuclear fleet will have to leave Faslane within 3 years thus weakening NATO in the process

Sean Foo with another very clear and succinct video, this time on the energy situation in Europe and how it's going to worsen.

https://m.youtube.com/watch?v=38ofBQG6xPk&t=1s

Miller said that entire European cities will freeze in winter, 10.12.2022.

Miller said it is likely that entire European cities will freeze in winter.

The head of Gazprom, Alexei Miller, said that during the winter peak of cold weather, entire European cities could freeze.

He added that the winter will be generally warm, but there will be several days of abnormally cold. During this period of time, entire cities, entire lands can be frozen, Izvestia reports his words .

He added that, according to forecasts, only 5% of gas will remain in UGSFs in Europe in March, while in Germany there will be enough gas in storage facilities for only 2–2.5 months. In addition, Miller pointed out that Gazprom predicts an abnormally cold winter for the heating period to pass.

On Wednesday, Russian President Vladimir Putin said at the Russian Energy Week forum that European authorities are trying to blame Russia for their mistakes, but it is not her fault that Europeans are forced to stock up on firewood for the winter, as in the Middle Ages.

https://vz.ru/news/2022/10/12/1181931.html

Forget OPEC, even Norway is having issues.