Tuesday, October 26, 2021
Is Russia taking advantage of gas shortages?
US government warns of “life-threatening” crisis
Rising gas prices are hitting European consumers and businesses hard. The US government warns, however, that the crisis could get worse. Russia has it in its hand to help the Europeans, but is taking advantage of the situation, warns an employee of US President Biden.
The US government has called on Europe’s energy crisis caused by the skyrocketing gas price. US President Joe Biden’s advisor on global energy security warned in a conversation with journaliststhat Russia could use its key position as Europe’s gas supplier as a weapon and worsen the crisis with “life-threatening” consequences.
The rising energy prices, according to Amos Hochstein, have several causes, including the drought in parts of China. As a result, electricity generation from hydropower is restricted and the demand for natural gas on the world market has increased significantly. Russia is the actor who can best help Europe. However, he has the impression, said Hochstein, that while Russia has enough gas to deliver sufficient quantities, “it is deciding not to do that”. Russia apparently only wants to deliver more natural gas if Europe fulfills demands that have nothing to do with this business.
Hochstein currently sees Europe as being completely dependent on Russian gas supplies. Russia has the opportunity to increase its gas production, said Hochstein. The International Energy Agency has confirmed that. Therefore, the country is currently the only gas producer that “could really make a big difference” in terms of Europe’s energy security in the coming winter.
Dispute over Nord Stream 2
While energy prices have risen worldwide, the situation on the European gas market, on which energy-intensive industries as well as millions of households depend, is particularly dire. Wholesale prices have already multiplied in the past few months. The first utility companies that were unable to pass these price increases on to their customers have already had to file for bankruptcy or cease operations. Since the gas storage facilities in Germany and other countries are nowhere near completely full, unlike in previous years, Europe will be particularly dependent on gas deliveries in the coming winter months. In the worst case, at the end of a cold winter, parts of Europe might not have enough gas for heating and industry.
The Russian government has repeatedly denied allegations that it is exploiting the situation politically. However, President Vladimir Putin has also linked his offer to deliver more gas to Europe with the commissioning of the recently completed Nord Stream 2 pipeline. The main transit countries to date, such as Ukraine, have emphasized that there is still sufficient capacity in the existing pipelines to increase deliveries. Therefore, Putin’s statements arouse fears that he will use the situation to quickly implement the pipeline, which has been severely criticized by the United States, among others.
Hochstein urged Russia to increase its gas supplies immediately. If Russia said it could quickly deliver more gas through Nord Stream 2, it could also do so through the old pipeline, said Hochstein.