Natural gas prices in Europe exploded last week after reports of too low inventory of natural gas for the upcoming winter. Claims were made that Russia had caused the price increase. But even the BBC finds that this is not the case:
Russia’s own gas storage is also down.
Adeline Van Houtte, a Europe analyst at the Economist’s Intelligence Unit, says: “Currently, the Russian domestic gas market remains tight, with output already near its peak and winter is looming… limiting gas export capacity.”
There are several other factors affecting the situation in Europe, such as:
- cold weather at the start of 2021 depleting stocks
- rising prices in spring and summer put traders off buying to sell later in the year
- limited supply from Norway because of maintenance issues
- reduction in other energy sources such as wind power
- growing demand for gas elsewhere in the world
The ‘liberalization’ of European gas markets by the EU has also led to more speculation. It was one of the many mistakes made in European energy policy.
Yesterday Russia’s president Vladimir Putin held a remarkable speech about energy supply to Europe and pointed out some of its weaknesses:
Over the past 10 years, the share of renewable energy sources in the European energy balance has skyrocketed, which, on the face of it, appears to be a good thing – and they are now playing a significant and noticeable part. What can you say? It is a good thing any way you look at it.
However, this sector is notorious for erratic power generation. It requires large reserve capacities. In the event of major generation failures, primarily due to bad weather, this reserve is simply not large enough to cover the demand.
This is exactly what happened this year, when, due to a decrease in wind farm generation, there was a shortage of electricity on the European market. Prices soared, which triggered a spike in natural gas prices on the spot market.
Importantly, gas consumption is seasonal. Its reserves are traditionally replenished in the summer to meet the winter demand. However, this year, even after a cold winter in Europe, many countries chose not to do so, relying on spot gas supplies and the “invisible hand” of the market, but a spike in demand has sent prices even higher.
To reiterate, the rise in natural gas prices in Europe stemmed from shortages of electricity, not the other way around. There is no need to lay the blame on other people, which is what some of our partners are trying to do. Occasionally, you get stunned by what is being said on this account, as if these people do not know the numbers – I will say more about this later – as if they do not see the reality and are just covering up their own mistakes. Systemic flaws have been gradually introduced in European energy over the past decade, which led to a major market crisis in Europe.
As a reminder, when nuclear and natural gas-based generation were the leading energy sources, there were no such crises, and there were no grounds for them.
Europe, especially as it wants to change its road traffic from hydrocarbon to electric driven, will need more basic electric generation capacity. The only ‘green’ way to achieve that in sufficient size is by nuclear energy.
The Biden administrations finally recognizes that its ‘Iran policy is failing.
Blinken says US is prepared to turn to ‘other options’ if nuclear diplomacy with Iran fails
US Secretary of State Antony Blinken said that if diplomatic talks with Iran fail, the United States “is prepared to turn to other options” to prevent the country from obtaining a nuclear weapon.
Iran does not want to obtain nuclear weapons.
The diplomatic talks with Iran will fail only if the Biden administration fails to return to the nuclear deal and does not lift the sanctions imposed on Iran by the Trump administration. The sole problem is that Biden wants more concessions from Iran than it had given under the JCPOA agreement.
It is funny then to hear Blinken talk of ‘other options’ when everyone knows that the U.S. does not have any. Any U.S. attack on Iran’s nuclear installations will invite a strong military response. A war with Iran would destroy Israel and whatever is left of the U.S. position in the Middle East. Obama had recognized that. Trump had recognized that. It is high time for Biden to recognize that too and to act accordingly.
This morning followers of Hizbullah and Amal in Lebanon protested against a judge who is tasked with investigating last years enormous explosion in Beirut’s harbor. The judge seems to steer the investigation against Hizbullah even as other groups were responsible for the ammonium nitrate storage that has caused the disaster.
During this mornings demonstration snipers from the fascist Lebanese Forces militia opened fire on the protesters. Six were killed and several were wounded. All of them were Shia followers of Amal and Hizbullah. But reading ‘western’ media, here the Guardian, you would not learn that this was a very one-sided affair:
Five people have died in armed clashes that broke out in Beirut during a protest demanding an end to a judicial investigation into last year’s massive blast in the city’s port.
The Lebanese interior ministry confirmed the deaths, and gunfire reportedly wounded more than a dozen other people. The deployment of soldiers failed to stem the violence, which took on a sectarian tone. The fighting happened near a civil war-era frontline in which militias from Maronite Christian and Shia Muslim blocs have previously clashed.
The assault on the protesters happen just as U.S. Deputy Secretary of State Victoria Nuland is visiting Lebanon. Given her direct involvement in the 2014 Maidan coup which also saw sniper fire against protesters it seems unlikely that this is just a coincidence.