German Press Release
Please note Habeck’s Press Release on Reducing Natural Gas Consumption.
Gas Reduction in Electricity Sector
“The situation on the gas market has deteriorated in recent days. The missing quantities can still be replaced, and the gas storage tanks are still being filled, albeit at high prices. Security of supply is currently guaranteed. But the situation is serious. We are therefore further strengthening precautions and taking additional measures to reduce gas consumption. This means that gas consumption must continue to fall, so more gas must be stored in storage, otherwise things will get really tight in winter. We will now take the next steps. For months we have been in the process of sharpening tools, creating new ones and removing existing obstacles. We are accelerating the expansion of renewable energies in an unprecedented way, we are pushing through the storage of gas and driving the expansion of LNG terminals and energy efficiency measures. The urgency of these tasks determines our ongoing work. Now we’re going to pull out and use another set of tools. We will reduce gas consumption in the electricity sector and in industry and force storage tanks to be filled. Depending on the situation, we will take further measures.”
“With the law, we are setting up a gas replacement reserve on demand. And I can already say: We will call off the gas replacement reserve as soon as the law comes into force. That means, to be honest, more coal-fired power plants for a transitional period. That’s bitter, but in this situation it’s almost necessary to reduce gas consumption. We must and we will do everything we can to store as much gas as possible in summer and autumn. The gas storage tanks must be full in winter. That has top priority,” said Habeck.
Rapid Expansion of LNG Infrastructure
Germany has not yet had a port where liquid gas can be landed. However, this is necessary in order to strengthen the gas supply from non-Russian sources and thus become independent of Russian imports. The federal government is therefore pushing ahead with the construction of so-called floating LNG terminals. First, it has secured four special ships, so-called FSRU , on which liquid gas is converted back into gas. Secondly, with onLNGAcceleration Act, it has created the legal prerequisites to accelerate the construction of the necessary connections on land so that two of the four FSRU ships can go into operation in winter and thusLNGcan be fed into the German gas supply network. Everyone involved is working hard on this.
Only Temporary?!
Those are two of seven points of Habeck’s plan. He notes storage tanks are only 56% full.
Not to worry, that’s ahead of a year ago. But a year ago Germany was getting 100% of the gas it wanted from Russia. Now it’s only getting 40% of the gas it was getting a year ago.
That means it will take 2.5 times as long to fill up the tanks, thus the need to ration natural gas and use coal.
Transitional to What and When?
Well, don’t worry. This is only temporary.
Heaven only knows until when. Meanwhile, Germany is rushing to build floating LNG terminals.
That gas will come from where?
20% of US LNG Capacity Went Offline on June 8
On June 8, an explosion at the Freeport LNG facility in Texas knocked out 20% of US LNG production.
The outage sent US gas futures down 18% from the price a day before the fire. European gas prices shot up by over 60%.
Incredible to see on a chart exactly what happened to natural gas prices in both Europe and the United States at the exact moment that it was announced that a US export terminal would take longer to come back online than previously expected. https://t.co/sbuSHQf6cG pic.twitter.com/h2m9JH3gRq
— Joe Weisenthal (@TheStalwart) June 14, 2022
Since then, US prices have fallen nearly 60 cents to $6.71.
Spotlight on Sanctions
Sanctions on Russia has left equipment key for the functioning of the Nord Stream gas pipeline stuck abroad, signaling shipments via the crucial route to Germany may be curbed for some time https://t.co/8jiaC0EO9b
— Bloomberg (@business) June 14, 2022
No Parts, No Gas
3/ The word “sanctions” is not used, but @Gazprom‘s reasoning indirectly links the situation to @Siemens May 12 announcement that the company will wind down its operations in Russia. https://t.co/5kcZmDgoIC
— Alexander Gabuev 陳寒士 (@AlexGabuev) June 14, 2022
Global Natural Gas Flow
Yet again, I keep returning to the following picture.
Instead of getting natural gas from hundreds of miles away over existing pipelines we compress natural gas in the US then ship it 4,700 miles away Europe.
Meanwhile, Russia fearing eventual European cutoff is building new pipelines to China.
De-globalization is underway. A key ramification is higher inflation.
For further discussion, please see De-Globalization: New Supply Chains Are Inefficient and Will Drive Up Inflation
We have economic illiterates running the country and running the Fed. The average Joe is getting killed.
Dear President Biden, the above charts speak for themselves. If you want to lower inflation, stop the sanctions.
This post originated on MishTalk.Com.
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Mish
A couple of years ago Belgium, Poland and Germany held the 11th, 12th and 16th spot worldwide for nitrogen fertiliser production.Over 5 million tons. Bet those plants are mothballed and will never reopen. Meanwhile Russia will take the gas they used to sell to those countries and either export it to other countries or continue to value add and convert it to fertiliser itself. So the EU can pretend they can import less Russian gas as they import more fertiliser from Russia made with that same gas and adjust the balance of payments even more in Russias favour.
(Bloomberg) — The cost of electricity in France jumped, adding to Europe’s gas woes, as depressed nuclear output squeezes the market.
France’s nuclear reactors are operating at less than half their full capacity and this week have produced the least electricity at this time of year since at least 2008, according to data compiled by Bloomberg. The country, where warm weather is already making it tougher to cool the fleet of reactors, is importing power from neighboring countries like the UK, which historically has taken energy from France.
Electricity generation from state-run Electricite de France SA, the continent’s largest producer of atomic energy, is struggling under lengthy maintenance of its aging fleet and risks heightening the continent’s dependence on gas, which is in short supply. The company may now need to import power from neighbors in winter, straining wider European supply and burdening consumers with higher costs.
The market is pricing in a large risk premium to electricity early next year because of the low nuclear forecast, according to Sabrina Kernbichler, a power analyst at S&P Global Commodity Insights. Energy markets are also bracing for Germany to step up its emergency energy plan following recent gas cuts to Europe, she said.
If Russia invades Lithuania because they’ve blocked trains into to that exclave, they will fail for lack of sufficient conventional military resources, the most basic of which are boots on the ground. They simply don’t have enough fighting men to do it. Short of nukes, the only way Putin can get around it is to supply Koliningrad by sea. Can they do it? I don’t know.
Sure. And what does that get Europe? They provide funds for Russia to wage war on European countries. Doesn’t sound like a great plan to me. Which is why they are looking for other alternatives now.
I am not an EVangelist, but I do own an EV. Bought it a decade ago out of the bankruptcy of Think. The car works fine. The issue is range, but the latest EVs have ranges long enough to make them viable urban second cars. The whole EV discussion all too often winds up being a thoroughly stupid slanging match between the True Believers on both sides. Drop the wrangling, and look at EVs as vehicles with a different fuel source. They aren’t going to save the world, nor will they destroy it. They’re just cars, and should be evaluated as such.
Most people live in a house that is chock full of electric wiring, lights, appliances etc. How about you. A cabin in the woods? How do you connect to the internet?
bring Russian gas into China, began operations in
December 2019. The pipeline’s initial capacity, 5 billion
cubic meters (BCM), would meet 1.3% of China’s 2018
natural gas consumption. As the pipeline reaches its full
capacity of 38 BCM by 2025, natural gas likely will be able
to displace coal in China’s northwest region in the long
term.”
But their needs are pretty voracious … their per capita energy consumption is presently less than 40% of American.
Agree. Up till your last sentence. This was coming anyway. Putin, Biden, et al simply accelerated the timeline.
As I said. Putin is a bit player in this story. And you are welcome to waste your time and blame whoever you want. I don’t really care about who you want to blame. What I care about is the decades long energy transition story.So, how are you taking advantage of this transition?
world instead of accepting a ceasefire offer and sitting down to talk?”
Worldwide scale transitions are impossible to get right. Blame whoever you want. All that shows is your own lack of understanding.