Europe is finally feeling the pinch of the Russia- Ukraine war.
Paris-based International Energy Agency (IEA) has reported that Europe faces “unprecedented risks” to its natural gas supplies this winter after Russia cut off most pipeline shipments and could wind up competing with Asia for already scarce and expensive liquid gas that comes by ship.
IEA said European Union countries would need to reduce use by 13% over the winter in case of a complete Russian cutoff amid the war in Ukraine. Much of that cutback would have to come from consumer behavior such as turning down thermostats by 1 degree and adjusting boiler temperatures as well as industrial and utility conservation, the group said.
The EU agreed to mandate a reduction in electricity consumption by at least 5% during peak price hours.
Just a trickle of Russian gas is still arriving in pipelines through Ukraine to Slovakia and across the Black Sea through Turkey to Bulgaria. Two other routes, under the Baltic Sea to Germany and through Belarus and Poland, have shut down.
Another hazard in the study was a late winter cold snap, which would be particularly challenging because underground gas reserves flow more slowly at the end of the season due to less gas and lower pressure in the storage caverns. The EU has already filled storage to 88%, ahead of its goal of 80% before winter. The IEA assumed 90% would be needed in its Russian cutoff scenario.
The New Arab reported that high prices for gas, which is used for heating homes, generating electricity, and a host of industrial processes are feeding through to record consumer inflation of 10% in the 19 EU member countries that use the euro and sapping so much consumer purchasing power that economists predict a recession at the end of this year and the beginning of next.
European governments and utilities have made up much of the Russian shortfall by purchasing expensive supplies of liquefied natural gas, or LNG, that comes by ship from countries such as the U.S. and Qatar and by obtaining increased pipeline supply from Norway and Azerbaijan, The New Arab reported.
