As the energy crisis continues, Europe is warning that its citizens need to be prepared for a total gas shutdown from Russia. While their storage sits at 88%, 8% higher than their original goal, serious concerns still linger. The French strike has taken 60% of its refining capacity offline, planned maintenance will shut down another 1.5 million barrels per day, and the EU is preparing to ban Russian imports staring February 2023. [1] Europe’s strategy was put to the test as cold autumn weather roared across the region; private usage increased by 14.5% above their 5-year average. The EU had been conforming to about 20% less usage from 2021 up to this point. [2]
In it’s first test, well ahead of a predicted harsh winter that’ll likely climax closer to January, the EU failed its energy conservation effort. Their consumption under the first cold snap was equal to 2021 usages. The EU planned to be 20% less than 2021 and in the event of a total gas cut by Russia, they would need an additional cut somewhere around 13% to survive winter this year. Prices are expected to remain elevated and/or increase as supplies tighten. The EU is banking that the elevated/higher prices will curb demand.
The EU will need some luck to navigate the energy crisis this winter season. Even a mild winter could ruin Europe’s energy plan. Diesel and natural gas inventories will be heavily monitored, strikes will be negotiated, and thermostats will be turned down. The world will watch and work to aid Europe in desperate times this winter. Despite all the ideas, solutions, problems, and conversation surrounding this issue, renewables have not entered the conversation. The real, simple, only realistic answer to averting this energy crisis again in the future is US LNG.
[1] https://oilprice.com/Latest-Energy-News/World-News/Europes-Diesel-Crunch-Is-Set-To-Worsen.html
[2] https://www.euronews.com/my-europe/2022/10/03/energy-crisis-europeans-must-lower-thermostats-to-prepare-for-russia-turning-off-gas-suppl
