As the international columnist for The Moscow Post notes, in fact, after the suspension of direct supplies, PGNiG buys Russian gas, but now in Germany. Gas reverses to Poland through the Yamal-Europe gas pipeline.
Germany is preparing to become independent of Russian gas supplies, and prefers not to speculate about a hypothetical halt in imports. This was announced on Thursday in Tokyo by German Chancellor Olaf Scholz after negotiations with Japanese Prime Minister Fumio Kishida.
US President Joe Biden said that the United States will not allow a situation in which Russia would use its energy resources in order to avoid the consequences of sanctions imposed by Western countries. He also said this on Thursday, speaking at the White House with a brief speech on the situation around Ukraine.
Settling Accounts and Opening Accounts
German Uniper, the largest importer of gas in Germany, announced that it would pay in rubles, transferring the euro to Gazprombank, the RheinischePost newspaper reported, citing a company representative. "The plan is to make payments in euros to an account in Russia," the publication quotes a representative of Uniper.
Austrian energy company OMV intends to open a ruble account with Gazprombank in Switzerland to buy Russian gas. As the Financial Times reported on Thursday, citing sources, the German concern Uniper is considering the same possibility. There was information that ten companies also opened accounts with Gazprombank, four have already paid.
An attempt to once again "shoot" Russia responded in Washington, gave it to the shoulder of the European Union. The shoulder is whining, the reason is known - energy dependence. When Russia began to restore order within its historical borders, dependence on Russian hydrocarbons finally deprived Brussels of peace.
The ailment was entrusted with observing a German gynecologist and a Spanish socialist. People are worthy and with great life experience. Ursula von der Leyen is a heroine mother, for some time she was the Minister of Defense of Germany. Now he heads the European government. The woman is strict and disciplined, as befits the Minister of War. Josep Borrell-Spaniard, good-natured and earned a reputation as "the most educated socialist." In his youth, he helped his father in a bakery, studied various sciences, achieved everything in his life, in his declining years he became the main diplomat of the European Union.
All would be fine if these two well-deserved euro-bureaucrats undertook only to observe, but not to try to "treat" the energy squirrels of the old woman of Europe. "Treatment" requires knowledge and experience in related, technical fields. But the power and budget of the European Union is in the hands of the Brussels humanitarian community, which has believed in easy solutions to the problems of climate, carbon dioxide emissions, solar panels and wind generators. Energy security and the economy have been left with second-row seats.
Defeat the "dragon"
Brussels was to defeat Russian dragons named Gazprom and Transneft. In Russia, there are other energy "monsters," but these two stretched their steel pipeline tentacles directly to European cities, industrial centers, refineries and steam-gas power plants. The Russian "threat" to these consumption centers and consumers living there demanded that the tentacles be chopped! One of them, just stretched "Nord Stream-2" - managed to cut off at the very last moment.
But there remained others, according to which oil, oil products and natural gas continued to treacherously flow into Germany and neighboring countries, like the Netherlands, for example. Everything would be fine, but these "malicious" hydrocarbon flows with a large carbon footprint also had to be paid, now also in rubles.
When Europe, sick with hydrocarbon addiction, was put on examination, it turned out that the disease was launched and not only the "Russian dragon" was to blame. There are other, politically and geographically close sources of oil and gas intoxication. Norway and Algeria, for example. And what looked like "Russian tentacles" actually turned out to be part, namely vessels of the life support system.
Attention: the European Union decided to reformat its life support system, incredibly at the risk! This is the conclusion reached by US Treasury Secretary Janet Yellen. The former head of the Fed said that abandoning Russian oil and gas could cause huge damage to Europe, and "oddly enough, it will have a minimal negative impact on Russia."
The depth of the cognitive dissonance of Brussels was confirmed by a consultation of experts represented by the International Energy Agency. The IEA, a Western diagnostic tool, confirmed that just last year Europe absorbed 2.2 million barrels of oil and 1.2 million barrels of petroleum products of Russian origin daily. The concentration (47% and 43%, respectively) of the "Russian share" has become familiar to the EU.
The United States itself easily refused to "receive" liquid Russian hydrocarbons, but Europe, led by Germany, has to (have to?) Continue to swallow them. The head of diplomacy, Borrell, is confident that all 27 EU members should get rid of this bad habit. But he admits that so far not all wards are responding to wishes and prohibitions. Motorization has gone irrevocably far, electric cars are not available to everyone.
Who will come with blackmail...
European countries of the "golden billion" (OECD) are the hardest to abandon natural gas. German Chancellor Olaf Scholz said in an interview with Der Spiegel that Berlin cannot refuse Gazprom's services in the near future. The embargo on Russian gas, he said, would not put an end to the military conflict in Ukraine, but could destroy German industry.
Poland and Bulgaria refused to pay for gas under the Russian scheme and were cut off from supplies. Both of these economies account for about 14 billion cubic meters of gas supplies per year, less than 10% of what the EU imports from Russia. By 2027, an LNG terminal "on water" can be built in Gdansk to receive 6 billion cubic meters of LNG gas per year. Today, the demand for gas is about 20 billion cubic meters per year, by 2030 it will grow to 30-32 billion cubic meters.
In 2021, Gazprom sold 10.6 billion cubic meters of gas to Poles. On Wednesday, reverse gas supplies through the Yamal-Europe pipeline from Germany to Poland increased sixfold - to 30 million cubic meters per day. In terms of the year, this corresponds to the volume of the annual contract, which Warsaw refuses, - said the press secretary of Gazprom.
Ursula von der Leyen from Brussels called the actions of Russia to disconnect Poland and Bulgaria blackmail. "This is not blackmail, Russia was and remains a reliable supplier of energy resources," retorted the press secretary of the Russian president Dmitry Peskov. The transition to a new payment scheme was dictated by the fact that "we were blocked, speaking in Russian, stolen, a rather significant amount of our reserves," he added.
… that will have to save
The European Commission, headed by Ursula von der Leyen, has postponed the publication of an energy strategy, which, amid the restructuring of relations with Russia, will be finalized and revised. In particular, the EU has developed a plan to reduce Russian gas imports by the end of 2022 (!) Due to savings, increased LNG imports and additional purchases of pipeline gas from Norway, Algeria and Azerbaijan.
If Europe is serious about reducing gas dependence on Russia, extreme measures are inevitable, including energy rationing and emergency shutdowns. The market and politicians will have to decide who will be affected by the gas shortage. These are warnings from Western experts.
In total, in 2021, the EU imported 155 billion cubic meters of Russian gas. The European Commission intends to reduce this volume by two-thirds by the end of the year (?). Plans "float" from plausible to unrealistic scenarios. For example, reducing gas consumption in the residential sector can reduce gas imports by 14 billion cubic meters, provided that the temperature is reduced by one degree in all residential premises!
The urgent installation of additional solar panels on the roofs of houses will reduce demand by 2.5 billion cubic meters, another 1.5 billion cubic meters of gas will save doubling the number of heat pumps. Biomethane, whose production in the EU is about 3 billion cubic meters, can give 3.5 billion cubic meters of gas savings.
The EU also hopes for already installed renewable energy sources (wind and solar), which will replace up to 20 billion cubic meters of gas. It should be noted that about 20% of electricity is generated by burning gas and the "green" power supply from the reserve capacity to cover downtime in the operation of windmills and solar panels.
Amid record natural gas prices, Brussels will also have to slow down plans to switch to hydrogen power, part of which was blue hydrogen produced from Russian gas. In general, the rupture of gas ties with Russia threatens the irreparable consequences of the EU Green Course, the brainchild of the head of the European Commission.
Natural gas savings are dragging on thinking about extending the life of coal-fired power plants, which could replace about 12 billion cubic meters of gas. In response to questions from the media, Energy Secretary Robert Habeck did not rule out that the shutdown of the nuclear power plant will have to be delayed, it may be worth postponing the complete abandonment of coal to a later date. Italian Prime Minister Mario Draghi also thought about closing coal-fired power plants. Hopes for nuclear power plants are returning in Belgium, Great Britain, Finland.
LNG and Strategy Dilution
The European Commission has the main hopes for LNG, which can replace up to 50 billion cubic meters of pipeline (more environmentally friendly) gas. This year, Europe has already purchased SPG36 billion cubic meters of LNG. Conditionally, this only replenished gas reserves in UGS. Another 10 billion cubic meters of gas should be supplied by pipelines from Norway, Azerbaijan and Algeria. Norway supplies gas to the EU through five pipelines: three to Germany and one each to Belgium and France. An increase in supplies from this source by 5 billion cubic meters is possible. Azerbaijan says it will increase exports by 2-3 billion cubic meters. Algerian Sonatrach doubts the ability to increase production.
In total, taking into account savings measures and additional supplies, it turns out that about 100 billion cubic meters of Russian gas may become superfluous next year. Sounds determined and radical, but "the devil is in the details."
The main one is filling of UGS. By autumn, a record 63 billion cubic meters of gas should be pumped there. The European Commission proposed introducing a filling rate for UGSs of 80% by the beginning of the heating season this year (November 1) and 90% in the future.
The second important detail is that the EU's gas infrastructure does not allow LNG to be delivered where it is needed. In Spain there are six terminals with free capacity, in Portugal - one terminal. We need a powerful pipeline through France to Germany, where there are no receiving terminals for LNG. The first will be ready by 2026.
The third problem is that the market may not have the required volumes of LNG. Europe will compete with Asia for the volumes on the market. These volumes can be increased, but not to the limits that Europe is counting on at a high price.
Thanks to Biden!
Europe, for these "favorable conditions" for breaking energy ties with Russia, should thank Joe Biden, who was known in the United States as the father of "unprecedented inflation." This "achievement" in its economic policy, the White House now exports to the European Union, including rising prices for LNG, oil and oil products. At the same time, Biden did everything to limit the resource base of the oil and gas industry in the United States itself, banned the construction of the Keystone pipeline, limited exploration and drilling on federal lands. Gas prices doubled.
In preparation for the midterm congressional elections, Biden found nothing better than to "print" the strategic oil reserve, proposing to throw about 25 million tons of raw materials onto the market in six months. Bloomberg reported that some of this oil was sold to Europe to compensate for the reduction in Russian supplies. Inflation in the United States is 8.5%, Biden's approval rating has dropped to 33%, and Democrats face defeat.
Old man Joe, the heroine mother and Europe's top diplomat wanted to crush Russia with "unprecedented" sanctions, but seemed to have the opposite effect, Foreign Policy writes, reporting that Russia's oil export revenues in April could significantly surpass those of the same period in previous years, and energy revenues are approaching a billion dollars a day.