Europe’s energy crisis continues to plummet over the next 10 years. A severe winter could lead to severe energy shortages and the closure of large parts of the economy.
While the main focus is on the current role of the Russian crisis, a new narrative may soon make headlines. Shockingly, the Dutch government has indicated that Groningen gas, Europe’s largest offshore gas, could be partially and temporarily shut down in the face of a major supply crisis. The term “Dutch disease” is a paradox of rent-seeking, which has suffered from a wealth of resources, and may have a new meaning when it comes to energy transfer risks and current market forces. According to Johannes Atema, director of Groningen’s operator for the Netherlands, Ardoley Matshapji (NM), Dutch Minister Steve Block said he was considering opening Groningen’s field, particularly five wells, especially Sloter. Field. Reopening the farm, even in an emergency or energy crisis, is politically controversial.
Until recently, the plan was to shut down Groningen in 2023, ending significant gas production and exports in the Netherlands.
The Dutch media are speculating that Mr Block will ask for the reopening of the Groningen field. Given the current state of affairs in the European energy sector, Groningen is still needed. The ongoing power outage could have serious repercussions for the economies and security of EU member states by changing the narrative of Brussels and other European capitals.
The lack of natural gas supply in Russia (or to provide more political demand), the rapid rise of Norwegian gas or other imports are threatening European energy. At the same time, the closure of many energy-intensive industries in Europe, such as fertilizers, chemicals, and aluminum, is on the table.
Can related oil pipelines solve the US water crisis? Political leaders must face high energy bills or direct impacts of potential energy shortages for consumers and the industry. In the coming elections, both could lead to protests or political landslides. Concerns about the energy crisis are being widely discussed, but there are no real solutions other than lower taxes. Due to high energy costs, the available registration fee of $ 100 million or $ 250 per barrel is bad news for politicians, especially in the Netherlands, Germany, France and the United Kingdom.
However, it is unclear whether European politicians are aware of the role their own policies have played in creating this crisis. Even with a partial restart in the Groningen field, which could alleviate some of the pain in Western Europe, there is still a serious problem that needs to be addressed.
The instability entered the system by opening up the gas market for liberalization, without providing the necessary equipment to the parties, and pushing for a space market. Geopolitical forces are still playing with much of the support of their governments and European suppliers.
At the same time, when long-term contracts with Russia have been thrown out of the window, many do not understand that this means handing over full market powers, such as Gazprom, to NOC. Putin is respecting the fundamental principles and the simultaneous transfer of prices, knowing that the key to European markets is given. Meanwhile, Europe has not been able to adequately duplicate supplies.
European leaders need to rethink Russia’s supply of gas and the role of North Strand 2, which is still under threat from US sanctions and Eastern European opposition.
Russian President Vladimir Putin, however, seems to have all the cards when it comes to natural gas in Europe. Consumers and industries may face unsatisfactory winters if Europe does not have abundant natural gas supplies. The European Gas Supply Diversity Strategy is not only the result of EU strategies and guidelines, but also the failure to realize that it will be the backbone of the next power supply transition, the fall of hydrocarbon and the full investment in renewable energy. The European economic system is still hydrocarbon.
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The present situation shows one major fact of life, the success of the transfer of power is not based on one-sided approach. The market has not been stable due to its reliance on innovation, but politicians and others have refused to accept it. Recognizing that future hydrocarbons, including coal, would play a significant role in the European energy market, he had to maintain stability.
At the same time, European politicians must acknowledge that the absence of hydrocarbons is not only a threat to energy supply, but also a problem for the hydrocarbon economy. It is not yet fully understood by many, but without hydrocarbons, especially natural gas and oil, food and other primary sectors will be hit hard. Fertilizer and steel companies’ initial closures have already been reported.
Even Brussels, London, Berlin, and The Hague must begin to change their approach to energy and the economy. Politicians should start listening to market analysts who have warned of disruptions in energy markets. At the same time, Europe’s long-term energy strategy must invest in renewable energy and recognize the position of hydrocarbons as the backbone. Investments in storage, various supplies and domestic production are crucial. Without them, supply companies like Putin’s Russia would hold all the cards.
By Cyril Widdershoven for Oilprice.com
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