Guest Post by Martin Armstrong
On August 1, the European Commission will begin to reduce its demand for gas with no alternative in place. Unsurprisingly, our computer states that a Panic Cycle will begin in August or September and go into Q1 of 2023. Europe must reduce its gas consumption by 15% (45 billion cubic meters). In comparison, Russia delivered 150 billion cubic meters to the EU last year. Russia’s largest gas provider, Gazprom, has threatened to cut off Europe from gas entirely. Europe has no alternative solutions at this time. Therefore, they’re implementing a “Save Gas for a Safe Winter” plan in Brussels.
Commission chief Ursula von der Leyen claims that all member states will suffer from their proxy war with Russia, albeit some more than others (e.g., Germany). “It’s important that all member states contribute in the saving, the storing and are ready to share gas,” she said. Let us see how friendly this bloc really is when it comes to sharing an essential resource in limited supply.
Member states are now required to submit energy plans to the Commission by the end of September and update plans every two months until March 2023. There is proposed legislation that would allow the Commission the authority to declare a “Union alert” and impose mandator gas caps on member states.
The bloc plans to fill its gas storage capacities to 80% by November, but that may be a lofty goal. European Commissioner for Energy Kadri Simson expressed pessimism in interviews. “We risk ending this winter with empty storage, which will be impossible to refill in time for the next heating season,” she warned, as this crisis is only beginning. Simson and others are calling on the public sector to reduce demand.
This will fall back to the citizens, who will be asked to limit their consumption and abandon comforts for a proxy war they never voted on. Frans Timmermans, the Executive Vice-President of the Commission in charge of the European Green Deal, has already suggested people switch off lights and electrical appliances and reduce AC/heater usage. No one will stop these politicians from flying around on their jets, surrounded by bodyguards in numerous SUVs, while they make the people suffer for their poor policies.
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Slowly at first, then all at once. Pay no attention to the man behind the curtain (Soros)!
Chancellor of Germany, Private O’Laugh Shultz, will be lucky to still have a job come the new year.
So, Interesting fact–Russian gas represented 45% of European gas use last year. Gas sold to Europe by Russia, represented 81% of their gas exports. Seems like a problem for BOTH of them….Understand that the vast majority of Russian gas infrastructure is geared to support European sales and you can’t simply convert your entire gas infrastructure over night. What are they going to do, put it in 1 lb bottles and sell it at Walmart?
Yeah, the Russians are in real pickle!
Accordingly, their economy will collapse any day now…
That’s not what I’m saying at all. That’s equally as stupid as saying the Russian economy will collapse any day. However, I’ve never seen a seller, in any type of market transaction, that lost 81% of its’ market, with specialized delivery systems geared to that specific client base, that was just hunky dory going forward. I know reality intruding on political beliefs can be uncomfortable.
Well the infrastructure problems are being remedied. It takes time to rejig things. Probably why Putin didn’t invade, or did his special operation, or whatever it is being called today, in 2014 in The Ukraine. Waiting until now instead to rain on the parade.
The whole point of the belt and road initiative, or BRI for short, was to reorient the resources of the Eurasian landmass from pointing west to pointing east towards China and south towards the Indian subcontinent. The key to completing both plans are the Stans and Iran. There is going to be some pain but the work is under way.
In the meantime Russia is driving the bus. The moar they cut back the gas supply to Europe, the moar the price increases in EuroLand and of course for us. Not exactly a win for Putin but neither is it a loss.
but no worries for the EU.
there’ll be a ration or two
and freezing to death
well that can’t happen
they still have youtube
Now with some breaking news
here is a brief musical interlude..
The cost increases for us, true,- but the MONEY stays here. WE, not Russia, are the #1 natural gas exporter. 68% of those exports- went to Europe.
https://www.reuters.com/business/energy/us-lng-exports-europe-track-surpass-biden-promise-2022-07-26/
The guys in the Permian are all going to be driving new F250’s next year! Belt and Road investments have been cut back dramatically as the Chinese deal with their own financial issues like the Henan bank runs…. Not one damn scoop of dirt has been dug on their big Nicaraguan Canal Project- the company is shut down, bankrupt. They are years away from being able to fully absorb Russian energy production or even accessing it.
So, while the Russian economy IS NOT going to collapse- neither is Europes or the U.S’s- at least over this issue. The truth of sanctions etc…for each side- is somewhere in between, despite what the Sino Soviet Cadre and Ukrainian War Hawks would have the rest of us believe. Think for yourselves- oh, and DATA, actual numbers, might be a good thing to look at when doing so…
Well there is a flaw in the logic there Will. The money might stay here, but it won’t stay the average joe’s household budget. It hardly matters to the Six Packs out there whether the money is counted in the Kremlin or on Wall Street.
Oh! And Europe’s economy is going to collapse. Well at least the one they have now. Ten years from now it will be a nice place to visit, sure. Snap a few pictures of the architecture and former industries. Because if that industry is forced to rely on LNG, well, there will be no Mercedes, BMW and BASF. It is all over but the crying. But at least carbon production will be reduced and climate will be saved.
And reducing amounts of gas the Euros buy does not hurt the Russians as much as it does themselves. The people in Brussels are fucktards. In their defense they can’t help it. Them being communists/socialists after all, and because of that, don’t even have a grade skool understanding of how markets, supply and demand, work. When supply reduces the price inevitably will go up. It is a basic law that Adam Smith wrote about a couple hundred years ago. Understandable really, when your heroes and idols are Hitler and Stalin, Marx and Lenin, would it be any other way..
Just look at graph of price since the the start of the invasion or special operation or whatever it is being called today…..
Notice how price has jumped starting in March. So even if the Russians are forced to flare wells in order to not damage the gas fields they will still make loads of money until the Power of Siberia and other routes are complete.
Because you see, much of the gas flowing to Euroland flows from the Yamal field. Looking at the map it seems obvious to me that there is a whole lotta hurt coming Ursula Vander Crazy’s way. Because when that gas-line is complete, and that is not far away, the industry will be hollowed out in Germany, the Europeans will be fucked six ways from Sunday. No jobs means they cannot pay for heat at any price. And that, my friend, is guaranteed.
Fact is that LNG is expensive. The Russians can always outbid on price. The problem for the Eurozone is Putin and his cronies went and changed the rules to the game. Now any gas sent thru the NorthStreams, 1 or 2, will be close to the same price as the gas being sent from over the seas..
Because for the Eurocrats unfortunately Marxism does not overcome the laws of thermodynamics. And yeah, for sure, the heat will stay on. But for average joe it ain’t gonna be pretty.
https://player.odycdn.com/api/v4/streams/free/gazprom-second-turbine-needs-repair,/6ded299a21a4216e543463d4106e9983c7addc07/b29bad
The time has come for Greta Herself to step forward, and lead the EU into the promised land of peace and plenty. Or at least release a fresh supply of her own anthropogenic Hot Air.
OMG Will- Every time I have posted that Merika was to be the next Saudi Arabia of LNG, nobody believed me. Praise be da Lawd, I have a convert. And yes, it will mostly go to Europe for…..( get ready for the downers) powering hydrogen fuel cells in the not too distant future.
LNG man, LNG…..it’s the future and we f’n own it.
Yes, the excessive trading deficit Russia is running right now, 5 months after the begin of the SMO, shows reality is intruding massively… or some day will.
Putin is continuing to supply gas to those who have threatened him while he sets up a delivery system for new customers. Once the new delivery systems are in place, it will be Hasta la Vista, baby for Euroland. Euroland has the same opportunity to set up new suppliers and delivery systems, but having bought into the Green Raw Deal will just do without as long as they can.
Pipelines are relatively easy and quick to build. ( Compared to LNG receiving ports and infrastructure) India, and China are hungry for cheap energy and will be eager to step in and replace Europe as Russia’s major customers. In the mean time, Russia is more than making up for any lost revenue in gas sales with inflated prices for oil. US production was keeping a lid on energy prices, but Biden screwed that up bigtime.
You know what is going to happen but it’s pedal to the metal Ala Thelma and Louis. Hang on tight just ain’t gonna cut it.
Like us, they’ll get what they fucking deserve.
How soon until Ursula Vander Crazy is demanding rationing with a helpful app like they are trying to implement in Sri Lanka..
You did this to yourselves.
The Europeans are being played big time. All economies prosperity is tied to the cost of energy. Europe benefited greatly from the cheap price of Russian energy, and will never see the level of prosperity they had in recent years again in the foreseeable future.
Sure, if they invest hundreds of billion, they do not have, in LNG plants, then they can purchase much higher priced US LNG…. in a few years.
It is going to be a cold winter, especially in Germany.
This guy…SMH!
He is always on about his computer, and it always just happens to have predicted some version of current events, but always in the most vague fashion, and he only lets on after the fact.
How much have we heard about unrest, energy shortages, and international conflict over the last decade or two, but he is always in there with “Socrates” saying: “See, See?! – I told you! er…telling you now!”
Maybe they should just strap a pipeline to his mug. He’s been venting quite a bit of gas over the years!