It’s freezing. Can Europeans cross this threshold?

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Author: Tan Zhu source: official account: Yuyuan Tan Tian wechat ID: yuyuanantantian

When the weather turns cold, Europeans may feel the coldness unprecedented:

After the three-day overhaul, Gazprom announced that due to multiple equipment failures, the “beixi-1” natural gas pipeline would no longer resume gas supply on schedule.

On August 31, the “beixi-1” natural gas pipeline was overhauled and gas supply was stopped again.

After Gazprom announced the suspension of gas supply, the price of natural gas in Europe rose by nearly 40% for nearly a week.

Whenever the flow of the “beixi-1” natural gas pipeline decreases, it is a turning point for the jump in natural gas prices in Europe:

From June 16, “beixi-1” gas supply was reduced to 40%, and on June 15, European natural gas prices rose by 24%;

Since July 27, the gas supply of “beixi-1” has been reduced to 20%. On July 25 and 26, the natural gas price in Europe has increased by at least 10%.

The valve switch of “beixi-1” is stirring the nerves of Europe.

What’s more, this gas stoppage is even closer to the coming winter, and a crisis is brewing in Europe.

With winter approaching, Europe’s crisis is not just a lack of gas.

The European Union’s natural gas reserve rate is an important measure of whether Europe can survive the winter smoothly.

The data show that on August 30, the EU’s natural gas reserve rate had reached 80.4%, and it was advancing at the normal reserve rate in previous years.

This means that the EU has fulfilled its gas storage target at this stage ahead of schedule and over time.

The European Union proposed this year’s gas storage target also after the escalation of the conflict between Russia and Ukraine and the first round of soaring natural gas prices in Europe. At that time, the European Union’s natural gas reserve rate was less than 40%, and there was a trend of reduction for a time.

After assessing the risk of interruption of natural gas supply from Russia in winter, the EU passed an agreement requiring that the natural gas reserve rate of EU Member States should reach at least 80% of the total capacity before November 1 this year.

Germany, which imported half of its natural gas from Russia in the past, now has a reserve rate of 84%. Recently, the executive director of the European Trade Center, a natural gas market operator, also predicted that there would be no national natural gas shortage in Germany and that Germans would not be frozen this winter.

But the risk remains – regional shortages cannot be ruled out.

This is even more true at the EU level. Although the overall European Union is up to the standard, the gas storage of Italy, Hungary and other countries has been lower than the average level in the past.

| European Commission President von der Leyen topped the news that the EU’s natural gas reserve rate reached 80% on social media. The photos from left to right are: Prime Minister of Latvia, Prime Minister of Estonia, Prime Minister of Denmark, Prime Minister of Finland, President of Lithuania, von der Leyen.

Due to the reduction of Russian gas supply, EU countries must find alternatives. After the escalation of the conflict between Russia and Ukraine, EU Member States began to run around outside the European continent to buy natural gas:

In April, Italy frequently sent high-ranking officials to Africa to find natural gas supply sources, and signed cooperation agreements with at least three countries;

| in May, Germany followed Italy. German Chancellor Scholz opened his first Africa trip, visiting three countries in succession;

In August, French President macron visited Algeria, where relations were still deteriorating last year. The two sides began to negotiate to increase the natural gas supply from Algeria to France by 50%;


When EU countries start to act separately at the same time, this is no longer a simple supply and demand problem, but will trigger a butterfly effect.

This is the same reason as the food crisis. If the grain production is reduced by 20%, the grain price will not only rise by 20%, but will be infinitely high – everyone is worried that they will become the one who can’t eat the grain. Under the rush, the grain price will keep rising.

This is also directly reflected in the transaction price of natural gas. Now, take the transport ship loaded with liquefied natural gas as an example. The cost of exporting from the United States is 60 million US dollars per ship, but the transaction price in Europe is as high as 275 million US dollars per ship.

At the same time, the benchmark Dutch natural gas futures price, known as the “weathervane” of European natural gas prices, exceeded 300 euros / MW in August, seven times that of the same period last year, and more than 10 times higher than the average price before the energy crisis.

In March, Biden went to Europe to attend the NATO special summit, G7 summit and EU summit, promising to export more liquefied natural gas to Europe

And it is not only the price of energy itself that has been raised.

Due to the tight transportation of liquefied natural gas, as long as there is an empty ship, it will be booked immediately. According to the data of the LNG freight price evaluation agency, the price of LNG carriers alone is more than twice that of the same period last year.

The rental price is high, and the orders for shipbuilding have been full. South Korea is the world’s largest producer of liquefied natural gas carriers. Shipyards here have no spare capacity to undertake new orders before 2027. In the case of limited capacity, the cost of new ships has increased by about 26%.

The upper and lower chains of the LNG market have all entered a situation of mutual price hikes.

You should know that these extra costs have to be borne by the buyer, the EU countries themselves. If there is no tacit agreement within the EU on unified bid and unified acquisition, the leverage of the global natural gas market will be “pried” to the European market.

| Britain launched a protest against “freezing profits, not people”

Since the EU countries are “fighting their own battles” on the issue of “open source” and can not coordinate and unify, the EU has decided to find ways to intervene from the perspective of “saving money”.

More than a month ago, the EU proposed a new political agreement. According to this Agreement:

In order to ensure the security of energy supply in the EU, in the next eight months, EU member states need to voluntarily reduce their natural gas demand by 15% on the basis of the average consumption in the past five years. The saved natural gas surplus can be used for adjustment and supplement among countries.

However, after seeing that the EU countries “hoard gas” at all costs, this sign of self-confidence forced the EU to add a half sentence after “voluntary”:

If there is a shortage of natural gas supply, the EU will take compulsory measures to reduce natural gas demand.

According to the explanation of the EU, the reason for doing this is precisely because of the fear that the disharmony and contradictions among EU Member States will distort the EU’s unified market.

Whatever you fear, the EU market is experiencing unprecedented chaos.

The word “coercion” has also aroused great opposition from EU Member States, and some countries have directly questioned that the EU is suspected of “overstepping its authority”.

Dong Yifan, an expert on European economics at the China Institute of modern international relations, told me that according to the EU’s operating mechanism, it is not in line with EU law for the European Commission to unilaterally issue a policy and then require other countries to enforce it without authorization from all countries


From the standpoint of the EU, the original intention of the agreement is to let EU countries hold the bottom line of EU energy security with the smallest possible collective concessions.

However, from the standpoint of EU Member States, the policies issued by the EU can not match their national conditions – each country depends on Russian natural gas differently, and the energy crisis caused by the conflict between Russia and Ukraine is not a crisis for some countries.

Spain’s natural gas source does not depend on Russian pipelines. Spain’s deputy prime minister and Minister of ecological transformation said that he was not willing to pay an economic price for non Spanish problems.

Hungary, the country with the highest dependence on Russian natural gas among EU Member States, achieved 80% and cut 15% of its energy consumption, which could not solve Hungary’s energy crisis at all.

The Hungarian foreign minister bluntly criticized, “this is an unreasonable, meaningless, unenforceable and harmful proposal.”

The European Commission is not flattering at home or abroad. However, in the face of a crisis, the European Commission always has to show its role, which is why the EU does not hesitate to cross the border and also proposes this policy.

Before the meeting to finalize the final version of the agreement, the Spanish representative and the German representative had a point-to-point exchange

Two weeks later, the 15% throttle agreement was passed. But the final version is like this:

When there is a supply shortage, member countries should reduce their natural gas demand by 15%. At the same time, in view of the special circumstances of different Member States, in order to improve the effectiveness of the implementation of the agreement, the EU has granted some or all of its obligations to some member states.

| the island countries Ireland, Cyprus and Malta are not connected to the EU natural gas network. Even if they save natural gas, it can not be used by other countries, and the obligation to reduce expenditure can be completely exempted;

| the Baltic countries, Estonia, Latvia and Lithuania, which are close to Russia, have not officially transferred from the Russian power grid to the EU power grid. Forced gas restriction may lead to direct interruption of power supply, and their obligations can also be exempted.

| countries whose natural gas reserve rate exceeds the target, or whose energy structure is heavily dependent on natural gas and whose natural gas consumption has increased significantly in the past year can also be exempted from the obligation. This article can cover many countries, including Czech Republic, Denmark, Poland, Bulgaria, Greece, Slovakia and other countries.


In total, the EU has 27 member states, and the countries that can receive special care together account for about half.

The policy was launched, but it was a severely shrunk version.

Evaluate this shrunk agreement from different perspectives:

| for the EU as a whole, as long as any country does not implement the agreement according to the agreement, the agreement will be meaningless. It is not only that the preset goal cannot be achieved, but that in the face of a crisis, once someone chooses to leave the collective and protect himself, it will plunge the collective into a vicious circle of inequality rather than scarcity;

| for any EU member state, it is entirely hoped that the other 26 member states can make concerted sacrifices in the face of the crisis, and the risks and costs ultimately borne are incalculable.

This gives rise to a very embarrassing situation. The decisions made by the EU are not beneficial either from the perspective of the EU as a whole or from the perspective of individual countries.

It can be said that the EU’s compromise mechanism for joint decision-making has fallen into a prisoner’s dilemma – when everyone is greedy for the individual optimal solution, everyone can still reach the suboptimal solution, but in fact, only the most optimal solution can be reached.

This fundamentally violates the logic of EU development.

Xu Qinhua, vice president of the national development and Strategy Research Institute of Renmin University of China, told me that from the European Coal and steel community, to the European Economic Community, and then to the European Union, all Member States have

More connections are made step by step to achieve the goal of “heating together”.

By choosing to join the EU, member states themselves want to use the strength of integration to make up for the natural weakness of the single strength of each member state.

This is also the fundamental reason why the EU was established:

The underlying logic of the EU’s decision-making, which grew up in peacetime, is to make an upward choice – to maximize common interests, move forward, and use a unified market to make up for the insufficient size of Member States.

The establishment of the European Coal and steel community, the predecessor of the European Union, is a win-win politically and economically for all Member States: on the one hand, it can expand the political influence of each member state, especially the defeated countries in World War II; on the other hand, it can invest its own resources, industry and other potential in a larger unified market.

At that time, Europe had a real dilemma after being nibbled and consumed by war. If it wanted to return to the pole of the international political stage, it naturally became a necessary choice for Europe to rely on each other and learn from each other.

| in 1950, the then German Chancellor Adenauer (right) received the visiting French Foreign Minister Schumann (left). After the war, France and Germany reconciled and reached an agreement on coal and steel production and reserves, which is the foundation for the establishment of the European Coal and steel community

Stimulated by the resumption of war in the European continent, EU member states have long abandoned the original intention of European regional integration. They dare not hand over their “cards” to collective organizations, but start from the bottom line thinking and try to find the “best solution” for themselves.

One result is that the EU’s common policy can only focus on how to stop losses, not how to make Member States better. That is to say, the EU’s common policy does not take the minimum common multiple of the interests of each member state, but the maximum common divisor.

The fragile trust built up by EU countries through integration after World War II was shattered in the face of crisis. There is a key factor behind this – the United States.

After the end of World War II, the United States has been trying to “operate” in the European continent, treating different countries in Europe differently through the closeness and closeness of interests. In the process of interaction between the European Union and the United States, the orientation of each member state is different, which will also lead to its failure to form a unified will to the outside world.

The different affinities between EU Member States and the United States have given the United States an opportunity to penetrate the wedge into the trust foundation between EU countries.

Yin Jianbu is not far away. When the “beixi-1” natural gas pipeline fails to supply gas, will EU countries remember how the “beixi-2” natural gas pipeline, which has been shut down before, was manipulated by the United States to split the EU.

You should know that for a long time before, there was basically no trouble in the natural gas trade between Germany and Russia.

According to the United States, “beixi-2” will threaten Europe’s energy security. On this basis, the United States has repeatedly encouraged some EU Member States to oppose the construction of “beixi-2”.

Under such provocation, an energy cooperation project eventually became a victim of geopolitics.

This is only a microcosm of US involvement in the EU.

Moreover, the United States has further divided European countries through various circles.

It is worth noting that on the same day that the Russian side announced that the “beixi-1” pipeline would not be resumed on schedule, the G7 countries led by the United States just announced that they agreed to impose a price ceiling on Russian oil.

Following oil, the European Union is considering setting a price ceiling for Russian natural gas. Russia responded that once the EU made such a decision, Russia would no longer supply natural gas to Europe.

I don’t know how those EU countries still busy with natural gas feel after seeing these two news?

Compared with the shortage of energy, today’s EU pays a greater price – the failure of collective decision-making.

Winter is approaching, and the retrogression of European integration is a bigger crisis than the shortage of energy.

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