Commentary
Vladimir Putin is cutting gas exports to Europe, which threatens everything from grandma’s stove-cooked schnitzel in Germany to electric power plants in Britain.
Blackouts in the dead of winter could be a reality that many Europeans face in just a few months. American natural gas (LNG) exports might help our friends across the pond and produce jobs and profit for the American economy.
Otherwise, Europeans could get very cold this winter. According to energy analysts cited by the BBC, “a prolonged outage will raise concerns over the ability of the EU to build enough storage going into the next heating season.”
On June 17, Russian gas flows through Nord Stream, its primary conduit to Europe, slowed for the fourth straight day to just 55 percent of the rate from earlier in the week.
France has gotten no Russian gas since June 15. Germany’s Uniper SE got just 40 percent of its requested gas from Russia’s Gazprom. Italy’s Eni got half of its request. Slovakia got less than half its request through Nord Stream. Austria has reported major shortfalls in its receipt of Russian gas.
Several countries that refused to pay for their gas in Russian rubles—including Bulgaria, Denmark, Finland, the Netherlands, and Poland—have been completely shut off from their Russian gas supply.
The European Union sources 40 percent of its natural gas and 27 percent of its oil from Russia. Europe pays approximately $430 billion for the imports.
In response to Putin’s Ukraine invasion, the European Union has banned all oil imports from Russia by 2022.
“Russia is punching back against European sanctions and military support for Ukraine, targeting Europe’s ability to power its economy,” according to The Wall Street Journal.
“The continent has long relied on Russian gas to generate electricity, fuel factories and heat homes—a vulnerability the Kremlin is now exploiting,” the report said.
There may also be an economic motive. Germany accuses Gazprom of an attempt to unnaturally increase prices through the unprecedented supply reduction.
Households and businesses in Europe are paying the price, literally, of sky-high inflation led by energy. Europe can’t quickly replace the abrupt loss of supply, which threatens a complete cutoff that would be disastrous, if not life-threatening, during winter.
LNG in Europe is now approximately $131 per megawatt-hour, over four times the price in summer 2021. Just over a week ago, its price rose 50 percent.
Italy is considering declaring a “state of alert” over the lack of gas if Russia continues the supply crunch, according to Reuters’ government sources. That would lead to legal measures that reduce consumption, such as rationing gas to some industrial users, increasing energy production at coal power stations, and seeking gas imports from alternate suppliers.
The United States could be one of those suppliers, which would be a boon to the American economy.
But eventually, Europeans should, for their own good, attain energy independence. They could do it with a mix of green energy sources, including wind, solar, hydro, and nuclear. But until then, Europe will need to shift its oil and gas imports from an unreliable and aggressive Russia to more reliable and friendly sources, like the United States.
For LNG, that will also require constructing new port and storage facilities.
Europe’s foreign policy should never again be vulnerable to threats from Moscow that could threaten lives with electricity blackouts, or the European economy with astronomically high energy costs.
Recent anti-market proposals in the United States to ban LNG, crude, and diesel exports to decrease the price for U.S. consumers should be rejected. They won’t work in the long run, as energy markets are global. They will also disincentivize the investment we need today to expand American oil and gas drilling and refinery capacity.
That will bring jobs and boost our economy, which is needed to compete with the enemies of democracy in Moscow and Beijing. And we should be better friends to our democratic allies in Europe by exporting energy to them during their time of need.
But we should also ask that Europe do more in the long-term against the persistent threats from Moscow and Beijing. The United States and Britain have shouldered most of the burden of helping Ukraine and Taiwan, for example. Germany, in particular, should do more, including by increasing their defense spending to the required 2 percent of GDP for NATO.
A stronger European defense will better deter Russia and allow the United States to refocus on the rising threat from the Chinese Communist Party.
Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.
