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Germany plans to introduce a levy for all its gas consumers beginning in October as the government looks to avoid a wave of collapsing gas-importing and gas-trading companies amid record-high natural gas prices, a new bill seen by Reuters showed on Thursday.

Russia is further reducing flows via Nord Stream this week, to just 20% of the pipeline’s capacity, days after restarting the link at 40% capacity after regular maintenance.

The German government has already intervened to rescue energy group Uniper, Russia’s single largest gas buyer in Germany. Uniper—and many other German gas traders and suppliers—have been reeling from reduced Russian supply and soaring prices of non-Russian gas. Germany and Uniper agreed last week on a $15 billion bailout package, including the German government taking a 30-percent stake in the company and making more liquidity and credit lines available to the group.

Under the plans of the government, all consumers of gas, including households, will have to pay an additional levy, which will go to support Germany’s gas importing companies, which struggle with a lack of Russian gas and sky-high prices of non-Russian alternatives. The details of the bill are set to be announced next month.

Households and industrial consumers are expected to pay the levy through September 2024, according to the draft Reuters has seen.

“One doesn’t know exactly how much (gas) will cost in November, but the bitter news is that it’s definitely a few hundred euros per household,” German Economy Minister Robert Habeck was quoted by Reuters as saying on Thursday.

Marcel Fratzscher, president of DIW, the German Institute for Economic Research, told Düsseldorf’s Rheinischen Post newspaper that German households should prepare for at least tripled costs of heating on gas. The levy should be accompanied by a relief package for lower-income households, otherwise the new charge could lead to a “social catastrophe,” Fratzscher added.

EU Prepares Public For Winter Gas Siege

July 28, 2022

EU Prepares Public For Winter Gas Siege

European Union policymakers have started to prepare the public for siege conditions this winter if gas supplies from Russia are completely cut, an effort to demonstrate diplomatic resolve as well as avoid panic later in the year.

In recent weeks, officials from Germany and other EU member states have begun to talk openly and urgently about the need for immediate reductions in consumption in advance of the peak winter heating season.

They have also started to plan publicly for compulsory allocation, including rationing and prioritization among industrial users, as well as sharing among member states in the event there is not enough gas to supply everyone.

The stated reason is to accelerate the accumulation of inventories over the remainder of the summer to ensure European countries enter the winter with the highest possible inventories.

In reality, inventories are rising relatively rapidly and are already above the long-term seasonal average in most member states and across the region as a whole.

Inventories across the EU and the United Kingdom (EU28) stood at 751 terawatt-hours (TWh) on July 24 compared with a ten-year seasonal average of 698 TWh.

EU28 stocks were rising at a rate of 5.11 TWh per day in the seven days to July 24 compared with a ten-year seasonal average of 4.61 TWh.

In Germany, the largest stock holder, inventories of 161 TWh were above the long-term average of 145 TWh, and rising at 0.6 TWh per day, compared with a long-term average of 0.72 TWh per day.

On current trends, the European Union as a whole, and Germany in particular, are already likely to enter the winter with above average levels of gas in storage.

The problem is that it will not be enough if pipeline supplies from Russia are cut completely.

EU storage is designed to cope with seasonal swings in consumption not to withstand a war-like strategic blockade.

…click on the above link to read the rest of the article…

BASF Prepares To Slash Ammonia Production In Germany Amid Worsening NatGas Crunch

July 27, 2022

BASF Prepares To Slash Ammonia Production In Germany Amid Worsening NatGas Crunch

German chemicals company BASF SE paid an extra 800 million euros ($809.5 million) to keep its plants operating in the second quarter compared with a year earlier amid skyrocketing natural gas prices. The impact of high energy prices has forced the company to make a difficult decision: slash the production of ammonia, which could have potential consequences for farming to the food industry.

“We are reducing production at facilities that require large volumes of natural gas, such as ammonia plants,” BASF Chief Executive Martin Brudermuller said in a conference call after an earnings report.

Brudermuller said BASF would tap external suppliers to fill the deficit as German plants reduced output. He warned about potential supply disruptions that could boost fertilizer costs for farmers.

Reuters details how ammonia plays a critical role in manufacturing nitrogen-based fertilizers, plastic-making, and diesel exhaust fluid. A byproduct of ammonia production is high-purity carbon dioxide (CO2) which is heavily used in the food industry.

The news of BASF reducing ammonia production because of soaring NatGas prices comes as Russian state-owned energy producer Gazprom PJSC is expected to halve supplies via Nord Stream 1 to Europe to about 20% today. EU member states agreed Tuesday to reduce NatGas demand by 15% over the next eight months, though countries like Germany, without any liquefied natural gas (LNG) port terminals to replace Russian pipeline NatGas, might have to make more considerable sacrifices.

Benchmark NatGas prices in Europe at the Dutch TTF hub hit their highest level since March. Prices have shot up 35% in a week, over 200 euros per megawatt-hour (MWh), as Putin turns the screws on Europe by reducing pipeline capacity to Europe.

“Chemical companies are the biggest industrial natural-gas users in Germany, and ammonia is the single most gas-intensive product within that industry,” Reuters said.

…click on the above link to read the rest of the article…

EU Natural Gas Prices Soar As Gazprom Readies Nord Stream Cuts, US NatGas Hits 14-Year High

July 26, 2022

EU Natural Gas Prices Soar As Gazprom Readies Nord Stream Cuts, US NatGas Hits 14-Year High

European natural gas futures extended gains by 12% after Russian state-owned energy producer Gazprom PJSC unexpectedly announced it would halt a Nord Stream 1 turbine at its Portovaya compressor station from Wednesday. Simultaneously, US NatGas futures have spiked to 14-year highs.

Russian NatGas supplies to Europe via Nord Stream pipeline fell to 38% capacity from 40% on Tuesday, ahead of a more significant cut from current levels to just 20% on Wednesday.

In a statement, Gazprom said the Nord Stream pipeline would be pumping 33 million cubic meters a day, or 20% of capacity, from Wednesday, adding another turbine for the pipeline will be taken offline due to maintenance work.

Kremlin spokesman Dmitry Peskov said another Nord Stream turbine has “problems” and will be taken offline for maintenance.

Peskov noted a turbine sent to Canada earlier is “en route” but didn’t specify its exact location.

Western sanctions prolonged the average maintenance time of the Nord Stream.

“The situation is critically aggravated by the restrictions and sanctions imposed against our country,” the Kremlin spokesman continued.

Russian state media reported Monday that the turbine recently serviced in Canada by Siemens Energy AG had finally received export paperwork that will allow it to be shipped from Germany to Helsinki, Finland.

Nord Stream’s upcoming capacity declines sent Wholesale European NatGas futures up 12% to 196 euros. Prices have jumped more than 20% in two sessions and are near highs seen last winter at more than 200 euros.

EU Natgas prices are trading at an oil-barrel-equivalent price of $333….

Across the Atlantic, US NatGas futures extended gains, up more than 10% to $9.62, a 14-year high, amid concerns about hot weather and tight supplies.

…click on the above link to read the rest of the article…

IEA Chief: Europe Must Cut Gas Usage 20% To Survive Winter

July 22, 2022

IEA Chief: Europe Must Cut Gas Usage 20% To Survive Winter

After calling on all member states to reduce gas consumption by 15% in the face of the threat of a complete Russian gas cutoff, the IEA says the European Union will need to cut even more in order to get through the winter.

“Even if there is no single accident… #Europe still needs to reduce its gas consumption about 20% compared to today in order to have safe and normal winter months,” IEA chief Fatih Birol said, issuing what he called a “red alert” for energy markets.

The short-term issue with the Nord Stream 1 pipeline may have been resolved, Birol told CNN, but “it’s too early to be happy about this”.

The amount Europe is receiving now from Russia is only about one-third of what it was receiving prior to the force majeure, and the IEA chief warned that even that reduced flow “can be cut anytime”.

After a 10-day pause for regular maintenance, Russian gas flows via Nord Stream resumed on Thursday morning, with orders for gas set at around 40% of Nord Stream’s capacity, the level from before the maintenance after Russia slashed flows in mid-June. Flows early on Thursday were at around 21.5 GWh, compared to 30GWh prior to the start of maintenance on July 11th, and compared to 70 GWh before Russia reduced supplies by 60% on June 13th.

On Wednesday, the European Commission unveiled measures for the bloc to conserve gas to pre-empt a Russian cutoff, asking member states to reduce consumption by 15% until next spring.

According to Birol, this won’t be enough to ensure a smooth winter for Europe, and there is no alternative to consumption reductions.

…click on the above link to read the rest of the article…

As Fuel Prices Poised to TRIPLE, EU Mulls Rationing Gas Across Bloc Monday

July 20, 2022

As Fuel Prices Poised to TRIPLE, EU Mulls Rationing Gas Across Bloc Monday

The European Union (EU) is going down in flames as its fuel taps from Russia run dry.

Issues related to the war in Ukraine have resulted in no more gas flowing through the Nord Stream 1 (NS1) pipeline and soon-to-be tripled gas prices across Europe.

To avoid what will inevitably become a widespread catastrophe for the European economy, EU officials are reportedly discussing fuel rationing as the next step in their standoff against Russian President Vladimir Putin, who quite frankly appears to be winning on every front.

Should the NS1 pipeline never get turned back on due to issues with a key engine turbine component that is still stuck in Canada due to sanctions, Western Europe faces a total loss of energy in the coming months.

Up until now, the public was simply hearing about these problems on the news. Now, however, the consequences of failed political leadership are turning into sky-high gas prices and now the potential for forced rationing.

A recent poll found that more than 60 percent of German citizens fear there will not be enough gas to go around this winter, especially since some people will be stocking up and hoarding what they can before prices triple come 2023.

Germans are starting “to sweat” as they realize there will be no gas available for heat this winter

Draft EU measures propose limiting the heating of public and commercial buildings to 19 degrees Celsius, or around 66 degrees Fahrenheit, which is cold enough to require the use of extra layers of clothing indoors.

Private households are also being encouraged to lower their thermostats by one degree, a proposal that was also made back in February right after Russia invaded Ukraine.

…click on the above link to read the rest of the article…

German Energy Giant Warns Of Insolvency “Within Days”, Starts Draining Gas From Storage

July 15, 2022

German Energy Giant Warns Of Insolvency “Within Days”, Starts Draining Gas From Storage

Dear Biden administration: for an example of a real emergency that justifies draining a commodity reserve – and not just midterm elections which Democrats will lose in a historic rout – read on.

German energy giant and distressed nat gas utility Uniper, which is among the companies most exposed to Russian natural gas, has started using gas it was storing for the winter after Russia cut deliveries to Europe, increasing pressure on Berlin as the German energy giant needs to be rescued “in a few days.”

The country’s top buyer of Russian gas started withdrawing fuel from storage sites to supply its customers, the company said in a statement to Bloomberg on Friday. The drawdowns, which began on Monday, will also help the company to save some cash as it has been forced to pay up for gas in the spot market. Meanwhile, flows through the Nord Stream 1 pipeline remain shut for maintenance.

Harald Seegatz, deputy chairman of the supervisory board, said that Uniper needs urgent help, risking insolvency within days.

“We are currently reducing our own gas volumes in our storage facilities in order to supply our customers with gas and to secure Uniper’s liquidity,” the company said. And judging by the flatlining of German gas storage in inventory, Uniper is not alone in draining reserves.

According to Bloomberg, citing data from Gas Infrastructure Europe, Uniper’s storage sites in Germany are now about 58% full, down from about 60% reached on Sunday. Drawdowns were also made from the company’s storage in Austria, but overall storage levels in Germany’s Alpine neighbor are still showing marginal increases.

…click on the above link to read the rest of the article…

Germany Plans ‘Warm Up Spaces’ in Response to Gas Shortages

July 12, 2022

Germany Plans ‘Warm Up Spaces’ in Response to Gas Shortages

Sports arenas to be used to help people who can’t pay skyrocketing energy bills.

picture alliance via Getty Images

Cities across Germany are planning to use sports arenas and exhibition halls as ‘warm up spaces’ this winter to help freezing citizens who are unable to afford skyrocketing energy costs.

Bild newspaper reveals how the the nation’s Cities and Municipalities Association has urged local authorities to set aside public spaces to help vulnerable citizens in the colder months.

Germany has already seen its gas supply from Russia significantly restricted as a result of its support for sanctions and the war in Ukraine.

“We are currently preparing for all emergency scenarios for autumn and winter,” Jutta Steinruck, the city mayor of Ludwigshafen told Bild, where the Friedrich-Ebert-Halle arena is about to be converted into a warm up hall.

“Nobody can say exactly how dramatic the developments will be,” said Gerd Landsberg, the head of the Cities and Municipalities Association.

Landberg urged local municipalities to create “heat islands” and “warm rooms, where people can stay, even during a very cold winter.”

The western German towns of Neustadt, Frankenthal and Landau are also making similar arrangements, while others are planning to turn off lights outside public buildings as well as deactivating traffic lights at night to save energy.

As we highlighted last week, Germany’s largest residential landlord which owns around 490,000 properties is set to impose energy rationing that will cut heating to tenants at night in response to falling gas imports from Russia.

Germans have also been told to take fewer showers, wear more layers of clothing and avoid washing their clothes and driving their cars as often.

…click on the above link to read the rest of the article…

We’re heading for a messy, and expensive, breakup with natural gas

July 7, 2022

We’re heading for a messy, and expensive, breakup with natural gas

Russia’s invasion of Ukraine has exacerbated a number of fault lines already present within the global energy supply chain. This is especially true in Europe, where many countries were reliant on the superstate’s natural resources, and are now hastily looking to cut ties before the supply is shut off. This has revealed the fragility of Europe’s energy market, and caused it to drive up demand and prices for consumers all over the globe.

In the UK, things are becoming increasingly dire and energy prices are skyrocketing. Bad planning on the infrastructure side and the cancellation of several major domestic energy efficiency programs are exacerbating the problem. It’s clear that real, useful action on the national level isn’t coming any time soon. So, I wondered, what would happen if I, personally, simply tried to break up with natural gas on my own? It’s relatively straightforward but, as it turns out, it comes at a cost that only one percenters will be able to bear.

Dan Cooper: Energy consumer

I live in a four-bedroom, end-terraced house that’s around 150 years old and I’ve tried, as best as I can, to renovate it in an eco-friendly way. Since we bought it almost a decade ago, my wife and I have insulated most of the rooms, installed a new gas central heating system and hot water cylinder. We are, like nearly 20 million other households in the UK, reliant on natural gas to supply our home heating, hot water and cooking. And in the period between January 8th and April 7th, 2022, I was billed on the following usage:

Usage (kWh)	Cost Per Unit (GBP)	Cost (GBP)
Electricity (incl. standing charge)	861	0.32	£307.18
Gas (incl. standing charge)	8696.7	0.753	£678.80
Total (incl. tax and other charges)	£1,035.28

…click on the above link to read the rest of the article…

Entire industries in Germany could collapse due to Russian natural-gas supply cuts: union head

July 4, 2022

Entire industries in Germany could collapse due to Russian natural-gas supply cuts: union head

Germany’s Economic Minister Robert Habeck speaks to press in Dusseldorf, Germany.

Listen to The Refresh: Insider’s real-time news podcast.

Entire industries in Germany could collapse due to natural-gas supply cuts from Russia, said Yasmin Fahimi, the country’s top union official.

“Entire industries are in danger of collapsing permanently because of the gas bottlenecks: aluminum, glass, the chemical industry,” Fahimi, the head of the German Federation of Trade Unions, told Bild am Sonntag. “Such a collapse would have massive consequences for the entire economy and jobs in Germany.”

The chemical industry, which employs about 346,000 people, is the third-largest industry in Germany, according to Germany Trade & Invest, the country’s investment promotion agency.

Germany — Europe’s largest economy — is reliant on piped natural gas from Russia, which accounts for 35% of its imports of the fuel. The industrial powerhouse imports almost all of the natural gas it uses, which accounts for about a quarter of the country’s total energy mix, according to the economy ministry.

The country’s energy crisis is already driving inflation to record highs, which threatens social stability, Fahimi told Bild am Sonntag.

Russian state gas giant Gazprom has already cut gas flows to Germany via the key Nord Stream 1 pipeline by 60% from last month, citing an equipment hold-up in Canada as a result of sanctions over the war in Ukraine.

…click on the above link to read the rest of the article…

Germany Fears Russia Could Shut Nord Stream 1 Within Weeks

June 25, 2022

Germany Fears Russia Could Shut Nord Stream 1 Within Weeks

The European Union has this week accused Russia of planning “rogue moves” regarding lowering natural gas flows to Europe, or in other words continuing to ‘weaponize’ its energy, to which the Kremlin has consistently responded with variations of ‘our gas, our rules’.

This after Moscow has reduced Nord Stream 1 gas flows by 40% last week while citing technical issues, leading to a four- to sixfold rise in market prices, based on German energy officials. However, Berlin isn’t buying that needed maintenance on the key pipeline is all that’s happening here, instead seeing in it an underhanded Russian ploy to ramp up the pressure on Europe, giving way to fears that the saga could end in Russia halting its pipeline altogether.

“Gas is now a scarce commodity in Germany,” economy minister Robert Habeck said at a Thursday press conference while warning that his country is now approaching crisis supply levels which could see authorities turn to gas rationing.

Habeck confirmed that the last days have seen a “significant deterioration of the gas supply situation” – following Gazprom’s Nord Stream 1 also having to now undergo what the Russian energy company has scheduled as “annual maintenance” for a period of ten days, from July 11 to July 21.

Habeck was asked in an interview this week with German broadcaster ZDF about the negative scenario possibility of Russia artificially extending the repair and maintenance period: “I’d be lying if I said I’m ruling it out. In fact, Putin has gradually reduced the amount of gas more and more,” he responded.

According to the German language publication, the economy minister bluntly spelled out that Putin is trying to use energy to drive a wedge among European allies:

…click on the above link to read the rest of the article…

Germany Elevates Risk Level In Its “National Gas Emergency Plan” To Second-Highest “Alarm” Phase

June 23, 2022

Germany Elevates Risk Level In Its “National Gas Emergency Plan” To Second-Highest “Alarm” Phase

European natural gas and power prices surged after Germany triggered the “alarm stage” of its NatGas-emergency plan amid reductions in supplies from Russia, according to Reuters.

German Economy Minister Robert Habeck said Europe’s largest economy is in a severe energy crisis. He warned Germany should prepare for further cuts in Russian NatGas flows after Moscow recently slashed deliveries via the Nord Stream pipeline.

“We must not fool ourselves: The cut in gas supplies is an economic attack on us by Putin,” Habeck said.

“It is obviously Putin’s strategy to create insecurity, drive up prices and divide us as a society. This is what we are fighting against,” he continued.

Habeck wasn’t clear if NatGas rationing would be avoided.

The second “alarm stage” of a three-stage emergency plan allows utility companies to pass on higher power prices to industry and households to curb demand. The move comes as the Nord Stream pipeline to Germany operates at 40% of capacity after flows last week were reduced for a “technical problem” by Russian gas exporter Gazprom PJSC.

The second stage also increases energy market monitoring and allows for some coal-fired plants to be reactivated to increase electricity output.

All of this comes as Germany is making a mad dash to fill up its NatGas storage facilities ahead of winter. Total storage stands around 58% full, though the government-mandated target of 90% by November, a mark that might be hard to reach considering Nord Stream flows have been reduced.

Front-month benchmark futures rose as much as 6.5% to 135 euros a megawatt-hour on Germany’s elevated gas alarm.

German power for next year also surged 4.5% to 256 euros a megawatt-hour.

…click on the above link to read the rest of the article…

Why did gas prices go from $10 a gigajoule to $800 a gigajoule? An expert on the energy crisis engulfing Australia

June 4, 2022

Why did gas prices go from $10 a gigajoule to $800 a gigajoule? An expert on the energy crisis engulfing Australia

Australia’s east coast has been plunged into an energy crisis just as winter takes hold, which will see many people struggle to heat their homes due to soaring gas bills.

Meanwhile, Origin Energy this week confirmed it could not source enough black coal to power Australia’s largest coal plant at full capacity, deepening shocks to the energy market.

The electricity price surge is so dire, small energy retailers such as ReAmped Energy are advising customers to switch energy providers or be hit with much higher bills.

So what on Earth is going on? It has a lot to do with Russia’s war on Ukraine, which has disrupted the global energy market. Sanctions on Russian coal and gas exports mean there’s simply not enough supply to meet demand. As a consequence, the global price of gas and coal has soared.

Why are energy prices are getting so high?

Australia is a net exporter of gas and coal. This means we export most of our fossil fuels overseas. As the global price of coal increases, the cost of generating domestic electricity from coal is increasing.

What’s more, many of Australia’s coal generators are ageing, which means they fail more often. At present, nearly 30% of our coal generation is offline.

The price spike comes as coal plant owners look for the exit. Australia’s largest coal plant, Eraring, has been operating for 35 years. In February, Origin announced it would shut Eraring seven years ahead of schedule in 2025 because renewable energy was impacting profitability.

Origin’s new challenge is securing enough coal to run Eraring at its full 2.8 gigawatt capacity. The problem is set to persist into 2023.

…click on the above link to read the rest of the article…

Six Million Britons Could Face Power Rationing If Russia Cuts Supplies

May 31, 2022

Six Million Britons Could Face Power Rationing If Russia Cuts Supplies

Millions of UK households could face a treacherous winter riddled with power blackouts if Russian natural gas supplies to Europe stop, according to The Times, citing a government report.

Officials from Whitehall have drawn up a “reasonable” worst-case scenario, outlining widespread natgas shortages are possible if Russia continues to tighten the supplies to Europe.

A Whitehall source said:

“As a responsible government, it is right that we plan for every single extreme scenario, however unlikely.

“Britain is well prepared for any supply disruptions. Unlike EU countries, our North Sea gas reserves are being pumped out at full pelt, Norwegian rigs are directly connected into the UK, and we have the second-largest LNG import infrastructure in Europe – whereas Germany has none.”

The model assumes UK natgas imports from Norway could be slashed by half. Then it assumes no imports of natgas from interconnectors in the Netherlands and Belgium, due to protectionist measures. This would cause authorities to shutter UK natgas power plants and energy-intensive industrial facilities to keep natgas flowing to households.

Reducing natgas power generating capacity on the grid would trigger rolling blackouts for six million homes. Rationing of power would be during peak weekdays between 0700-1000 to 1600-2100.

The UK has vowed to phase out Russian fossil fuels and simultaneously extend the lifespan of Somerset nuclear power plant Hinkley Point B for 18 months despite decommissioning plans at the aging facility and extending the life at coal-fired power plants despite the greenifying of the economy (this will outrage climate alarmist Greta Thunberg).

The Whitehall source added: “Given the EU’s historical dependence on Putin’s gas, the winter could be very hard for countries on the continent.”

…click on the above link to read the rest of the article…

European Natural Gas Prices To Triple In “Perfect Storm”

May 16, 2022

European Natural Gas Prices To Triple In “Perfect Storm”

A top commodity research firm in Norway warns a “perfect storm” is brewing as European energy security worsens following Russia’s invasion of Ukraine, which could result in the tripling of natural gas prices.

“There simply is not enough LNG around to meet demand. In the short term, this will make for a hard winter in Europe.

“For producers, it suggests the next LNG boom is here, but it will arrive too late to meet the sharp spike in demand. The stage is set for a sustained supply deficit, high prices, extreme volatility, bullish markets, and heightened LNG geopolitics,” Kaushal Ramesh, a senior analyst for Gas and LNG at Rystad Energy, wrote.

Rystad Energy said the EU has an “ambitious target to reduce dependence on Russian gas by 66% within this year – an aim that will clash with the EU’s goal of replenishing gas storage to 80% of capacity by 1 November.”

The firm said shunning Russian natgas from the continent destabilizes the entire global natgas market, which had a turbulent 2021 year-end with prices skyrocketing across Europe because of the lack of supplies. EU is currently reducing reliance on Russian natgas and has unveiled the possibility of banning Russian fossil fuels. This will only lead to more trouble for the EU, where prices could rise even higher.

Learn more with Rystad Energy’s GasMarketCube.

According to the report, 155 billion cubic meters of Russian natgas flowed into Europe in 2021, representing about 31% of the continent’s natgas supply.

“Replacing a significant portion of this will be exceedingly difficult, with far-reaching consequences for Europe’s population, economy, and for the role of gas in the region’s energy transition,” Rystad Energy noted.

…click on the above link to read the rest of the article…

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