Winter Is Coming – Will It End War

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The News

Recently, Russia has reduced gas supplies to five European Union (EU) countries, including Germany, the biggest economy of the bloc that is heavily dependent on Moscow’s gas to generate electricity and power industry.
Russian state-owned energy giant Gazprom has cut supplies through the Nord Stream 1 pipeline running under the Baltic Sea from Russia to Germany by 60%.
Italy has seen its supply cut by half. Austria, the Czech Republic, and Slovakia too have seen supply cuts. This comes on top of gas shutoffs to Poland, Bulgaria, Denmark, Finland, France, and the Netherlands in recent weeks.

European Union, before the war got around 40% of its gas from Russia. It has already outlined plans to cut imports by two-thirds by the end of this year, and to phase out Russian gas entirely by 2027.
However, they are in a precarious situation as of now. Germany relies on Russia for 35% of its gas imports, Italy for 40%. Right now the gas supplies are enough for current needs.
But, EU is scrambling to fill its underground gas storage ahead of the winter. Gas utilities operate on a regular rhythm, filling reserves over the summer when they buy gas cheaper, and then drawing it down over the winter as heating demand rises.

Right now, Europe’s underground storage caverns are 57% full.
The European Commission’s latest proposal is for each country to reach 80% by 1^st November 2022. Germany has set goals of 90% storage by November 1.
Experts say that, “Bulgaria, Hungary, and Romania will not meet the EU 80% target if they continue at the current speed”.
Germany, Austria, and Slovakia will now find it very difficult to fill their storage facilities as Russian gas flow is reduced. (Imagine if it is stopped..!!!)

The EU has decided to phase out Russian gas entirely by 2027.
The main goal is to reduce the $850 million per day Russia has been reaping from oil and gas sales to Europe.
To avoid Russia gas, EU has been buying expensive liquefied natural gas, or LNG, from the US that is being delivered by ship. There are also efforts to get more pipeline gas from Norway and Azerbaijan. But currently they still rely heavily on Russian gas.

What is the reason for reduced gas to Germany?
- Gazprom says it had to cut back the flows to Europe through Nord Stream 1 because Western sanctions stranded a key piece of equipment in Canada, where it had been taken for maintenance.
- Experts believe that the call of gas reductions political.
- Gazprom’s steps have sent natural gas prices sharply higher. Higher gas prices increases revenue for Russia at a time when it’s under pressure from Western economic sanctions. It also adds stress on EU as it gives Ukraine political and military support.