REUTERS
"Gazprom says no additional obligations for Russia to get Nord Stream 1 turbine"
Reuters
July 22, 2022
MOSCOW, July 22 (Reuters) - Russian energy giant Gazprom said on Friday the current contract with Siemens Energy does not require Russia to take any further action in order to facilitate the return of a turbine for the Nord Stream 1 gas pipeline.
Nord Stream 1, which runs on the bed of the Baltic Sea from Russia to Germany, restarted pumping gas on Thursday after a 10-day maintenance, but at only 40% of its capacity.
Gazprom cut the flows in June, saying it could not get back the turbine, which had been sent to Canada for repairs.
Germany, in turn, has said that the turbine in question was meant to be used in September only.
It said on Friday that the company still had not obtained necessary documentation from Siemens Energy confirming the exemption from European Union and Canadian sanctions for the turbine to be returned to the Portovaya compressor station.
On Thursday, two people familiar with the matter said the turbine was stuck in transit in Germany because Russia has so far not given the go-ahead to transport it back.
"Gazprom underscored that the current terms of the contract do not provide for additional obligations of the Russian side to obtain this engine," the Kremlin-controlled company said in a statement after it had again asked Siemens Energy for the papers.
Germany dismisses Russia's argument that the missing turbine is the reason for lower supplies via Nord Stream 1, and has accused Moscow of using gas flows as a political weapon.
Russia has said it was a reliable energy supplier.
Reporting by Reuters, editing by Louise Heavens and David Evans
https://www.reuters.com/business/energy ... 022-07-22/
THE EUROPEANS
Re: THE EUROPEANS
RIGZONE
"European Gas Prices Rise Over Russian Pipeline Uncertainty"
by Bloomberg | Anna Shiryaevskaya
Monday, July 25, 2022
European natural gas prices rose for a fourth consecutive session as Russia offered little clarity on future flows via the key Nord Stream pipeline.
While the link is shipping gas to Germany at a consistent rate of 40% of capacity following the end of maintenance on July 21, the Kremlin and gas giant Gazprom PJSC signaled that the European Commission’s sanctions on Russia pose further risks to the supplies.
Benchmark European prices climbed as much as 6.7%.
In a new twist on Monday, Gazprom indicated potential further delays for the return of a turbine that pumps gas into Nord Stream because the paperwork provided doesn’t answer all the gas exporter’s questions.
The documents “raise additional questions” and issues around the sanctions haven’t been resolved, Gazprom said.
The critical piece of equipment was first delayed by sanctions after repairs in Canada.
While it was finally shipped to Germany, it remains there after missing a ferry sailing on Saturday to Helsinki amid paperwork delays, Russian newspaper Kommersant reported.
The turbine needs to be reinstalled at a compressor station in Russia.
Russian President Vladimir Putin last week warned that flows via Nord Stream could decline to 20% if a turbine isn’t received in time to replace another that’s likely to need repairs.
“Gazprom still has open questions about sanctions imposed by the EC and the UK, and their resolution is important for the delivery of the turbine to Russia and urgent maintenance of other turbines,” the Russian company said in a statement.
The Kremlin earlier on Monday tried to ease the market, saying the repaired component will be re-installed.
However, it warned that any further sanctions on Russia may weigh on how much gas it can supply to Europe.
“The turbine will be installed after all the technical formalities have been completed, and the flows will be at the levels that are technologically possible,” Kremlin spokesman Dmitry Peskov said.
The situation may change “if Europe continues its course of absolutely recklessly imposing sanctions and restrictions,” he said.
Uncertain about the future level of Russian flows, the European Union is on a mission to save as much gas as possible ahead of the peak winter demand season.
The European Commission President Ursula von der Leyen called on all EU member states to participate in the effort to save gas, regardless of how dependent they are on Russia for the fuel.
“Putin has suggested that if the turbine is not back early this week, then gas flow may fall to 20% capacity even though originally this turbine wasn’t expected to be needed until September,” Deutsche Bank AG said in a research note.
“So, watch out for gas politics.”
Still, even limited volumes via Nord Stream have helped Germany and its embattled utility Uniper SE stabilize gas storage levels.
Inventories are now at 65.9%, and the country’s storage is back on a “proper path,” according to federal network agency BNetzA.
Germany’s next goal is to reach 75% by Sept. 1, in line with a government target announced last week, Klaus Mueller, head of the agency, said in a Twitter post on Monday.
Uniper, which was bailed out by the government last week, had to take gas from its storage sites in Germany when Russian flows dwindled.
Its storage facilities in Germany resumed injections on Saturday and are now 53.1% full, data from Gas Infrastructure Europe show.
A Uniper spokesman confirmed the company is filling its own booked storage capacities again.
Nord Stream flowing at only 40% of capacity “is not enough for Germany’s energy hunger and there is still great uncertainty on whether the Russian leadership will turn off the gas tap completely,” said Claus Niegsch, industry analyst at DZ Bank.
“This is particularly worrying for industrial companies because planning for the coming months is becoming increasingly difficult.”
Dutch front-month futures, the European benchmark, rose 5.4% to 168.52 euros per megawatt-hour by 3:14 p.m. in Amsterdam. UK front-month gas edged down 2.6%.
European power also inched up on gas prices.
German front-year power rose as much at 0.9% to 339.50 euros per megawatt-hour.
--With assistance from Elena Mazneva, Vanessa Dezem, and Todd Gillespie.
https://www.rigzone.com/news/wire/europ ... 8-article/
"European Gas Prices Rise Over Russian Pipeline Uncertainty"
by Bloomberg | Anna Shiryaevskaya
Monday, July 25, 2022
European natural gas prices rose for a fourth consecutive session as Russia offered little clarity on future flows via the key Nord Stream pipeline.
While the link is shipping gas to Germany at a consistent rate of 40% of capacity following the end of maintenance on July 21, the Kremlin and gas giant Gazprom PJSC signaled that the European Commission’s sanctions on Russia pose further risks to the supplies.
Benchmark European prices climbed as much as 6.7%.
In a new twist on Monday, Gazprom indicated potential further delays for the return of a turbine that pumps gas into Nord Stream because the paperwork provided doesn’t answer all the gas exporter’s questions.
The documents “raise additional questions” and issues around the sanctions haven’t been resolved, Gazprom said.
The critical piece of equipment was first delayed by sanctions after repairs in Canada.
While it was finally shipped to Germany, it remains there after missing a ferry sailing on Saturday to Helsinki amid paperwork delays, Russian newspaper Kommersant reported.
The turbine needs to be reinstalled at a compressor station in Russia.
Russian President Vladimir Putin last week warned that flows via Nord Stream could decline to 20% if a turbine isn’t received in time to replace another that’s likely to need repairs.
“Gazprom still has open questions about sanctions imposed by the EC and the UK, and their resolution is important for the delivery of the turbine to Russia and urgent maintenance of other turbines,” the Russian company said in a statement.
The Kremlin earlier on Monday tried to ease the market, saying the repaired component will be re-installed.
However, it warned that any further sanctions on Russia may weigh on how much gas it can supply to Europe.
“The turbine will be installed after all the technical formalities have been completed, and the flows will be at the levels that are technologically possible,” Kremlin spokesman Dmitry Peskov said.
The situation may change “if Europe continues its course of absolutely recklessly imposing sanctions and restrictions,” he said.
Uncertain about the future level of Russian flows, the European Union is on a mission to save as much gas as possible ahead of the peak winter demand season.
The European Commission President Ursula von der Leyen called on all EU member states to participate in the effort to save gas, regardless of how dependent they are on Russia for the fuel.
“Putin has suggested that if the turbine is not back early this week, then gas flow may fall to 20% capacity even though originally this turbine wasn’t expected to be needed until September,” Deutsche Bank AG said in a research note.
“So, watch out for gas politics.”
Still, even limited volumes via Nord Stream have helped Germany and its embattled utility Uniper SE stabilize gas storage levels.
Inventories are now at 65.9%, and the country’s storage is back on a “proper path,” according to federal network agency BNetzA.
Germany’s next goal is to reach 75% by Sept. 1, in line with a government target announced last week, Klaus Mueller, head of the agency, said in a Twitter post on Monday.
Uniper, which was bailed out by the government last week, had to take gas from its storage sites in Germany when Russian flows dwindled.
Its storage facilities in Germany resumed injections on Saturday and are now 53.1% full, data from Gas Infrastructure Europe show.
A Uniper spokesman confirmed the company is filling its own booked storage capacities again.
Nord Stream flowing at only 40% of capacity “is not enough for Germany’s energy hunger and there is still great uncertainty on whether the Russian leadership will turn off the gas tap completely,” said Claus Niegsch, industry analyst at DZ Bank.
“This is particularly worrying for industrial companies because planning for the coming months is becoming increasingly difficult.”
Dutch front-month futures, the European benchmark, rose 5.4% to 168.52 euros per megawatt-hour by 3:14 p.m. in Amsterdam. UK front-month gas edged down 2.6%.
European power also inched up on gas prices.
German front-year power rose as much at 0.9% to 339.50 euros per megawatt-hour.
--With assistance from Elena Mazneva, Vanessa Dezem, and Todd Gillespie.
https://www.rigzone.com/news/wire/europ ... 8-article/
Re: THE EUROPEANS
BLOOMBERG
"Germany ‘on Brink of Recession’ as Business Confidence Falls"
Carolynn Look
25 JULY 2022
German business confidence deteriorated to the worst level since the early months of the pandemic on growing concerns that record inflation and limited energy supplies from Russia will throw Europe’s biggest economy into a downturn.
A gauge of expectations released Monday by the Munich-based Ifo Institute fell to 80.3 in July from 85.8 in June.
Analysts had predicted a drop to 83.0.
An index of current conditions also dropped.
“Germany is on the brink of a recession,” Ifo President Clemens Fuest said.
“High energy prices and the threat of gas shortages are weighing on the economy."
"Companies are expecting significantly worse business activity in the coming months.”
The report reflects mounting gloom in Germany, whose pandemic recovery was already muted because of rampant inflation and component shortages exacerbated by the war in Ukraine.
A gauge of private-sector activity by S&P Global signaled the economy began contracting in July for the first time this year.
The Bundesbank warned last week that price growth is likely to remain elevated in the coming months, and may even resume its ascent in September as temporary relief measures end.
Fears over Russian gas deliveries are “weighing on the outlook” for German growth, it said in its monthly report.
A key risk for Germany, which imports a large share of its natural gas from Russia, is that further slowdowns or standstills in energy supplies could drive inflation higher still.
Already squeezed by rising prices, consumers and companies must now grapple with higher interest rates after the European Central Bank lifted borrowing costs for the first time in more than a decade last week.
Even after delivering a bigger-than-expected initial rate increase, the ECB may not be done with outsized hikes, Governing Council member Martins Kazaks said in an interview.
Fuest said energy prices will play a more important role in shaping Germany’s economy over the coming months.
“The hike of the ECB is in a way already priced in,” he said.
https://www.msn.com/en-us/money/markets ... 8b7074e73a
"Germany ‘on Brink of Recession’ as Business Confidence Falls"
Carolynn Look
25 JULY 2022
German business confidence deteriorated to the worst level since the early months of the pandemic on growing concerns that record inflation and limited energy supplies from Russia will throw Europe’s biggest economy into a downturn.
A gauge of expectations released Monday by the Munich-based Ifo Institute fell to 80.3 in July from 85.8 in June.
Analysts had predicted a drop to 83.0.
An index of current conditions also dropped.
“Germany is on the brink of a recession,” Ifo President Clemens Fuest said.
“High energy prices and the threat of gas shortages are weighing on the economy."
"Companies are expecting significantly worse business activity in the coming months.”
The report reflects mounting gloom in Germany, whose pandemic recovery was already muted because of rampant inflation and component shortages exacerbated by the war in Ukraine.
A gauge of private-sector activity by S&P Global signaled the economy began contracting in July for the first time this year.
The Bundesbank warned last week that price growth is likely to remain elevated in the coming months, and may even resume its ascent in September as temporary relief measures end.
Fears over Russian gas deliveries are “weighing on the outlook” for German growth, it said in its monthly report.
A key risk for Germany, which imports a large share of its natural gas from Russia, is that further slowdowns or standstills in energy supplies could drive inflation higher still.
Already squeezed by rising prices, consumers and companies must now grapple with higher interest rates after the European Central Bank lifted borrowing costs for the first time in more than a decade last week.
Even after delivering a bigger-than-expected initial rate increase, the ECB may not be done with outsized hikes, Governing Council member Martins Kazaks said in an interview.
Fuest said energy prices will play a more important role in shaping Germany’s economy over the coming months.
“The hike of the ECB is in a way already priced in,” he said.
https://www.msn.com/en-us/money/markets ... 8b7074e73a
Re: THE EUROPEANS
MARKETWATCH
"Yellen downplays U.S. recession risk as wave of key economic data looms"
Associated Press
24 JULY 2022
WASHINGTON — Treasury Secretary Janet Yellen on Sunday said the U.S. economy is slowing but pointed to healthy hiring as proof that it is not yet in recession.
Yellen spoke on NBC’s “Meet the Press” just before a slew of economic reports will be released this week that will shed light on an economy currently besieged by rampant inflation and threatened by higher interest rates.
The data will cover sales of new homes, consumer confidence, incomes, spending, inflation, and overall output.
The highest-profile report will likely be Thursday, when the Commerce Department will release its first estimate of the economy’s output in the April-June quarter.
Some economists forecast it may show a contraction for the second quarter in a row.
The economy shrank 1.6% in the January-March quarter.
Two straight negative readings is considered an informal definition of a recession, though in this case economists think that’s misleading.
Instead, the National Bureau of Economic Research — a nonprofit group of economists — defines a recession as “a significant decline in economic activity that is spread across the economy and lasts more than a few months.”
Yellen argued that much of the economy remains healthy: Consumer spending is growing, Americans’ finances, on average, are solid, and the economy has added more than 400,000 jobs a month this year, a robust figure.
The unemployment rate is 3.6%, near a half-century low.
“We’ve got a very strong labor market,” Yellen said.
“This is not an economy that’s in recession.”
Still, Yellen acknowledged the economy is “in a period of transition in which growth is slowing,” from a historically rapid pace in 2021.
She said that slowdown is “necessary and appropriate,” because “we need to be growing at a steady and sustainable pace.”
Slower growth could help bring down inflation, which at 9.1% is the highest in two generations.
Still, many economists think a recession is on the horizon, with inflation eating away at Americans’ ability to spend and the Federal Reserve rapidly pushing up borrowing costs.
Last week, Bank of America’s economists became the latest to forecast a “mild recession” later this year.
And Larry Summers, the treasury secretary under President Bill Clinton, said on CNN’s “GPS” Sunday that “there’s a very high likelihood of recession,” as the Fed lifts interest rates to combat inflation.
Those higher borrowing costs are intended to reduce consumer spending on homes and cars and slow business borrowing, which can lead to a downturn.
On Wednesday, the Federal Reserve is likely to announce its second 0.75% point increase in its short-term rate in a row, a hefty increase that it hasn’t otherwise implemented since 1994.
That will put the Fed’s benchmark rate in a range of 2.25% to 2.5%, the highest level since 2018.
Fed policymakers are expected to keep hiking until its rate reaches about 3.5%, which would be the highest since 2008.
The Fed’s hikes have torpedoed the housing market, as mortgage rates have doubled in the past year to 5.5%.
Sales of existing homes have fallen for five straight months.
On Tuesday, the government is expected to report that sales of new homes dropped in June.
Fewer home sales also means less spending on items that typically come with purchasing a new house, such as furniture, appliances, curtains, and kitchenware.
Many other countries are also grappling with higher inflation, and slower growth overseas could weaken the U.S. economy.
Europe is facing the threat of recession, with soaring inflation and a central bank that just last week raised interest rates for the first time in 11 years.
European Central Bank President Christine Lagarde also sought to minimize recession concerns in an news conference last Thursday.
“Under the baseline scenario, there is no recession, neither this year nor next year,” Lagarde said.
“Is the horizon clouded?"
"Of course it is.”
https://www.msn.com/en-us/money/markets ... 4b0bf0873f
"Yellen downplays U.S. recession risk as wave of key economic data looms"
Associated Press
24 JULY 2022
WASHINGTON — Treasury Secretary Janet Yellen on Sunday said the U.S. economy is slowing but pointed to healthy hiring as proof that it is not yet in recession.
Yellen spoke on NBC’s “Meet the Press” just before a slew of economic reports will be released this week that will shed light on an economy currently besieged by rampant inflation and threatened by higher interest rates.
The data will cover sales of new homes, consumer confidence, incomes, spending, inflation, and overall output.
The highest-profile report will likely be Thursday, when the Commerce Department will release its first estimate of the economy’s output in the April-June quarter.
Some economists forecast it may show a contraction for the second quarter in a row.
The economy shrank 1.6% in the January-March quarter.
Two straight negative readings is considered an informal definition of a recession, though in this case economists think that’s misleading.
Instead, the National Bureau of Economic Research — a nonprofit group of economists — defines a recession as “a significant decline in economic activity that is spread across the economy and lasts more than a few months.”
Yellen argued that much of the economy remains healthy: Consumer spending is growing, Americans’ finances, on average, are solid, and the economy has added more than 400,000 jobs a month this year, a robust figure.
The unemployment rate is 3.6%, near a half-century low.
“We’ve got a very strong labor market,” Yellen said.
“This is not an economy that’s in recession.”
Still, Yellen acknowledged the economy is “in a period of transition in which growth is slowing,” from a historically rapid pace in 2021.
She said that slowdown is “necessary and appropriate,” because “we need to be growing at a steady and sustainable pace.”
Slower growth could help bring down inflation, which at 9.1% is the highest in two generations.
Still, many economists think a recession is on the horizon, with inflation eating away at Americans’ ability to spend and the Federal Reserve rapidly pushing up borrowing costs.
Last week, Bank of America’s economists became the latest to forecast a “mild recession” later this year.
And Larry Summers, the treasury secretary under President Bill Clinton, said on CNN’s “GPS” Sunday that “there’s a very high likelihood of recession,” as the Fed lifts interest rates to combat inflation.
Those higher borrowing costs are intended to reduce consumer spending on homes and cars and slow business borrowing, which can lead to a downturn.
On Wednesday, the Federal Reserve is likely to announce its second 0.75% point increase in its short-term rate in a row, a hefty increase that it hasn’t otherwise implemented since 1994.
That will put the Fed’s benchmark rate in a range of 2.25% to 2.5%, the highest level since 2018.
Fed policymakers are expected to keep hiking until its rate reaches about 3.5%, which would be the highest since 2008.
The Fed’s hikes have torpedoed the housing market, as mortgage rates have doubled in the past year to 5.5%.
Sales of existing homes have fallen for five straight months.
On Tuesday, the government is expected to report that sales of new homes dropped in June.
Fewer home sales also means less spending on items that typically come with purchasing a new house, such as furniture, appliances, curtains, and kitchenware.
Many other countries are also grappling with higher inflation, and slower growth overseas could weaken the U.S. economy.
Europe is facing the threat of recession, with soaring inflation and a central bank that just last week raised interest rates for the first time in 11 years.
European Central Bank President Christine Lagarde also sought to minimize recession concerns in an news conference last Thursday.
“Under the baseline scenario, there is no recession, neither this year nor next year,” Lagarde said.
“Is the horizon clouded?"
"Of course it is.”
https://www.msn.com/en-us/money/markets ... 4b0bf0873f
Re: THE EUROPEANS
REUTERS
"Europe agrees emergency gas curbs, Kyiv says Russia supply curbs are 'price terror'"
By Kate Abnett
July 26, 2022
Summary
* EU ministers agree to emergency gas use cuts
* Voluntary cuts would become binding in supply emergency
* Final deal exempts numerous countries, industries
* EU racing to save gas as Russia slashes supply
BRUSSELS, July 26 (Reuters) - European Union countries bracing for further cuts in Russian gas supply on Tuesday approved a weakened emergency plan to curb demand, after striking compromise deals to limit reductions for some countries.
Europe faces a tighter gas squeeze from Wednesday, when Russia's Gazprom has said it would cut flows through the Nord Stream 1 pipeline to Germany to a fifth of capacity.
With a dozen EU countries already facing lower Russian supplies, Brussels is urging member states to save gas and store it for winter, fearing Russia will completely cut off flows in retaliation for sanctions over the Ukraine war.
Energy ministers approved a proposal for all EU countries to voluntarily cut gas use by 15% in the August-March period from the average from 2017-2021.
The cuts could be made binding in a supply emergency, provided a majority of EU countries agree.
But members agreed to exempt numerous industries from the binding 15% cut.
German Economy Minister Robert Habeck said the agreement would show Russian President Vladimir Putin that Europe remained united.
"You will not split us," Habeck said.
Hungary was the only country that opposed the deal, two EU officials said.
Ukrainian President Volodymyr Zelenskiy said Russia was cutting supplies to impose "price terror" against Europe.
"Using Gazprom, Moscow is doing all it can to make this coming winter as harsh as possible for the European countries."
"Terror must be answered - impose sanctions," he said in a video address on Tuesday.
Gazprom has blamed its latest reduction on needing to halt operation of a turbine.
EU energy chief Kadri Simson dismissed that reason, calling the move "politically motivated".
Simson said the agreement should ensure countries save enough gas to survive an average winter if Russia fully cut supplies now, but an unusually cold winter would require more severe measures.
Russia supplied 40% of EU gas before it invaded Ukraine on Feb. 24.
SOLIDARITY, SAVINGS
The EU deal would exempt from the binding 15% gas cut Ireland, Malta and Cyprus.
These countries are not connected to other member states' gas networks and therefore could not share spare gas if needed.
Countries with a limited ability to export gas to other EU countries can request a lower target, provided they export what they can.
That could include Spain, which does not rely on Russian gas and had initially opposed the plan.
"Everyone understands that when someone asks for help, you have to help," Spanish Energy Minister Teresa Ribera said.
Countries that overachieve an EU target for filling gas storage by August could also face weaker targets, potentially softening cuts for roughly a dozen states with relatively full storage, including Germany and Italy.
States can exempt gas used in critical industries, such as energy-intensive steelmaking.
Italian Ecological Transition Minister Roberto Cingolani said the country's binding target would be nearer 7% than 15%, once gas reductions it has made compared with previous years were taken into account.
News of the latest supply drop has driven gas prices higher, adding to the cost of filling storage, while creating incentives to use less.
On Tuesday, the benchmark front-month Dutch contract rose more than 10% and is around 430% higher than a year ago.
The plan has tested countries' solidarity.
Poland approved the deal, but Climate Minister Anna Moskwa said one country's industry should not be forced to use less gas to help other states.
Others were more positive, including Malta and Portugal, which won softer targets.
Maltese energy minister Miriam Dalli said the deal reflected countries' varying energy situations.
"We managed to pass on a strong message of solidarity," she said.
Some raised concern the savings would still not be enough to avert a winter shortage.
Levels vary between countries, but the EU has reduced its combined gas use by only 5%, despite months of soaring prices and Russian supplies.
"Fifteen percent will probably not be enough, given what the Russians have just announced," Irish Environment Minister Eamon Ryan said.
Reporting by Kate Abnett, Philip Blenkinsop, Robin Emmott, Marine Strauss, Gabriela Baczynska, Giselda Vagnoni and David Ljunggren; Editing by Philip Blenkinsop, Matthew Lewis, Barbara Lewis and Jan Harvey
https://www.reuters.com/business/energy ... 022-07-26/
"Europe agrees emergency gas curbs, Kyiv says Russia supply curbs are 'price terror'"
By Kate Abnett
July 26, 2022
Summary
* EU ministers agree to emergency gas use cuts
* Voluntary cuts would become binding in supply emergency
* Final deal exempts numerous countries, industries
* EU racing to save gas as Russia slashes supply
BRUSSELS, July 26 (Reuters) - European Union countries bracing for further cuts in Russian gas supply on Tuesday approved a weakened emergency plan to curb demand, after striking compromise deals to limit reductions for some countries.
Europe faces a tighter gas squeeze from Wednesday, when Russia's Gazprom has said it would cut flows through the Nord Stream 1 pipeline to Germany to a fifth of capacity.
With a dozen EU countries already facing lower Russian supplies, Brussels is urging member states to save gas and store it for winter, fearing Russia will completely cut off flows in retaliation for sanctions over the Ukraine war.
Energy ministers approved a proposal for all EU countries to voluntarily cut gas use by 15% in the August-March period from the average from 2017-2021.
The cuts could be made binding in a supply emergency, provided a majority of EU countries agree.
But members agreed to exempt numerous industries from the binding 15% cut.
German Economy Minister Robert Habeck said the agreement would show Russian President Vladimir Putin that Europe remained united.
"You will not split us," Habeck said.
Hungary was the only country that opposed the deal, two EU officials said.
Ukrainian President Volodymyr Zelenskiy said Russia was cutting supplies to impose "price terror" against Europe.
"Using Gazprom, Moscow is doing all it can to make this coming winter as harsh as possible for the European countries."
"Terror must be answered - impose sanctions," he said in a video address on Tuesday.
Gazprom has blamed its latest reduction on needing to halt operation of a turbine.
EU energy chief Kadri Simson dismissed that reason, calling the move "politically motivated".
Simson said the agreement should ensure countries save enough gas to survive an average winter if Russia fully cut supplies now, but an unusually cold winter would require more severe measures.
Russia supplied 40% of EU gas before it invaded Ukraine on Feb. 24.
SOLIDARITY, SAVINGS
The EU deal would exempt from the binding 15% gas cut Ireland, Malta and Cyprus.
These countries are not connected to other member states' gas networks and therefore could not share spare gas if needed.
Countries with a limited ability to export gas to other EU countries can request a lower target, provided they export what they can.
That could include Spain, which does not rely on Russian gas and had initially opposed the plan.
"Everyone understands that when someone asks for help, you have to help," Spanish Energy Minister Teresa Ribera said.
Countries that overachieve an EU target for filling gas storage by August could also face weaker targets, potentially softening cuts for roughly a dozen states with relatively full storage, including Germany and Italy.
States can exempt gas used in critical industries, such as energy-intensive steelmaking.
Italian Ecological Transition Minister Roberto Cingolani said the country's binding target would be nearer 7% than 15%, once gas reductions it has made compared with previous years were taken into account.
News of the latest supply drop has driven gas prices higher, adding to the cost of filling storage, while creating incentives to use less.
On Tuesday, the benchmark front-month Dutch contract rose more than 10% and is around 430% higher than a year ago.
The plan has tested countries' solidarity.
Poland approved the deal, but Climate Minister Anna Moskwa said one country's industry should not be forced to use less gas to help other states.
Others were more positive, including Malta and Portugal, which won softer targets.
Maltese energy minister Miriam Dalli said the deal reflected countries' varying energy situations.
"We managed to pass on a strong message of solidarity," she said.
Some raised concern the savings would still not be enough to avert a winter shortage.
Levels vary between countries, but the EU has reduced its combined gas use by only 5%, despite months of soaring prices and Russian supplies.
"Fifteen percent will probably not be enough, given what the Russians have just announced," Irish Environment Minister Eamon Ryan said.
Reporting by Kate Abnett, Philip Blenkinsop, Robin Emmott, Marine Strauss, Gabriela Baczynska, Giselda Vagnoni and David Ljunggren; Editing by Philip Blenkinsop, Matthew Lewis, Barbara Lewis and Jan Harvey
https://www.reuters.com/business/energy ... 022-07-26/
Re: THE EUROPEANS
REUTERS
"Analysis: U.S. LNG exports to Europe on track to surpass Biden promise"
By Jarrett Renshaw and Scott Disavino
July 26, 2022
July 26 (Reuters) - When U.S. President Joe Biden promised European leaders in March that he would help secure new supplies of liquefied natural gas to offset shortages from Russia’s invasion of Ukraine, his pledge was greeted with scepticism.
After all, the U.S. LNG industry was already hitting its export limits and the global market is dominated by long-term contracts that can dictate where exported gas would go for twenty years at a time.
It turns out, however, that Biden's promise may have been far too modest.
The United States is on track to blow past Biden’s March commitment of an additional 15 billion cubic meters of LNG for Europe this year, according to a Reuters analysis of export data compiled by Refinitiv, and to triple the pledge.
The No. 1 natural gas producer became the top LNG exporter in the world in the first half of 2022, the U.S. Energy Information Administration (EIA) said on Monday.
The surge is good news for a Biden administration that has sought to strengthen energy ties with Europe as a way to combat Russia's influence.
But given the globe's voracious demand for natural gas, these European imports come at the expense of poorer nations like Pakistan and India, which could face energy deficits or be driven to new deals with Russia.
Through June of this year, the U.S exported about 57 bcm of gas as LNG with 39 bcm, or 68%, going to Europe, Refinitiv data shows.
That is compared with 34 bcm, or 35%, of LNG exports shipped to Europe for all of 2021.
That means the United States has already sent more gas to Europe during the first six months of 2022 than it did in all 12 months of 2021.
If exports to Europe continue at the same pace through the second half of 2022, the total increase over 2021 would be around 45 bcm.
However, the pace of exports slowed in June after a fire shut Freeport LNG, which provides around 20% of U.S. LNG processing.
Full operations are not expected till the year end.
Another challenge could be a well-above average Atlantic hurricane season, analysts said.
HIGHER PROFITS IN EUROPE
The unexpected shift is happening because shippers are willing to pay contractual penalties for failing to deliver to countries like Pakistan and diverting the cargoes to Europe, where the high price covers the fee and profit, analysts said.
Analysts who argued earlier Biden's goal was unattainable now say the industry, dominated by companies like Cheniere Energy Inc and TotalEnergies, has proved much more pliable than they expected.
"It has become much more flexible than most thought it could be just three months ago."
"If you have to do stuff, things get moved," Henning Gloystein, a director of energy and climate at the Eurasia Group, said.
But that has meant falling U.S. LNG imports in countries paying less.
Belgium, for example, saw its U.S. imports of LNG swell by some 650% while Pakistan saw its U.S. imports decline by 72%, data showed.
Benchmark gas prices in Europe have averaged $34.06 per million British thermal units (mmBtu) so far in 2022 compared with $29.99 in Asia and $6.12 in the United States .
That compares with average 2021 prices of $16.04 in Europe, $18.00 in Asia and $3.73 in the United States, data showed.
“The cargoes are going to go where the market demands it will go,” said Ed Hirs, an energy economist at the University of Houston.
STILL NOT ENOUGH
The February invasion by Europe’s top gas supplier has pushed already-high energy prices to records and prompted the EU to pledge to cut Russian gas use by two-thirds this year by hiking imports from other countries and boosting renewable energy.
Despite the unexpected increase from the United States, the EU still finds itself in a precarious position heading into the high-use winter season as Russia continues to threaten to withhold gas supplies.
The EU urged member states to cut gas usage by 15% until March as an emergency step.
Biden and European Commission President Ursula von der Leyen also announced a plan to form a task force to cut Europe's reliance on Russian fossil fuels, including gas.
The Commission is set to ensure that the EU is able to receive about 50 bcm of additional U.S. LNG until at least 2030, and the U.S. is on pace to exceed that number this year.
But, analysts say the shift of U.S. cargoes will not last, as Asian and South American prices rise to attract more cargoes and clients seek court action to demand deliveries on contracts.
"The really brutal and harsh reality is that Europe is pricing out large parts of the emerging markets."
"In the long term, this is not sustainable and it's already causing energy shortages in south Asia," Gloystein said.
"Something has to give," he added.
Reporting By Jarrett Renshaw and Scott DiSavino; Timothy Gardner contributed to this article; Editing by Heather Timmons and Marguerita Choy
https://www.reuters.com/business/energy ... 022-07-26/
"Analysis: U.S. LNG exports to Europe on track to surpass Biden promise"
By Jarrett Renshaw and Scott Disavino
July 26, 2022
July 26 (Reuters) - When U.S. President Joe Biden promised European leaders in March that he would help secure new supplies of liquefied natural gas to offset shortages from Russia’s invasion of Ukraine, his pledge was greeted with scepticism.
After all, the U.S. LNG industry was already hitting its export limits and the global market is dominated by long-term contracts that can dictate where exported gas would go for twenty years at a time.
It turns out, however, that Biden's promise may have been far too modest.
The United States is on track to blow past Biden’s March commitment of an additional 15 billion cubic meters of LNG for Europe this year, according to a Reuters analysis of export data compiled by Refinitiv, and to triple the pledge.
The No. 1 natural gas producer became the top LNG exporter in the world in the first half of 2022, the U.S. Energy Information Administration (EIA) said on Monday.
The surge is good news for a Biden administration that has sought to strengthen energy ties with Europe as a way to combat Russia's influence.
But given the globe's voracious demand for natural gas, these European imports come at the expense of poorer nations like Pakistan and India, which could face energy deficits or be driven to new deals with Russia.
Through June of this year, the U.S exported about 57 bcm of gas as LNG with 39 bcm, or 68%, going to Europe, Refinitiv data shows.
That is compared with 34 bcm, or 35%, of LNG exports shipped to Europe for all of 2021.
That means the United States has already sent more gas to Europe during the first six months of 2022 than it did in all 12 months of 2021.
If exports to Europe continue at the same pace through the second half of 2022, the total increase over 2021 would be around 45 bcm.
However, the pace of exports slowed in June after a fire shut Freeport LNG, which provides around 20% of U.S. LNG processing.
Full operations are not expected till the year end.
Another challenge could be a well-above average Atlantic hurricane season, analysts said.
HIGHER PROFITS IN EUROPE
The unexpected shift is happening because shippers are willing to pay contractual penalties for failing to deliver to countries like Pakistan and diverting the cargoes to Europe, where the high price covers the fee and profit, analysts said.
Analysts who argued earlier Biden's goal was unattainable now say the industry, dominated by companies like Cheniere Energy Inc and TotalEnergies, has proved much more pliable than they expected.
"It has become much more flexible than most thought it could be just three months ago."
"If you have to do stuff, things get moved," Henning Gloystein, a director of energy and climate at the Eurasia Group, said.
But that has meant falling U.S. LNG imports in countries paying less.
Belgium, for example, saw its U.S. imports of LNG swell by some 650% while Pakistan saw its U.S. imports decline by 72%, data showed.
Benchmark gas prices in Europe have averaged $34.06 per million British thermal units (mmBtu) so far in 2022 compared with $29.99 in Asia and $6.12 in the United States .
That compares with average 2021 prices of $16.04 in Europe, $18.00 in Asia and $3.73 in the United States, data showed.
“The cargoes are going to go where the market demands it will go,” said Ed Hirs, an energy economist at the University of Houston.
STILL NOT ENOUGH
The February invasion by Europe’s top gas supplier has pushed already-high energy prices to records and prompted the EU to pledge to cut Russian gas use by two-thirds this year by hiking imports from other countries and boosting renewable energy.
Despite the unexpected increase from the United States, the EU still finds itself in a precarious position heading into the high-use winter season as Russia continues to threaten to withhold gas supplies.
The EU urged member states to cut gas usage by 15% until March as an emergency step.
Biden and European Commission President Ursula von der Leyen also announced a plan to form a task force to cut Europe's reliance on Russian fossil fuels, including gas.
The Commission is set to ensure that the EU is able to receive about 50 bcm of additional U.S. LNG until at least 2030, and the U.S. is on pace to exceed that number this year.
But, analysts say the shift of U.S. cargoes will not last, as Asian and South American prices rise to attract more cargoes and clients seek court action to demand deliveries on contracts.
"The really brutal and harsh reality is that Europe is pricing out large parts of the emerging markets."
"In the long term, this is not sustainable and it's already causing energy shortages in south Asia," Gloystein said.
"Something has to give," he added.
Reporting By Jarrett Renshaw and Scott DiSavino; Timothy Gardner contributed to this article; Editing by Heather Timmons and Marguerita Choy
https://www.reuters.com/business/energy ... 022-07-26/
Re: THE EUROPEANS
REUTERS
"Kremlin: Nord Stream 1 turbine not arrived yet, a second has defects"
Reuters
July 26, 2022
Summary
* Kremlin: second turbine showing defects
* Kremlin: first turbine has not arrived
* Medvedev: the cold is coming to Europe
* Lavrov: no proper explanation on turbine issue
MOSCOW, July 26 (Reuters) - The Kremlin said on Tuesday that a gas turbine for Nord Stream 1, Russia's biggest gas pipeline to Europe, had not yet arrived after maintenance in Canada and that a second turbine was showing defects.
The European Union has repeatedly accused Russia of resorting to energy blackmail but the Kremlin says shortfalls in supply have been caused by maintenance issues and the impact of Western sanctions.
Kremlin spokesman Dmitry Peskov said that the sanctions against Russia had critically complicated the work of Nord Stream 1, which is reducing gas supplies to Europe to just 20% of its capacity amid maintenance.
State-controlled gas giant Gazprom has said flows would fall to 33 million cubic metres per day, a fifth of the normal capacity, from Wednesday because it needed to halt the operation of a Siemens gas turbine at a compressor station on instructions from an industry watchdog.
This would halve the current, already reduced, level.
Turbines at the Baltic Sea Portovaya compressor station, which has eight compressors each with at least one turbine, push the gas through the 1,224 km pipeline under the sea to Germany, according to the Oxford Institute for Energy Studies.
"The removal of gas turbines from the compressor station site to carry out routine maintenance is unusual; the systems are usually designed so that any necessary work can be carried out on site," the institute said in a research note.
"However, the reason for sending the gas turbine to Canada, where it was reportedly manufactured, may have been that it needed major repairs and/or was due a major overhaul."
"It is unclear whether any of the other turbines will need to be sent to Canada for any repairs or major overhaul."
Russia expects the first turbine, serviced by Siemens Energy, to arrive from Canada after maintenance.
"Yes, indeed, there are some defects with the turbines."
"The turbine has not arrived after a major maintenance, it's on its way."
"We hope that it will happen... sooner rather than later," Peskov said.
"The situation is critically complicated by the restrictions and sanctions, which had been imposed against our country," Peskov said, adding that Nord Stream 1 would have worked normally without the sanctions.
Peskov added that a second turbine also had some defects, referring to the equipment which Gazprom is expected to stop on Wednesday.
Russian Foreign Minister Sergei Lavrov, speaking during a visit to Uganda, also said on Tuesday that Gazprom will have to switch off that turbine at the Portovaya compressor station of Nord Stream 1 due to security reasons.
He did not clarify what he meant.
'COLD IS COMING'
Russia has repeatedly cautioned that European customers will face serious price rises if the European Union goes ahead with plans to reduce reliance on Russia's vast energy resources.
Russia is the world's second largest oil exporter after Saudi Arabia and the world's largest exporter of natural gas.
Europe imports about 40% its gas and 30% of its oil from Russia, a point keenly emphasised by some Russian officials.
"The cold is coming soon," former Russian President Dmitry Medvedev, who is deputy chairman of Russia's Security Council, said on Telegram.
"Nobody has cancelled winter, and alternative supplies of gas, oil and coal are expensive or simply unrealistic," said Medvedev, who once served as chairman of Gazprom's board.
Lavrov said that Moscow had still not received a proper explanation about the status of the first turbine from the Nord Stream 1 gas pipeline that was serviced by Siemens Energy in Canada.
"No one can clearly explain to us in the documents, what the status is now, firstly, of this turbine, and other turbines that must undergo routine maintenance in Canada," Lavrov said.
Gazprom said on Monday it had received documentation on the turbine but some issues and risks remained.
The German company has said it saw no link between the turbine issue and the gas cuts implemented or announced by Gazprom.
Reporting by Reuters; editing by Guy Faulconbridge and Susan Fenton
https://www.reuters.com/business/energy ... 022-07-26/
"Kremlin: Nord Stream 1 turbine not arrived yet, a second has defects"
Reuters
July 26, 2022
Summary
* Kremlin: second turbine showing defects
* Kremlin: first turbine has not arrived
* Medvedev: the cold is coming to Europe
* Lavrov: no proper explanation on turbine issue
MOSCOW, July 26 (Reuters) - The Kremlin said on Tuesday that a gas turbine for Nord Stream 1, Russia's biggest gas pipeline to Europe, had not yet arrived after maintenance in Canada and that a second turbine was showing defects.
The European Union has repeatedly accused Russia of resorting to energy blackmail but the Kremlin says shortfalls in supply have been caused by maintenance issues and the impact of Western sanctions.
Kremlin spokesman Dmitry Peskov said that the sanctions against Russia had critically complicated the work of Nord Stream 1, which is reducing gas supplies to Europe to just 20% of its capacity amid maintenance.
State-controlled gas giant Gazprom has said flows would fall to 33 million cubic metres per day, a fifth of the normal capacity, from Wednesday because it needed to halt the operation of a Siemens gas turbine at a compressor station on instructions from an industry watchdog.
This would halve the current, already reduced, level.
Turbines at the Baltic Sea Portovaya compressor station, which has eight compressors each with at least one turbine, push the gas through the 1,224 km pipeline under the sea to Germany, according to the Oxford Institute for Energy Studies.
"The removal of gas turbines from the compressor station site to carry out routine maintenance is unusual; the systems are usually designed so that any necessary work can be carried out on site," the institute said in a research note.
"However, the reason for sending the gas turbine to Canada, where it was reportedly manufactured, may have been that it needed major repairs and/or was due a major overhaul."
"It is unclear whether any of the other turbines will need to be sent to Canada for any repairs or major overhaul."
Russia expects the first turbine, serviced by Siemens Energy, to arrive from Canada after maintenance.
"Yes, indeed, there are some defects with the turbines."
"The turbine has not arrived after a major maintenance, it's on its way."
"We hope that it will happen... sooner rather than later," Peskov said.
"The situation is critically complicated by the restrictions and sanctions, which had been imposed against our country," Peskov said, adding that Nord Stream 1 would have worked normally without the sanctions.
Peskov added that a second turbine also had some defects, referring to the equipment which Gazprom is expected to stop on Wednesday.
Russian Foreign Minister Sergei Lavrov, speaking during a visit to Uganda, also said on Tuesday that Gazprom will have to switch off that turbine at the Portovaya compressor station of Nord Stream 1 due to security reasons.
He did not clarify what he meant.
'COLD IS COMING'
Russia has repeatedly cautioned that European customers will face serious price rises if the European Union goes ahead with plans to reduce reliance on Russia's vast energy resources.
Russia is the world's second largest oil exporter after Saudi Arabia and the world's largest exporter of natural gas.
Europe imports about 40% its gas and 30% of its oil from Russia, a point keenly emphasised by some Russian officials.
"The cold is coming soon," former Russian President Dmitry Medvedev, who is deputy chairman of Russia's Security Council, said on Telegram.
"Nobody has cancelled winter, and alternative supplies of gas, oil and coal are expensive or simply unrealistic," said Medvedev, who once served as chairman of Gazprom's board.
Lavrov said that Moscow had still not received a proper explanation about the status of the first turbine from the Nord Stream 1 gas pipeline that was serviced by Siemens Energy in Canada.
"No one can clearly explain to us in the documents, what the status is now, firstly, of this turbine, and other turbines that must undergo routine maintenance in Canada," Lavrov said.
Gazprom said on Monday it had received documentation on the turbine but some issues and risks remained.
The German company has said it saw no link between the turbine issue and the gas cuts implemented or announced by Gazprom.
Reporting by Reuters; editing by Guy Faulconbridge and Susan Fenton
https://www.reuters.com/business/energy ... 022-07-26/
Re: THE EUROPEANS
REUTERS
"Nord Stream gas row deepens as Gazprom airs new complaints on turbine"
Reuters
July 29, 2022
MOSCOW, July 29 (Reuters) - Delivery of a Nord Stream 1 gas turbine to Germany from Canada after maintenance was not in line with the contract, Gazprom's senior manager said on Friday, stepping up criticism of manufacturer Siemens Energy.
The comments signalled a deepening of a row in which Russia has cited turbine problems as its reason for cutting gas supply via Nord Stream 1 - its main gas link to Europe - to just 20% of capacity from Wednesday.
Vitaly Markelov, Gazprom's deputy chief executive, also said Russia had complained repeatedly to Siemens Energy about problems with other turbines.
"We have repeatedly applied to the Russian representative office of Siemens about this, sent 10 letters."
"Siemens fixed no more than a quarter of the identified bugs," he said in a TV interview.
He cited the serial numbers of three other engines that needed repair by Siemens because of faults in May and June that had put them in a state of forced downtime.
Siemens Energy declined to respond to Markelov's comments.
The company referred to a previous statement made on Wednesday in which it said it had no access to the turbines on site and had not received any damage reports from Gazprom and so had to assume the turbines were operating normally.
The European Union disputes Russia's and Gazprom's argument that turbine problems are to blame for the sharp drop in supply through the pipeline that links Russia to Germany under the Baltic Sea.
The shortfall has raised the risk of shortages and gas rationing in Europe this winter.
Siemens Energy has previously countered Gazprom's criticism over its service by saying it is up to the Russian company to file customs documents for the turbine's return.
With both sides trading economic blows since Russia sent its troops into Ukraine on Feb. 24, the European Union has accused Russia of energy blackmail, something the Kremlin denies.
Markelov said the turbine that had been serviced in Canada had still not arrived back in Russia.
"It was sent to Germany, not to Russia, without Gazprom's consent," he said, adding that this created sanctions risks.
Gazprom also needs to send for repair other turbines from the Portovaya compressor station.
"There is no clarity that the maintenance of the gas turbine engines will not fall under the sanctions," Markelov said.
Reporting by Reuters; Editing by Mark Trevelyan, David Holmes and Jane Merriman
https://www.reuters.com/business/energy ... 022-07-29/
"Nord Stream gas row deepens as Gazprom airs new complaints on turbine"
Reuters
July 29, 2022
MOSCOW, July 29 (Reuters) - Delivery of a Nord Stream 1 gas turbine to Germany from Canada after maintenance was not in line with the contract, Gazprom's senior manager said on Friday, stepping up criticism of manufacturer Siemens Energy.
The comments signalled a deepening of a row in which Russia has cited turbine problems as its reason for cutting gas supply via Nord Stream 1 - its main gas link to Europe - to just 20% of capacity from Wednesday.
Vitaly Markelov, Gazprom's deputy chief executive, also said Russia had complained repeatedly to Siemens Energy about problems with other turbines.
"We have repeatedly applied to the Russian representative office of Siemens about this, sent 10 letters."
"Siemens fixed no more than a quarter of the identified bugs," he said in a TV interview.
He cited the serial numbers of three other engines that needed repair by Siemens because of faults in May and June that had put them in a state of forced downtime.
Siemens Energy declined to respond to Markelov's comments.
The company referred to a previous statement made on Wednesday in which it said it had no access to the turbines on site and had not received any damage reports from Gazprom and so had to assume the turbines were operating normally.
The European Union disputes Russia's and Gazprom's argument that turbine problems are to blame for the sharp drop in supply through the pipeline that links Russia to Germany under the Baltic Sea.
The shortfall has raised the risk of shortages and gas rationing in Europe this winter.
Siemens Energy has previously countered Gazprom's criticism over its service by saying it is up to the Russian company to file customs documents for the turbine's return.
With both sides trading economic blows since Russia sent its troops into Ukraine on Feb. 24, the European Union has accused Russia of energy blackmail, something the Kremlin denies.
Markelov said the turbine that had been serviced in Canada had still not arrived back in Russia.
"It was sent to Germany, not to Russia, without Gazprom's consent," he said, adding that this created sanctions risks.
Gazprom also needs to send for repair other turbines from the Portovaya compressor station.
"There is no clarity that the maintenance of the gas turbine engines will not fall under the sanctions," Markelov said.
Reporting by Reuters; Editing by Mark Trevelyan, David Holmes and Jane Merriman
https://www.reuters.com/business/energy ... 022-07-29/
Re: THE EUROPEANS
REUTERS
"German cabinet agrees to gas levy for consumers from October"
Reuters
August 4, 2022
BERLIN, Aug 4 (Reuters) - Germany's cabinet has agreed to introduce a planned levy on gas consumers from October to help suppliers hit by soaring gas import prices caused by Russia's invasion of Ukraine, the economy ministry said on Thursday.
The plan, announced last week, comes as Europe's biggest economy tries to reduce its dependence on Russian energy.
It is facing a collapse in gas supplies and soaring prices, raising fears of energy shortages and insolvencies among gas traders.
"The temporary levy is a result of the crisis caused by Russia."
"It is not an easy step to take, but a necessary one to guarantee heating and energy supply in private households and the economy," said Economy Minister Robert Habeck in a statement.
The levy on consumers, to be accompanied by targeted relief, is aimed at helping importers, especially Uniper, Germany's largest recipient of Russian gas, which is receiving a state bail-out.
Other companies include EnBW's gas division VNG.
The levy is expected to take effect from Oct. 1 and end on April 1, 2024, said the ministry.
Its exact size will be published in mid-August, said the ministry.
Habeck said last week it would be between 1.5 euro cents and 5 euro cents per kilowatt hour (Kwh), with the proceeds available to any company having to replace Russian gas.
Government and parliamentary sources have told Reuters it still has to be clarified how the levy will be applied to customers with fixed-price contracts.
Reporting by Christian Kraemer; Writing by Madeline Chambers; Editing by Janet Lawrence
https://www.reuters.com/business/energy ... 022-08-04/
"German cabinet agrees to gas levy for consumers from October"
Reuters
August 4, 2022
BERLIN, Aug 4 (Reuters) - Germany's cabinet has agreed to introduce a planned levy on gas consumers from October to help suppliers hit by soaring gas import prices caused by Russia's invasion of Ukraine, the economy ministry said on Thursday.
The plan, announced last week, comes as Europe's biggest economy tries to reduce its dependence on Russian energy.
It is facing a collapse in gas supplies and soaring prices, raising fears of energy shortages and insolvencies among gas traders.
"The temporary levy is a result of the crisis caused by Russia."
"It is not an easy step to take, but a necessary one to guarantee heating and energy supply in private households and the economy," said Economy Minister Robert Habeck in a statement.
The levy on consumers, to be accompanied by targeted relief, is aimed at helping importers, especially Uniper, Germany's largest recipient of Russian gas, which is receiving a state bail-out.
Other companies include EnBW's gas division VNG.
The levy is expected to take effect from Oct. 1 and end on April 1, 2024, said the ministry.
Its exact size will be published in mid-August, said the ministry.
Habeck said last week it would be between 1.5 euro cents and 5 euro cents per kilowatt hour (Kwh), with the proceeds available to any company having to replace Russian gas.
Government and parliamentary sources have told Reuters it still has to be clarified how the levy will be applied to customers with fixed-price contracts.
Reporting by Christian Kraemer; Writing by Madeline Chambers; Editing by Janet Lawrence
https://www.reuters.com/business/energy ... 022-08-04/
Re: THE EUROPEANS
Deutsche Welle
"Germany braces for social unrest over energy prices"
William Noah Glucroft, Deutsche Welle
7 AUGUST 2022
German officials have expressed fears that a worst-case winter of energy problems could prompt an extremist backlash.
How bad things get may depend on how well they manage the crisis – in policy and perception.
State and federal Lawmakers in Germany are exploring a sweeping set of measures to save energy, from turning off street lights to lowering building temperatures; and they are pleading with the public to cut consumption at home.
Whether those efforts spur a call to solidarity or a call to arms won't become clear until the cold sets in and bills come due.
Yet Chancellor Olaf Scholz is not in a wait-and-see mood, telling public broadcaster, ARD, last month that spiraling heating costs are a "powder keg for society."
In explicitly naming the elephant in the room, the chancellor and his government are on the hook for nipping social unrest in the bud.
"In using this 'powder keg' narrative, the chancellor is trying to make way for key decisions," Ricardo Kaufer, a professor of political sociology at the University of Greifswald, told DW.
"So all actors who could potentially stand in the way of measures are cajoled into compromise."
In other words, Scholz is signaling to his governing partners, political opposition, business leaders, and civil society that they bicker over policy responses at the country's peril.
This is a "lesson learned" from the pandemic, Kaufer said, when lawmakers often seemed unprepared to contain it, despite scientific predictions on how and when the virus would spread.
Their communication was more often reactive than proactive.
Measures and messaging
The Bundestag, the German parliament, has already passed legislation that hopes to insulate society's most vulnerable from price shocks.
At the same time, German utilities will be allowed to pass some of their increased costs onto consumers.
In crafting policy, officials are walking a fine line.
They want to help secure household finances, especially for low-wage earners, but not so much that they undermine the incentive to save energy.
More relief may follow the summer recess, however agreement on what that looks like, how much it will cost, and how it will get paid for is likely weeks away, at least.
The smallest of the parties in the governing coalition, the neoliberal Free Democrats (FDP), control the finance ministry, which gives them significant power of the purse.
Its minister, Christian Lindner, has made clear he intends to use that power sparingly, as he stands up for his party's values of low tax, low spending, and low regulation.
The FDP's bigger partners, Scholz's center-left Social Democrats and the environmentalist Greens, are pushing for a more generous helping hand.
Even if the government gets the measures right, they could still get the messaging wrong, which political scientists say can be just as important in steering public sentiment.
As the pandemic showed, money and resources are only half the battle; clear and consistent communication is the other half.
"Perceptions are decisive," Evelyn Bytzek, a professor of political communication at the University of Koblenz-Landau, told DW.
"Ultimately, we all act based more on what we perceive to be true than what is true."
Symbolism is a powerful tool in maintaining public support, Bytzek said.
She pointed to Gerhard Schröder's visit to flood-stricken parts of eastern Germany in 2002, which gave him a boost in his reelection campaign for chancellor.
He went onto win a few weeks later.
Scholz won last year's election in part due to his Merkel-like passive leadership style.
Now that could become a liability -- and stoke unrest -- if the public feels their ship of state is without a captain at the helm with an iceberg ahead.
"Crisis is not just a danger, but also an opportunity to generate more trust when crisis management is well perceived," Bytzek said.
Scholz's deputy, the Greens' Robert Habeck, seems to understand that.
As economy minister, Habeck has the lead on energy policy and has been forced to make hard choices that often contradict his own environmentalist credentials.
Polls show he has won points for regularly explaining the rationale behind those decisions.
Though there are limits to what communication can do.
Habeck was booed at townhall events last week.
However, those protests were more anti-war than anti-democratic.
Evaluating the risk
The Federal Interior Ministry told DW that protests of similar magnitude to those against pandemic restrictions are foreseeable, depending on how much the cost and supply of energy burden society.
"We can assume that populists and extremists will again try to influence protests to their liking," Britta Beylage-Haarmann, a ministry spokesperson, told DW in a statement.
"Extremist actors and groups in Germany can lead to a growth in dangers if corresponding social crisis conditions allow for it."
The Federal Police, which fall under the ministry, told DW they have "no insights" into specific threats arising from the crisis.
Perception also plays a role in how much unrest can shake a country.
Querdenker and others who have taken to the streets to challenge state authority during the pandemic are loud, but they have never represented more than a small minority of public opinion.
Still, they have received an outsized share of media and political attention.
Political sociologists like Greifswald University's Kaufer say protest movements stand out more in a country like Germany, where consensus-based political culture and federal power-sharing dissuade the instrumentalization of social discontent than elsewhere in Europe.
France, for example, has a reputation for confrontation.
Instability in Germany often has a negative connotation, he said, linked to events like bloody street battles amid hyperinflation in Weimar-era Germany, which gave rise to the Nazis.
"There has been a failure of discourse among progressive forces to recognize positive examples in German history," Kaufer added.
"There is a fear of protest, that people will take action without the legitimacy of processes like voting."
He cited East German street protests in 1953 and the peaceful revolution of 1989, and the West German anti-nuclear movement in the 1970s and 80s, as examples that deserve a stronger anchor in Germany's collective memory.
Inequality means instability
Longer-term risks to social cohesion, however, don't end with the coming of spring.
Germany was once one of Europe's most egalitarian countries, in which class and social status had less influence in determining one's success in life.
That is changing, as Germany follows a general trend towards growing income inequality.
"We're seeing that social mobility can no longer address social inequality," Susanne Pickel, a comparative politics professor at the University of Duisberg-Essen, told DW.
Inflation and energy prices will disproportionately impact the country's most vulnerable, according to economic models, as low earners have less disposable income to absorb increased costs.
That also makes them more susceptible to anti-government rhetoric than other income groups.
"Pandemic, war, and inflation endanger the lower middle class."
"If we can't manage to stabilize them, then their fears of being permanently pushed down grow," Pickel said, "then we may see more people take to the streets in Germany."
"And even more virulent, agreement with the [far-right populist] AfD and the appearance of solutions from far-right populists can change voting behavior."
Edited by: Rina Goldenberg
https://www.msn.com/en-us/news/world/ge ... a66c2a5cf1
"Germany braces for social unrest over energy prices"
William Noah Glucroft, Deutsche Welle
7 AUGUST 2022
German officials have expressed fears that a worst-case winter of energy problems could prompt an extremist backlash.
How bad things get may depend on how well they manage the crisis – in policy and perception.
State and federal Lawmakers in Germany are exploring a sweeping set of measures to save energy, from turning off street lights to lowering building temperatures; and they are pleading with the public to cut consumption at home.
Whether those efforts spur a call to solidarity or a call to arms won't become clear until the cold sets in and bills come due.
Yet Chancellor Olaf Scholz is not in a wait-and-see mood, telling public broadcaster, ARD, last month that spiraling heating costs are a "powder keg for society."
In explicitly naming the elephant in the room, the chancellor and his government are on the hook for nipping social unrest in the bud.
"In using this 'powder keg' narrative, the chancellor is trying to make way for key decisions," Ricardo Kaufer, a professor of political sociology at the University of Greifswald, told DW.
"So all actors who could potentially stand in the way of measures are cajoled into compromise."
In other words, Scholz is signaling to his governing partners, political opposition, business leaders, and civil society that they bicker over policy responses at the country's peril.
This is a "lesson learned" from the pandemic, Kaufer said, when lawmakers often seemed unprepared to contain it, despite scientific predictions on how and when the virus would spread.
Their communication was more often reactive than proactive.
Measures and messaging
The Bundestag, the German parliament, has already passed legislation that hopes to insulate society's most vulnerable from price shocks.
At the same time, German utilities will be allowed to pass some of their increased costs onto consumers.
In crafting policy, officials are walking a fine line.
They want to help secure household finances, especially for low-wage earners, but not so much that they undermine the incentive to save energy.
More relief may follow the summer recess, however agreement on what that looks like, how much it will cost, and how it will get paid for is likely weeks away, at least.
The smallest of the parties in the governing coalition, the neoliberal Free Democrats (FDP), control the finance ministry, which gives them significant power of the purse.
Its minister, Christian Lindner, has made clear he intends to use that power sparingly, as he stands up for his party's values of low tax, low spending, and low regulation.
The FDP's bigger partners, Scholz's center-left Social Democrats and the environmentalist Greens, are pushing for a more generous helping hand.
Even if the government gets the measures right, they could still get the messaging wrong, which political scientists say can be just as important in steering public sentiment.
As the pandemic showed, money and resources are only half the battle; clear and consistent communication is the other half.
"Perceptions are decisive," Evelyn Bytzek, a professor of political communication at the University of Koblenz-Landau, told DW.
"Ultimately, we all act based more on what we perceive to be true than what is true."
Symbolism is a powerful tool in maintaining public support, Bytzek said.
She pointed to Gerhard Schröder's visit to flood-stricken parts of eastern Germany in 2002, which gave him a boost in his reelection campaign for chancellor.
He went onto win a few weeks later.
Scholz won last year's election in part due to his Merkel-like passive leadership style.
Now that could become a liability -- and stoke unrest -- if the public feels their ship of state is without a captain at the helm with an iceberg ahead.
"Crisis is not just a danger, but also an opportunity to generate more trust when crisis management is well perceived," Bytzek said.
Scholz's deputy, the Greens' Robert Habeck, seems to understand that.
As economy minister, Habeck has the lead on energy policy and has been forced to make hard choices that often contradict his own environmentalist credentials.
Polls show he has won points for regularly explaining the rationale behind those decisions.
Though there are limits to what communication can do.
Habeck was booed at townhall events last week.
However, those protests were more anti-war than anti-democratic.
Evaluating the risk
The Federal Interior Ministry told DW that protests of similar magnitude to those against pandemic restrictions are foreseeable, depending on how much the cost and supply of energy burden society.
"We can assume that populists and extremists will again try to influence protests to their liking," Britta Beylage-Haarmann, a ministry spokesperson, told DW in a statement.
"Extremist actors and groups in Germany can lead to a growth in dangers if corresponding social crisis conditions allow for it."
The Federal Police, which fall under the ministry, told DW they have "no insights" into specific threats arising from the crisis.
Perception also plays a role in how much unrest can shake a country.
Querdenker and others who have taken to the streets to challenge state authority during the pandemic are loud, but they have never represented more than a small minority of public opinion.
Still, they have received an outsized share of media and political attention.
Political sociologists like Greifswald University's Kaufer say protest movements stand out more in a country like Germany, where consensus-based political culture and federal power-sharing dissuade the instrumentalization of social discontent than elsewhere in Europe.
France, for example, has a reputation for confrontation.
Instability in Germany often has a negative connotation, he said, linked to events like bloody street battles amid hyperinflation in Weimar-era Germany, which gave rise to the Nazis.
"There has been a failure of discourse among progressive forces to recognize positive examples in German history," Kaufer added.
"There is a fear of protest, that people will take action without the legitimacy of processes like voting."
He cited East German street protests in 1953 and the peaceful revolution of 1989, and the West German anti-nuclear movement in the 1970s and 80s, as examples that deserve a stronger anchor in Germany's collective memory.
Inequality means instability
Longer-term risks to social cohesion, however, don't end with the coming of spring.
Germany was once one of Europe's most egalitarian countries, in which class and social status had less influence in determining one's success in life.
That is changing, as Germany follows a general trend towards growing income inequality.
"We're seeing that social mobility can no longer address social inequality," Susanne Pickel, a comparative politics professor at the University of Duisberg-Essen, told DW.
Inflation and energy prices will disproportionately impact the country's most vulnerable, according to economic models, as low earners have less disposable income to absorb increased costs.
That also makes them more susceptible to anti-government rhetoric than other income groups.
"Pandemic, war, and inflation endanger the lower middle class."
"If we can't manage to stabilize them, then their fears of being permanently pushed down grow," Pickel said, "then we may see more people take to the streets in Germany."
"And even more virulent, agreement with the [far-right populist] AfD and the appearance of solutions from far-right populists can change voting behavior."
Edited by: Rina Goldenberg
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