Stop to Russia’s gas reaching Europe through the Gazprom Nord Stream 1 pipeline, while talking about rationing and energy lockdown has become the norm. As announced by the Russian energy giant Gazprom days ago, the halt to supplies will start today, Wednesday 31 August, to last for three days until Saturday 3rd September.
I European natural gas prices they rise again, after the strong turnaround of the last sessions. Dutch futures contracts maturing in October rise to + 5.5%, on the back of fears about the risk that Moscow the blackmail of gas against Europe is increasingly being carried out , in response to the sanctions launched by the West. In Amsterdam, prices go up at 8.35 am Amsterdam time up to 277.50 euros per megawatt hour. The UK equivalent contract with expiry in October also rises by approximately 7%.
Yesterday, the French utility Engie had already announced the stop of natural gas supplies from Russia. Gazprom’s deliveries to Engie had already decreased ‘substantially’ since the invasion of Ukraine, with a recent monthly supply of around 1.5 terawatt hours. The figure compares with the group’s total annual supplies in Europe of over 400 terawatt hours.
Gazprom stated today that the stop to Engie took place due to disagreements on the prices of supplies.
Meanwhile, Engie is holding talks with the Algerian Sonatrach as part of its strategy to diversify gas supplies beyond Russia.
Gas: meeting between Eni and president of Egypt al-Sisi
As we know, Italy is also looking at Algeria. And yesterday Eni’s number one, theChief Executive Officer Claudio Descalzi, met with the president of Egypt Abdel Fattah al-Sisi, to discuss the activities of the Italian giant in the country.
In this regard it is worth mentioning the ‘No to energy from Egypt’ by Enrico Letta’s Democratic Party. In an article of last April 15, La Repubblica wrote:
“The Pd did not like the agreement signed by the Eni group with Egypt for the supply of liquefied natural gas: up to 3 billion cubic meters in 2022 to help Europe, and in particular Italy, to achieve energy independence from Russia “. “I have a lot of doubts”, Enrico Letta had told Radio1 -“The Regeni affair it goes beyond the single personal drama, it is a symbol of the need to defend human rights and to do justice. Therefore, our request to the government to be stronger and more demanding towards the Egyptians is clear ”. It is true that that government, ergo the Draghi government, is now running out.
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Italian politics paws: in view of the upcoming ones political elections next September 25ththere is no shortage of proposals of all kinds from the various parties in search of votes.
For its part, the EU continues to reflect on possible measures to be taken to make itself progressively more independent from the gas of Vladimir Putin’s Russia which, after the sanctions inflicted by the West due to the invasion of Ukraine and the war unleashed, shake the gas blackmail weapon more than ever.
In recent weeks, Moscow has already drastically reduced its natural gas supplies to Europe, to the point that the flows passing through Nord Stream 1 barely represent 20% of the volumes which had been previously agreed. The stop of gas supplies these days, motivated by the need to start maintenance work on the Nord Stream pipeline 1, rekindles the fear that Putin may eventually decide on a definitive halt to the gas supply. But a reassurance in the last few hours has come from Russia, which has not spared Europe, however, a thrust.
Gas: Moscow attacks Europe, sanctions are to blame
Asked about when gas supplies to Germany will be restored, the Kremlin spokesman Dmitry Peskov said that “There is a guarantee that, apart from the technical problems caused by the sanctions, nothing will interfere with the offer”.
And again: Western governments “They have imposed sanctions on Russia, and it is this that does not allow normal maintenance and repair work” (reference to the non-arrival to Russia of key components to ensure pipeline operations). The Russia it has completely cut its gas supply to Bulgaria, Denmark, Finland, the Netherlands and Poland.
“Putin is using energy as a weapon, bringing Europe to the brink of an energy crisis through the price boom “said Danish Prime Minister Mette Frederiksen, according to the German website DW.com.
The reduction or, in some cases, the total stop of the offer risks fueling further the scourge of #carobollette and, more generally, of inflation, which in Europe has already been galloping for some time. It is true that Gazprom had already interrupted the gas supply through Nord Stream 1 in July, among other things for even longer (10 days), always citing the need to start maintenance work as a reason. But the (unscheduled) works that led to the suspension that took place today were announced with less than two weeks’ notice and were decided not by the company. Nord Stream AG, but directly from Gazprom.
Il #carobollette haunts Italians and all of Europe, in view of the arrival of the colder seasons: the words rationing and energy lockdown fill the pages of newspapers more and more. On the other hand, these would be measures that Brussels has in the pipeline and which should churn out in the coming days.
Marcegaglia: ‘as in the euro crisis or pandemic’
Sounds the alarm interviewed by La Repubblica Emma Marcegaglia, former president of Confindustria and Eni, who leads the Marcegaglia group. “We are in a moment comparable to the euro crisis of 2010 or the pandemic. Urgent measures are needed on energy prices at European level or the single market risks breaking down and the recession will be inevitable, with long-term consequences ”.
According to Marcegaglia “these energy prices, for a manufacturing country like Italy, are not sustainable. Our companies have to compete with the American ones, which pay seven times less, but also with the Spanish and French, which have controlled prices. The risks of not staying on the market and closing are real. This is added to the poverty alarm for families: we must act now ”.
What to do then?
“The European roof is the most useful solution to prevent Europe from shattering, the only structural one. There is also talk of separation between electricity and gas prices, a positive measure, but which would still be penalizing for Italy, because we are the country with the highest share of energy production from methane ”.
Confartigianato: without reforms, massacres of companies
Confartigianato also speaks clearly of energy lockdown, after having “Calculated the impact on MPI (micro and small businesses) of the energy crisis andsoaring gas prices “.
“In detail, the Confartigianato survey highlights that the increases in the price of energy for small companies with consumption up to 2000 MWh translates into higher costs, between September 2021 and August 2022, by 21.1 billion euros compared to the previous twelve months, equal to 5.4% of the added value created by the MPI “.
“An unprecedented blow that risks becoming even bigger: if electricity prices do not fall in the next four months, the largest costs for small business owners will rise in 2022 to 42.2 billion more than in 2021“.
“The situation – underlines the President of Confartigianato Marco Granelli – it is unsustainable. Among our companies they multiply cases of energy lockdown and many entrepreneurs risk closure. Immediate and equally rapid structural reforms are needed to bring energy prices back under control e averting a massacre of businesses and an unprecedented crisis “.
“According to Granelli – we still read in the note from Confartigianato – the measures already implemented by this Executive must immediately be confirmed and strengthened: elimination of general system charges for electricity and gas, extension of the tax credit on electricity and gas costs for non-energy-intensive and non-gas-intensive companies. Furthermore a European ceiling must be set on the price of gas and the revenue calculated on extra-profits must be recovered, in order not to aggravate the situation of the public budget, and a gesture of responsibility and solidarity by energy companies is needed to safeguard the entire national production system. They must also be supported investments in renewable energies and in the diversification of supply sourcesin particular to create Energy Communities and to increase self-production “.
“Among the interventions requested by the President of Confartigianato – it still reads – also the reform of energy taxation which today reaches 51% of the bill and which penalizes with greater burdens the small businesses that consume less, in defiance of the ‘polluter pays’ principle ”. “Many of our companies risk an energy lockdown and closure. The situation is unsustainable – commented the president of Confartigianato Ancona Pesaro and Urbino Graziano Sabbatini, according to what was reported by the Resto del Carlino –. Immediate and equally rapid structural reforms are needed to bring energy prices back under control and avert a massacre of companies and an unprecedented crisis ”. E “The sectors most affected are those of glass, ceramics, cement, paper, metallurgy, chemicals, textiles, rubber and plastics and food”.
“In Italy – notes Confartigianato – the speed of growth in consumer electricity prices is significantly higher than in the European Union: in fact, in July 2022, the price of electricity in our country increased by 85.3% compared to twelve months earlier, compared to + 35.4% of the Eurozone average and, in particular, by +18.1 % of Germany and + 8.2% of France “.
Energy lockdown: what will the EU do?
What can Italy do and, given its membership of the EU, what can the European Union do?
Yesterday, the president of the EU Commission Ursula von der Leyen announced in a speech at the Baltic Sea Energy Security Summit in Copenhagen that it has been achieved in the European Union “An average filling of the storage areas equal to 80%”, therefore equal to the objective “Agreed for this year”.
In the announcement a few days ago, Gazprom reported that flows will resume at the rate of 33 million cubic meters per day at the end of the maintenance period, “Unless further malfunctions are identified”.
This means that the flows are expected to restart at an amount equal to 20% of capacity, the same level that has been supplied to Europe through Nord Stream 1 since the end of July, after the cuts in supplies in surplus since the end of that month.
The ghosts of a cold winter, of an energy lockdown for companies and in general a rationing of consumption and use of gas caused gas prices to soar in the preceding months in Europe.
After Gazprom announced the three-day suspension started today, last August 22, the price of natural gas TTF (European benchmark) has broken the threshold of 280 euros at MWh on the square in Amsterdamflying up to 282.6 euros.
Then it has retraced in the last few days. Today it goes back to climbing around those levels. Winter is not that far off.