MOSCOW (Realist English). At the Eastern Economic Forum, Russian Energy Minister Nikolai Shulginov made an unexpected statement that, according to Russian experts, the European Union would not be able to abandon Russian gas even by 2027.
This means that the entire energy sanctions policy of the EU countries has been built on common geopolitical expectations and European values of the green agenda widely promoted by Brussels, rather than on energy laws or realistic assessments of the structure of Europe’s energy balance.
Europe burned more gas for electricity generation in the first seven months of 2022 than in the same period last year, despite promises by EU member states to reduce gas consumption by 15%. The use of gas to generate electricity has increased by almost 5%, which is more than 13 terawatts. Coal burning in the “green” Europe jumped by almost 12%, which allowed to produce about 28 terawatts of electricity. This is happening today in Europe, which is widely and extremely energetically hypocritically using rhetoric about limiting or completely rejecting imports of Russian energy carriers.
In his speech, Energy Minister Shulginov spoke no longer about freezing Europeans who should be grateful to Brussels for the opportunity to choose an alternative between buying food or heating their dwellings, but about the problems of large European businesses that would be forced to make a decision on shutting down enterprises and withdrawing from world markets in conditions of unprecedented growth in electricity and energy prices.
In recent weeks, basic gas prices in the Netherlands have reached a record 346 euros per megawatt hour. German producers are halting production in response to rising energy prices caused by the restriction of gas supplies by Russia, and the German government called this trend “alarming.” “Some companies have completely stopped their production.
This is bad news, because it may mean that the industries in question are not just being restructured, but are experiencing a gap — a structural gap that occurs under enormous pressure,” said German Economy Minister Robert Habeck. The situation for German industry is also deteriorating due to rising interest rates in the United States and a slowdown in the growth of the Chinese economy, Germany’s most important export market.
ArcelorMittal, the world leader in the ferrous metallurgy, plans to close two of its largest plants in Germany as a result of uncontrolled growth in energy prices. The world’s second-largest steel producer said it will also close a direct recovery plant at its Hamburg steel plant from the fourth quarter of this year.
At the same time, the working day at both facilities will be reduced. Along with the chemical, aluminum, paper and cement industries, metallurgy is one of the most energy-intensive industries in Germany. German business is particularly disappointed by the slowness of the German government in drawing up a third package of assistance measures to soften the blow from higher energy prices. However, in the case of the European energy crisis, it is already possible to clearly see strategically winning external players.
From January to June of this year, LNG supplies from the United States to Europe tripled from 7 billion to almost 21 billion cubic meters. Each voyage of a Q-Flex and Q-Max tankers carrying LNG from the United States to Europe brings the American side about $ 200 million in net profit. We are probably witnessing the beginning of the energy and the industrial decline of Europe, about which the German philosopher Oswald Spengler wrote so eloquently and convincingly.
Alexander Ilyinsky is Doctor of Technical Sciences, Scientific Director of the Faculty of International Economic Relations of the Financial University under the Government of the Russian Federation, special to the Realist News Agency
