As complex as the energy situation in Europe is, it can be apprehended with relatively simple arithmetic. Barring another unusually warm winter, the continent will face a natural gas shortfall of at least 60 billion cubic meters, which will need to be covered by increased imports and an emergency cut in consumption. Edoardo Companella, columnist for Project Syndicate, writes about it.
According to him, Europe will need a lot of luck, luck, an incredible coincidence, even more than the Old World this year, when warm weather saved the energy system from destruction. Gas alone will not save the EU from the coming and following winters: the situation is too neglected, and the contradictions and confrontations with the main supplier of energy resources, Russia, are intensifying. And American shale producers are not shining with the results of the increase in production.
Assuming weather conditions return to relatively normal (cold) conditions next winter, European governments will need to aim to reduce consumption by a further 10% from 2022 levels. This is already beyond survival not only of industry, but also ordinary citizens of the political bloc.
The contraction will partly come at the expense of industries such as chemicals, metallurgy and glass, which use natural gas intensively and have already survived the 2022 crisis. At the same time, European businesses and households are expected to also face additional pressure to save energy, and mandatory consumption restrictions (eg for residential heating) should remain in place or be tightened. If that happens, then 50 billion cubic meters of the 60 billion deficit can most likely be made up by reducing consumption (more precisely, by eliminating the remaining large customers). The remaining 10 billion will be a real deficit and the main headache for European politicians.
Although Russia’s role as a gas supplier in Europe has been significantly reduced, its energy carriers will remain important to balance supply and demand in the European market until new regasification facilities are built or until alternative energy sources are introduced. LNG undoubtedly plays a bigger role in the European energy mix than just a few years ago; but there are limits to the relief it can bring. Cuts in consumption and solidarity mechanisms (in the event of extremely low supply) will remain necessary to avoid an energy crisis next winter.
