Russian gas flows via Yamal pipeline to Germany halt, bids remain
reuters.com
reuters.com
If others are interested, this video has a great overview: https://www.youtube.com/watch?v=If61baWF4GE
It's understandable that there are a ton of chemical refineries near the mouth of the Mississippi because it allows for easier transport of refined goods to other countries. Less understandable when they're everywhere else in the state, except for the part where local governments give quarter-century and longer sweetheart tax break deals for these companies to come in, pollute the local environment, and pay no taxes on the real estate they're operating on. One of the main reasons that the education and social services systems in the state are so horrendously poor is because there's no tax revenue.
And even by those standards, Russia is a kleptocrat's wet dream.
Since new investment into fossil fuel projects will go to nearly zero from here (and old equipment becomes defunct unless it is replaced), expect there gas/oil exports to decline significantly in the next years/decades. Putin didn't only mess up Ukraine now, he also wrecked his own country for at least a generation to come.
What Putin has done to Russia is like if an American president had invaded a neighbour and the result was simultaneously $4 trillion central bank assets held abroad getting frozen, most of the billionaires becoming personae non grata in half the planet, a lot of smart people leaving the country as quickly as possible, the stock markets crashing about as hard as the Great Depression, direct refusal by major shipping companies to deal with the nation, and the currency halving relative to everything else, while also finding the hard way that all the military hardware had been “maintained” with cheap lookalike products and the cost difference pocketed by corruption at an unknown part of the chain.
They can’t bear to consider that this is something of a last hurrah as Europe tries to wean themselves from the petro drug. There’s plenty of non-petroleum-related business going on in Texas, but the semi-rural power base relies on oil to stay rich.
Map:
https://www.nationalgeographic.org/photo/europe-map/
It's a bit misleading since it doesn't show Nordstream 1 which runs under the Baltic sea to Germany.
EDIT: Here's a better map. The above is outdated
https://upload.wikimedia.org/wikipedia/commons/d/d7/Major_ru...
That would only hurt Ukraine's allies. Russia is probably going to end up pivoting to exporting energy to China, anyway.
Russia's going to see this invasion through. It's clear that there's not some "one weird [economic] trick" that will get them to turn around and go home. The only way that's going to happen is if they're defeated militarily.
That doesn't appear to be correct. It apparently has a pipeline, also ships LNG, and is building an even bigger pipeline to come online in a couple years:
https://www.reuters.com/world/asia-pacific/exclusive-russia-...
> Feb 4 (Reuters) - Russia has agreed a 30-year contract to supply gas to China via a new pipeline and will settle the new gas sales in euros, bolstering an energy alliance with Beijing amid Moscow's strained ties with the West over Ukraine and other issues.
> Gazprom , which has a monopoly on Russian gas exports by pipeline, agreed to supply Chinese state energy major CNPC with 10 billion cubic metres of gas a year, the Russian firm and a Beijing-based industry official said.
> First flows through the pipeline, which will connect Russia's Far East region with northeast China, were due to start in two to three years, the source said in comments that were later followed by an announcement of the deal by Gazprom.
> Russia already sends gas to China via its Power of Siberia pipeline, which began pumping supplies in 2019, and by shipping liquefied natural gas (LNG). It exported 16.5 billion cubic metres (bcm) of gas to China in 2021.
The sanctions have conveniently carved out exceptions for settling energy, wheat, barley, and other commodity contracts, and it's these contract settlements that have prevented the Ruble's 50% collapse from becoming a 90% collapse.
Starving the West of energy and food would definitely be a fun bargaining chip and/or tit-for-tat escalation play, but I don't think the Russian economy has the stomach for it.
Russia sells gas in Europe for a profit. In China, not so much. Turning off the gas to Europe means turning off the majority of its income, it's not going to happen.
Would it?
Surely a few days of gas exports aren't that important to their economy, just because they can average the losses over many many more days of gas exports.
Now europe has a reason to let russia win, and repair the pipeline. A few days without heating would damage europe (though I'm unsure how many days worth of gas europe has stored).
I guess I could see it hurting Russia, because they lose a valuable resource and the threat to cut it off, but I could also see it helping them.
Harming the pipeline would harm Ukraine financially.
Maybe Ukraine has refused since 2014 to allow eastern Ukraine (ethnic Russian) to vote on leaving due to oil wealth in that area?
Freshwater is typically the object of hypothetical water wars, and in this case Russia wants warm (salt) water for naval power projection.
This is probably more of a coastline/harbour war.
Update: I just saw he's published a newer book as well, https://www.amazon.com/New-Map-Energy-Climate-Nations/dp/159... "The New Map: Energy, Climate, and the Clash of Nations" which I haven't read, but probably just updates the story as it evolved over the past 10 years.
Oil strategy is tied to everyone's military/political thinking. Especially the top oil producers like Russia, US, etc. US was the top oil producer from 1850s to 1950s. It's one of the reasons we became a world power. We aren't maintaining military bases in saudi arabia because we are fans of islam. We didn't invade iraq because of freedom or democracy. We've been trying to topple venezuela for 2 decades because they have the largest oil reserves in the world. Some even think we are suddenly concerned about muslims in xinjiang because the chinese found oil there.
Germany invaded the soviet to take the baku oil fields. Oil has been central to most major world invents the last 150 years. What do you think our issue with iran is? Their huge oil and gas fields. You could argue the ukraine war is about oil and gas too.
If we ever got fusion energy or anything like that, one of the major sources of war would be gone.
Now people may begin to understand why Biden's son was installed in 2014 on board of directors of a Ukraine oil producer at 50,000 USD per month. It was not by happenstance nor for knowledge of oil & gas. https://www.bbc.com/news/blogs-echochambers-27403003
As far as "bids" remaining, it could be something as benign as not having any demand at the price, or currency/volatility issues.
They therefore cap the price they pay to what is available on the open LNG market, if the regular supply does not come through.
https://en.wikipedia.org/wiki/Russia%E2%80%93Ukraine_gas_dis...
Historically, LNG import terminals are concentrated in East Asia, which is generally too far away from major gas producers for a pipeline to be worthwhile to build but the energy consumption was high enough to warrant investing in such infrastructure. The US also built several LNG import terminals, but then the fracking boom caused so much natural gas to be produced that several of these were converted into LNG export terminals instead.
One of the side effects of the costs of building LNG infrastructure is that natural gas prices are very heavily regionalized: natural gas is far cheaper in the US (where it's pipeline delivery) than it is in Japan (with LNG imports).
> Is LNG route open for Russia?
I am not an expert on these affairs, but I believe Russia doesn't have a lot of LNG export capability at the moment, and LNG export terminals are not something quickly built. It's more likely to me that Russia shifts its gas exports away from Europe and into China via existing pipelines, rather than investing in LNG export capabilities.
(Some regions are sparse because don't really use gas outside specialized industrial uses)
Per Wikipedia, Nordstream 1 can deliver 55 G(m^3)/yr of natural gas. Per a US government source (https://www.eia.gov/todayinenergy/detail.php?id=50598), the United States has an LNG export capacity of about 12 G(ft^3)/day, or about 120G(m^3)/yr.
I imagine the operational costs of a direct pipeline are lower than the cost of liquefaction, transport, and re-gasification, but from the notice that LNG exists this is probably has an O(1) effect on price, not O(10).
Fortunately, Europe is also beginning to exit "this winter," so the energy situation is less dire than if this invasion had occurred in December going into January.
GP did that while also going from day to year, and the math checks out
Betting on Russia needing the income more than we need the resources.
Power will go out completely around here and partially in many other regions, but we can live through that.
Having solar (plus wind and batteries) is a major boon, and this would undoubtedly drive demand through the roof once people have no choice. Sadly, there isn't enough supply for everyone, especially power hungry industrial sites, and trucks/cars still run on fuel.
Solar concentrators would be easy to start producing locally, but they don't run well in cold temperatures and cloudy weather, plus they still need batteries of some sort.
Time to get started.
That being said, people are dying because of cheap power and gas. I know it's easy for me to say halfway across the world from behind a keyboard, but I really hope you guys elect to have your power shut off (If that's what it takes) to help the people of the Ukraine. Russia knows Europe is energy dependent on it, and it's the one area we haven't totally cut them off on. It's a small sacrifice that would save a hundred thousand lives.
In the midwest, the grid operators had a plan to divert available power to critical places first like hospitals, traffic lights, etc. It was freezing hold and I had power for 45m every 2 hours for a few days. I survived, there were places I could go, life went on.
Notice that it was only Texas utilities that experienced the most major issues.
A poorly regulated electrical market doesn't make a poor user experience. In fact, it was government meddling that created the crisis: Forced closure of coal plants before suitable replacements that could withstand 100 weather year events were available. The free market in Texas has and was leaps and bounds ahead of other markets in green energy production. Texas has also wanted to build countless nuclear projects that are stonewalled by the NRC and other green energy projects that die due to EPA or other local agencies. Believe it or not, green energy companies play dirty too and leverage government bureaucracy to stifle competition and expansion of green energy.
Secondly, it was not Only Texas. I live in Kansas and travel to Missouri weekly and we certainly had outages. The reason is all of these areas are covered by the "Southwest Power Pool" which is a generation pool which agree to sell energy to each other and help out during extreme events (an oversipmlication, but good enough for a HN comment). Texas operators trade energy in multiple markets so nearby locations were affected. My home state, produces nearly 2/3 of its energy from green sources: wind and nuclear and the excess is sold to the SPP and can be consumed in Texas.
Texas is in fact the _ideal_ energy market, as new ideas can compete immediately and directly and operate on small scales. We'd be doing ourselves a huge favor to operate more grids like this as it lower the entry bar for clean energy startups.
ERCOT was down easily 30-35GW (40-50%) of generation and cut power for days across large swaths of the state. SPP had outages, but not nearly as extensive in terms of MW shortfall, number of customers impacted, or duration of the impact.
> My home state, produces nearly 2/3 of its energy from green sources: wind and nuclear and the excess is sold to the SPP and can be consumed in Texas.
The only part of Texas it can really be consumed in are the parts of Texas served by SPP in the extreme NOrth (that are interconnected with the rest of the Eastern Interconnection). There are a couple small (<1GW) DC tie lines into ERCOT, but not nearly enough to do the sort of bulk power transport that would've been helpful during last February.)
> The reason is all of these areas are covered by the "Southwest Power Pool" which is a generation pool which agree to sell energy to each other and help out during extreme events (an oversipmlication, but good enough for a HN comment). Texas operators trade energy in multiple markets so nearby locations were affected.
SPP and ERCOT both have 'generation pools' and markets that enable them to serve load across their service areas. What SPP has that ERCOT does not are extensive connections to neighboring pools (MISO, PJM, etc.) and more adequately winterized generation and fuel supply infrastructure. The CEO of SPP gave an interview on an energy podcast last spring where she directly credits the ability bring in power from PJM and MISO as helping SPP serve its load. That sort of option wasn't even available to ERCOT.
Notably, the other option unavailable to ERCOT is exporting/selling wind power to neighboring ISO's.... The Texas focus on avoiding federal energy regulation is costing them the ability to sell one of their strong suits into a broader market.
There were plenty of issues with the electrical system, but the Texas Nat Gas infrastructure was also culpable. They had wells that froze up. Wells also often produce water that can freeze in cold conditions and block a well. There are mitigations for this that were often not in place in TX.
They had also failed to submit paperwork indicating their electrically pumping stations were critical infrastructure and should not be shut off as many of them were.
Situation in West Europe is also based in energy politics, a lack of energy security planning, and no impact studies from shutting down nuclear power plants.
There are parallels in my mind in that both are a product of short sighted ideological thinking.
Cheap power raises living standards. How do people die from voluntarily choosing less expensive energy?
Is this not a major project? The article is very lacking in details, so it is hard to tell what it amounts to in terms of impact.
> France will also increase its solar power capacity tenfold by 2050 to more than 100 gigawatts (GW) and target building 50 offshore wind farms with a combined capacity of at least 40 GW.
https://www.reuters.com/business/energy/macron-bets-nuclear-...
So they are adding ~10 GW nuclear (6 * 1.6 GW) and at least 140 GW of renewables. Use any capacity factor you want but the numbers speak for themselves.
The real reason for this is likely continue have an industrial base for their naval submarine reactors by subsidizing a complementary civilian industry.
Interesting, I've never read about that angle. Nuclear is a great complement to Wind/Solar as it provides a steady base load.
Due to the extremely high fixed costs and lower marginal costs of nuclear plants they then have to make the money back in fewer hours, driving cost even higher.
The other issue is the costly steam turbine side. The reason gas won over coal is the efficiency and tiny footprint of gas turbines. Tack on a tiny steam side for the last percent of efficiency and you have a CCGT plant. Coal and nuclear share the same steam side, both have been dead ends since the 80s.
The problem is most renewables fall off before peak load subsides. That's why cheap energy storage would be a huge boon for transient renewables as they could keep providing energy after the sun is down and the wind has subsided.
Take a look here: https://nuclear-power.com/wp-content/uploads/2017/08/Base-Lo...
https://en.wikipedia.org/wiki/Base_load#/media/File:Renewabl...
So, this means that nuclear is crowded out of the market during the sun hours, and later all windy hours. Take a low-ball nuclear cost of ~$130 per MWh. [1] Say that wind + solar can fulfill 12 hours per day, this is a low estimation. Current estimates is that ~80% is easily feasible without storage.
That means the nuclear plant has to make do with the 12 hours left. The nuclear plant has now, based on napkin math, entered a LCOE of $260 per MWh. It was already hilariously uncompetitive at $130 per MWh, now try $260. Now you can do power 2 gas and then burn it or any other extremely inefficient energy storage and still come out ahead.
> While historically large power grids used unvarying power plants to meet the base load, there is no specific technical requirement for this to be so. The base load can equally well be met by the appropriate quantity of intermittent power sources and dispatchable generation.
> Grid operators solicit bids to find the cheapest sources of electricity over short and long term buying periods.
> Nuclear and coal plants have very high fixed costs, high plant load factor but very low marginal costs, though not as low as solar, wind, and hydroelectric. On the other hand, peak load generators, such as natural gas, have low fixed costs, low plant load factor and high marginal costs.
> According to National Grid plc chief executive officer Steve Holliday and others, baseload is "outdated".
https://en.wikipedia.org/wiki/Base_load
[1]: https://www.lazard.com/perspective/levelized-cost-of-energy-...
See the LCOE graphs in this article for the trends: https://ourworldindata.org/cheap-renewables-growth
We need a model that is cheap and safe everywhere, in every country, not just in china and russia.
Also, I wouldn’t put too much faith into Russian numbers for their nuclear projects. They’ve pretty much got the patent on propaganda.
Russia is not needed though, China is very cost effective and their popular model is in fact American based. Their other popular model is a french derivative. Their secret sauce is to build refined second generation models with added safety instead of building 4th generation economic ineptia because of absurdly high safety bloat. The answer to how to make nuclear reactors costs effective is simple: 1) Do not fire all competent and trained nuclear engineers 2) Make nuclear reactors maximally secure, not absurdly secure.
There are many possiblities.
https://en.wikipedia.org/wiki/Energy_storage
Then there is wind power and other sources such as geothermal energy and Bio-gas Plants, which is are independant of day time. And let's not forget the lower energy demand at night, the possibilities for supply based energy consumption, (green) gas imports from somewhere else.
I live near a turbine that runs on gas in the summer, and oil in the winter when demand for gas is high.
I also suspect that prices will rise, encouraging people to turn their thermostats down and limit travel.
Countries only need to export to the extent that they can get imports. Anything beyond that is a waste - and clearly so now that foreign reserves are being frozen and defaulted on.
Russia is keeping the gas on to keep the EU out of the war.
And China uses Yuan, not Euros.
In very international trade the buyer uses the currency they have and the seller gets the currency they want. The finance system is there to make the match.
We don’t trade using pebbles. We trade using promises that are created on demand.
This is Proxy war with US/Nato to get a trade deal in exchange for balancing China with military power (last card they've got). France and Germany were OK with this - cheap resources, you can move pouting factories to Siberia, production would be more competitive than Chinese.
US and rest were not happy about this.
[1] https://www.dw.com/en/european-commission-declares-nuclear-a...
[2] https://time.com/6139049/europe-natural-gas-green-energy
I think you're on the right track but slightly off.
NG is "green" by EU standards and Russia does make it's money from NG sales to the EU. I think the piece you're missing is that Ukraine's current government is more friendly to the EU and Ukraine has massive, untapped NG reserves[1]. I have to think that the EU is eyeing Ukrainian NG in order to cut Russia out of it's economy.
That sounds like something that would take decades..
And a few decades from now the EU plans to be carbon neutral.
(Yes I know kWh is a widely used unit of energy)
Similarly, we don't need power of the transfer of the gas, we need to know how much gas gets exchanged, because it's priced per kWh, so removing h from each side actually makes things harder in another equation.
In fact there is pressure in Switzerland to block the trading of gas since 80% is done here but it would hurt the EU so there is no way this will be done unless the EU decides that they also want to sanction this.
The blocking of Swift also has an exclusion for trading of this gas.
No, just need another cup of coffee.
This is being said a lot these days, but I haven't seen any proof of it. I'm not saying that proofs don't exist nor that it's wrong, just that I've been reading it everywhere, and haven't seen evidence. So I'd be happy if someone reading this could point out to some clues
The east was just a part they could get control over in 2014. But their goal was always the whole country.
By all conventional measures it's impossible for them to hold it. Why would we assume thats what theyre trying to do? It makes no sense.
I think he knows Ukraine is lost. He wants it broken so it becomes a strategic liability for the west rather than a military asset.
Germany is the country with most expensive electricity in Europe, and gas deals from this mafia is a near instant cash.
Now, if I go back to the generation of my grandparents and to some extend even my parents when they were in their childhood, that was unheard of. You would only heat the main living room during cold winters, and the family would gather. For sleeping you wore pyjamas plus socks etc, and you took a tin with hot potatoes to bed. Showering was not a thing, you would wash daily and maybe bathing on Sundays.
Now that annoys me a little about the whole "Germany needs gas from Russia urgently!" narrative. If you cut out gas for heating/boiling (not electricity), not a single german will die this winter, or next winter. We will lose a lot of comfort, and might have to change our habbits, but we do not have siberian grade winters where having no heating means having to freeze to death.
"Why is my gas bill $500? This is outrageous. I have 2,400 sq ft. (232 sq. m.) house and keep it at 70F (21C) at all times, so what?"
· We should put extra dollars not to buy goods from Israel, so fewer Palestinian children die
· We should put extra dollars not to buy goods from the US, so fewer Syrian children die
· We should put extra dollars not to buy goods from the UAE, so fewer Yemeni children die
· ...
I'm afraid I don't have so much money.
When you can get cheap goods from somewhere, then you can buy more. We outsourced and promoted cheap products for the benifit of Wallstreet and busniess at the expense of our future wages and global human rights.
It is good news for USD vs EUR.
Russia cutting off oil doesn't seem to be synonymous with the intent of Morgenthau, it may have a similar side-effect but it's not the same as far as I can see.