Mild autumn weather has sent European gas prices plummeting | Hacker News Reader

Mild autumn weather has sent European gas prices plummeting

economist.com

179 pointsmfiguiere263 comments

"Gas costs €35 per mwh for delivery today, but €110 for a guaranteed shipment in December and €142 for one in February, once heaters turn on."

The market is in contago, if you can find a way to store the gas you can make money buying today and delivering in Dec/Jan/Feb.

You could even take delivery in December if you can find storage and sell in Feb and lock in a spread of $32 today. This is the reason you're seeing so many LNG ships outside the coast of western Europe.

Isn't storage just exactly the problem? From what I understand every single possible storage tank in Europe is filled to the brim, and most if not all of the LNG ships are already there or en-route.

Liz Truss, the short lived prime minister of the UK closed a major gas storage facility when she was energy secretary!

I don't think this is correct. According to the coverage I've read, the facility in question is Rough[1] which closed in 2017. Around that time Truss was "Secretary of State for Justice" and "Secretary of State for Environment, Food and Rural Affairs". In case the latter sounds vaguely energy related, there's a separate cabinet post called "Secretary of State for Business, Energy and Industrial Strategy".

[1] https://en.wikipedia.org/wiki/Rough_(facility)

I got some plastic bags hanging around, who do I ring to get in on this?

I wrote the system for National Grid UK LNG storage and trading in the early 2000s. I think they had 6 sites online now. Milford Haven was in progress I believe. Then they gradually started closing them as not required... Same with coal and nuclear plants! LNG is not so easy to store and there were a lot of safety regulations for site visits.

That's always the problem - most obvious in companies but also visible with governments - anything that is for "once in a lifetime emergencies" gets ignored or downsized eventually because it's hard to explain the reasons for the costs.

That sounds like fun work! How did you get in that position?

I was part of the research organisation which owned all of the British Gas R&D work going back into the 70s and beyond. I also maintained the software for all the high pressure gas metering sites and converted some of the code and calculations from Fortran and Basic into more supportable APIs. There was a lot of early work on GIS mapping for pipeline management as well.

Contango! Great word. For a fun explanation, check out Planet Money’s “Negative Oil”, https://www.npr.org/2020/04/22/842095406/episode-993-negativ... .

I was on hn when that happened last time. I felt like but could not convince someone to "buy" me an oil tanker for negative money, only for a short period but I could boast about "being an owner of an oil tanker once". Sigh. If only someone could help

It was the value of the contracts for delivery at a certain time and place (e.g. the "May 2020 WTI crude" contracts) that went negative, because there was no capacity to accept delivery.

Sure you could have received money by buying the (undeliverable) oil on a tanker, but then you would have been stuck paying the oil tanker lease cost (tens of thousands of USD/day) until capacity to take delivery became available, or until the tanker could be moved elsewhere with capacity.

oh no. making money was not the issue. i am living on the other side of the world so its not like i could take delivery even if i wanted to but the idea was that i could "buy" the contract and sell the same within minutes/hours as the price was in the negative itself.

i would've get a receipt in my name (for whatever brief period that would've been) and i would get to boast about that..... just harmless fun thing

Or you can use a financial instrument futures. I never bought futures, just learned about it in university. But there you agree to a future price, so akin to storing it.

Future is a contract with delivery in the future - exactly what this comment is taking about. The future markets for Dec/Jan/Feb have already priced in the storage problem many months ago, you can't obtain them for today's low price.

If everyone agrees that the price will go up but nobody can buy and store it, the futures price will actually be higher than today's price.

Run the gas through generators and generate Bitcoin with the extra electricity, then spend it on gas futures?

I assume those LNG tankers are just hanging around as "storage" waiting for the winter payoff?

Exactly, you're getting paid to store the gas for future delivery.

Don't discount the fact that many europeans are actively trying to conserve and refuse to heat their house until absolutely necessary. I have 65 yr old friends in amsterdam taking spongebaths because they don't want to support russia

Is that just an anecdote though?

In Switzerland the govt has been running an energy conservation awareness campaign for about 6 weeks now and the stats say it's had zero effect so far.

I think it helps but it's hard to measure as long as the outside temparatures are not comparable to last years. I follow the diagrams for Germany and right now consumers use about 30% less than the average of 2018-2021[1]. I think many people reduce their heating not just to help Ukraine etc. but also because they (we) know that it's way too expensive and we certainly weren't looking for much cost savings before. I thought I did last year (remember: already 2021 there was news that russia was not delivering as much gas as they usually do) but I'm actually on track to use like 50% less than last year. But yeah, thats just anecdata.

[1]https://www.spiegel.de/wirtschaft/erdgas-versorgung-europas-...

Many German newspapers have data visualization on the topic:

Frankfurter Allgemeine:

https://m.faz.net/aktuell/wirtschaft/zahlen-zu-strom-und-gas...

Zeit Online:

https://www.zeit.de/wirtschaft/energiemonitor-deutschland-ga...

It seems clear to me that German are trying to save energy both in private households and in industry. This seem quite reasonable given that gas prices for many end customers are double of last year's prices.

Maybe it has an effect but not the one you expect (it makes people hate Russians)

Electricity usage in the UK is low compared to last year.

Https://grid.iamkate.com

If you look at past year demand it's currently 28.1gw weekly average v 31.6gw last year so that's a roughly 10% drop.

It depends on the country. Last I read here it was down 7%, other places down around 15%... Germany has had legislation since at least Sept. but I'm not sure where to find the results of that. My personal consumption is down 66% for October and I think my neighbor's is yet more. Also note, it's the warmest winter on record in many places in Europe.

Older people I know in Switzerland are definitely taking action, I've seen no action in businesses which use considerably more energy, though there are less businesses overall.

I think the problem may be that (at least in Germany, not sure about Switzerland) we've had awareness campaigns about conserving energy and water for ecological reasons since at least the 1990s. I recall learning in school ca. 2000 to turn off the light when leaving a room, to take short showers instead of using the bathtub, to turn thermostats to 19°C or less, to soap my hands before turning on the faucet and to use the water-saving flush after only peeing. This wasn't related to any particular shortage.

Looking at this chart [1] they're still 6 or 7 times more expensive compared to two years ago and further back, i.e. ~15 EUR/Mwh compared to the present ~100 EUR/Mwh. No energy-intensive industry can sustain a 6 or 7 times price increase of its core input.

[1] https://tradingeconomics.com/commodity/eu-natural-gas

That's going to shut down a lot of aluminium in countries that use petrochemicals to process it. Iceland is going to see its industry boom, as they use geothermal to process aluminium. I'd once heard the argument that Iceland exports energy in the form of aluminium billets. That's becoming more and more apparent now.

It already has, multiple aluminium smelters have suspended operations for the winter. Other companies affected are e.g. bakeries and a food cannery, which will affect prices of basic foodstuffs - which are already up due to various factors, including the Russian invasion. Bird flu is also a thing, causing chicken and egg prices to soar.

"Welcome to Bauxite Island"

These are the month-ahead contracts prices. The day ahead are at around 10% of that (the gas is almost free, compared to what it costed just couple months ago). It's probably just temporary curiosity though.

Gas prices plummeting, energy bills soaring. The market will regulate itself. /s

This is because companies buy long term contracts, which are still priced higher than the spot price on the, IMO reasonable, assumption that gas prices will rise again next year as the war continues (and Russia has more options to escalate e.g. cutting TurkStream).

Why would they cut (I assume you mean turn off, not blow up) Turkstream? Did you see the recent dealings between Russia and Turkey to expand those gas transit routes via that direction?

The market is unable to function normally because of government interference. I expect there is a supplier and a contract somewhere that will give you the spot price. Furthermore the temperature has dropped so I expect demand has increased again so are you really sure you want that contract?

I am ambivalent on the idea of a completely free market.

Because while I believe it would self-regulate, in a vacuum (or anarchic system), a free market paired with a government means interference, nepotism, laws that favour monopolies and kills competition.

So when people like Liz Truss enter 10 Downing Street and claim they want to enact "free market policies", the result is just utter economic upheaval and chaos that hurts regular people further.

Business people and political leaders in the West are almost universally in favor of the free market. Until it turns out that said free market might mean they get the short end of the stick. That is to say less tax revenue or less profit. When that happens they suddenly insist there must be some of government intervention, otherwise they are too big to fail.

Isn't that like saying people are in favour of free speech. Until someone starts inciting violence.

It's still in favour of free speech, just with limits.

The same applies to free markets. If they work as promised great. If not someone needs to step in and fix it.

The problem of unbounded free speech is rectified by setting precedent that yelling "fire" in a crowded theater is obviously a criminal act. At least, it works this way in a common law nation like the US. This doesn't really cost anything, beyond criminal enforcement. The public good in this is obvious.

The rectification of free markets in the US somehow involves massive transfers of wealth to private companies from the public sphere. Essentially just to make sure those companies don't suffer an adverse effects from their bad decisions. I'm not sure what the utility to the public is in this. Do we really need companies that only exist because of government handouts. Why didn't we bail out Enron in that case? What about WorldCom? Or was their mistake just having a Canadian as a CEO?

Monopolies and collusion happen without government regulation, too. I find it best to think of markets as something which are free in the same sense that a helicopter is not currently crashing into the ground.

a free market is a mathematical model, which is a nice way of saying it's an imaginary thing.

Economic upheaval in UK is not because 'free market policies', but because of Liz Truss's irresponsible fiscal policy during inflation times, which shows her (and her chancellor's) basic macroeconomic incompetence.

Sure, I wasn't trying to defend whatever Ms. Truss tried to do in her 40 days. It was terrible on all accounts.

People seem to expect the free market to adapt immediately, for consumers immediate benefit. The market will regulate itself, but it may not happen in timeframes that people are comfortable with.

No, consumers just expect it to show consistent reaction times.

A rumour is typically enough to warrant an overnight price hike in consumer prices. While for experiencing reductions, consumers have to wait for a few months for the market to "adapt". And in the end, it usually is the consumers that adapt to the increased prices, so companies don't see any good reason to reduce them.

That is how the market works?

Look at any stock in any stock market that had a highly positive or negative rumour associated. You will see an immediate spike or dip in value and, a slow regression to the mean.

You missed what they said: the problem is that consumer prices are not symmetric like that: prices spike, and then regress, but they never sharply dip.

What causes you to believe in the premise other than it being repeated a hundred times a day?

I don't understand why people waste electrons making comments that cannot even be right or wrong without specific data and defined terms.

If you pay market rate, then by definition it's symmetric. If you pay a managed rate, subsidized rate, flat rate, etc., then it probably won't be.

Which is the case for electricity and natural gas.

Consumer goods that are usually priced at market rate, such as clothing, regularly see deep discounts.

That's because if a company makes too much profit, it's being potentially inefficient - but if it makes too little profit, it goes out of business.

okay, but that excess profit is consumers' money and workers' time, so of course ordinary people are pissed.

How is a company inefficient if it makes 'too much' profit?

Whom decides what is too much?

> if a company makes too much profit, it's being potentially inefficient

That's the theory. Reality: if a company makes too much profit, it's probably a monopoly or have formed a cartel with their "competitors".

You can - at least in the UK - switch consumer energy suppliers if you feel like your current energy provider is charging too much.

However, the recent crisis sent a large number of consumer energy suppliers into bankruptcy, suggesting that actually they'd been keeping too little back rather than fleecing the consumers.

It makes sense to me that this should be the case, without any conspiracy, because physical things require lead time and inventory.

But have you looked at a chart that proves this claim that everybody makes and assumes is true?

These oil and gas futures are all publicly traded, as are most of the corporations working in the field. If it’s really so easy to make money because the market is rigged, guess what? You can get in on the action too.

Everybody complains that energy companies manipulate prices to enrich themselves. For some reason though none of them are happy that they can use their inside knowledge to get rich...

Yep, I have friends who think the price at the pump is due to companies like Exxon and their "ability to price gouge". Like what? Yea dude Exxon is so powerful they let their stock freefall for 6 straight years post-2014

Your friend is right. They literally have record-breaking income right now[1]. It just headlined the FT two days ago. This is also happening with distributors/utilities.

1. https://www.ft.com/content/0d84255c-84ba-4462-b80a-859335285...

That doesn't mean they are right. This is a complex topic that I don't have time to write a thesis on at the moment. Some things to consider: cost cutting 2014-2019 enabled much higher profits when demand went through the roof, alternatives and substitutes, how is the price of OIL determined?, spot vs future, refinery capacity, how much of oil -> gasoline is vertically integrated, who oil producers sell to, who buys the oil, who distills it.

So who's doing the price gouging? Oil producers? Distillers? Gas stations? Everyone?

Are prices being gouged, or are there intricacies in this system which have compounding price effects on supply and demand hiccups?

> So who's doing the price gouging? Oil producers? Distillers? Gas stations? Everyone?

Yes, the entire supply chain, at least in my country. It's been news for quite a while.

> Are prices being gouged,

Yes and there's a lot of talk of intervention for that reason, even in the US.

Have you got figures to back up your assertions that the entire supply chain is price gouging?

Or is this purely on the basis that you're experiencing high prices so anyone that passes on those price rises are defacto price gouging?

> Have you got figures to back up your assertions that the entire supply chain is price gouging?

This a false dichotomy. It's been in the news here pretty much constantly, especially in the financial press, to the point it's common knowledge. I'm neither digging up those articles nor translating them for you though. You'll just have to take my word on it (or not.)

So you are not going to substantiate your claim and just say its “common knowledge” and “take my word”? Alright then.

How is it a false dichotomy?

Price gouging would show up on the P&L it's very easy to demonstrate. Citing unnamed newspapers and 'common knowlege' doesn't demonstrate anything, or inspire confidence.

Petrol stations tend not to be very profitable. Not knowing where you are I can't say whether you're the exception. But as petrol is fungible, unless you're accusing them of collusion or something I don't see how they could price gouge.

Same with refineries.

So that just leaves the oil drillers. You have got OPEC and stuff, but the average non opec oil drillers have the choice of selling at the market rate or not at all. And I'm not sure how selling at the market rate, be that for massive profits, or a loss is price gouging. Unless you want to devalue the term.

This is just a Gish Gallop. If you're not going to write a thesis, just find a single thing and explain why record profits there aren't actually gouging.

If powerful forces control prices, why do they go down?

I don't believe in the gouging rhetoric because interested parties benefit from not only high prices, but stable prices, which we haven't seen.

Unstable, skyrocketing prices encourage competition from alternative energy sources, right?

I don't think we have to imagine an alternative to the situation in recent years, but can look to history for context.

If you look at any really long term chart of oil prices, there is a dramatic change in the early 00s, from a regime of fairly stable prices to one where they skyrocket and crash.

I think statisticians have a term for this: heteroscedasticity.

It kind of looks as though energy prices were stabilized deliberately, and then those forces lost control. Maybe it was related to fracking, or the invasion of Iraq. Or maybe it was a reaction to newly perceived fragility of the Saudi monarchy. Or maybe it was because Russia became a bigger player not under the control of OPEC. Or the US, similarly.

There's a Lukoil station near where I live. The price they are charging doesn't differ much from say Exxon/Mobil.

Is that because they are colluding?

Of course they are. It is more profitable to hike prices to match your less-efficient competitors and maintain a facade of competition, rather than crushing them to become a monopoly and risk a heavy-handed government intervention.

What have Exxon and other oil companies profits looked like this year? Have they been hurting or making record profits?

It takes money to make more money (especially in any appreciable amount) and that is not possible for everyone so the "You can get in on it too" argumentation is quite insulting to a lot of people as far as I am concerned.

The argument is that it is obviously never easy to make money in a transparent market - because SOMEONE with money would do it until the prices adapt. The difference between todays spot market and futures tells you something about the challenge to provide additional storage at scale.

> because SOMEONE with money would do it until the prices adapt

But they are. Your premise is wrong. This just headlined the Financial times 2 days ago[1]. This and the last quarter have been record profits for energy companies and that's not even counting local profits, which are also at record heights.

1. https://www.ft.com/content/0d84255c-84ba-4462-b80a-859335285...

Well of course they makes record profits, something they have increased in value (storage, stock, permits...) But they cannot buy more gas now and sell in the future than they already do - as we can see from the prices.

Someone at some point is gonna have to start defining what the hell "record profits" actually means and why it's good for some companies to make "record profits" out of nothing but hype and bad for other companies to make "record profits" because they were smart about holding their previously money-losing gas investments until a more favorable economic condition.

Gas is still trading worldwide at a price far below it's 6:1 energy value relative to oil, so IMO everyone needs to stuff this "record profits" line right back up their ass where they got it in the first place. There's not a gas shortage; gas is still overproduced and dirt cheap. We do however seem to be long on crybabies that can't buy it at 20:1 anymore.

Financially and politically punishing domestic producers in Europe and the West led to this problem in the first place where it's simply not possible to be price competitive with Russia and the Middle East where the labor, environmental and regulatory standards to produce it are weak or ignored. Nobody seems to give one shit about how much "profit" those suppliers make from the sales, consequences be damned, so long as they give the best price.

People seem to forget that the same oil companies that are making record profits were nearly made insolvent by government lockdowns during COVID. Oil and gas prices were rising long before Russia invaded Ukraine. Of course they are going to raise prices, since the government artificially created so much volatility. The sanctions on Russia only made the situation that was already unfolding much worse.

Unfortunately, people complain that the government needs to intervene fix a problem that governments were responsible for creating, while using Russia as a smokescreen for the terrible government policies that got us where we are in the first place.

Why is the premise wrong? Do you not think gas producers are looking to increase production, LNG terminals and shipping?

Sure, let me just get a couple hundred million in capital, I'll be there in a minute.

If people are complaining that something is wrong, the answer isn't "well why don't you take advantage too"

I assure you, there are plenty of people with a few hundred million they are looking to invest who aren't in on the Big Gas conspiracy!

Yet, most of them don't seem to be tripping over themselves to collect this free money. It could be because:

* The market has priced in the cost of storing all this gas between now and February.

* Storage is expensive, and is at capacity.

* Building out new storage that only will be useful for a total of two years (Or however long you expect the war to last) is a poor investment.

* An increase in storage capacity will lower the spread between the spot price of gas in October and the price of gas in February, as suppliers price in the increase/reduction in demand

* Europe transitioning to electric (heat pump, baseboard, etc) heating will lower demand for gas.

There's a reason that difference in spot pricing exists.

This is because there are multiple markets for gas, depending on when and where you want the gas.

The price for gas being delivered today is not the same as the price for gas in January. Because in the meantime, someone needs to store it.

Right — you might remember during the big freeze in Texas (February last year), a lot of people were ridiculed for using Griddy, whose very premise was “hey don’t pay those inflated utility prices, just pay the usually-cheaper spot price for your energy!”

The utility price is higher because the result of longer-term price-locking contracts. The spot price can spike pretty hard, wiping out your gains, as those customers learned then.

(Sorry, I don’t know the standard jargon for some of those concepts.)

"price gouging is when futures contango" ok buddy. there's literally an energy provider here that will more or less give you spot. and guess what, a whole bunch of people got burned doing that. the issue is there's a glut right now, go look at the futures curve going into winter then get back to me.

Mild autumn weather [ and not enough storage capacity to take advantage ] has sent European gas prices plummeting.

90% full in the UK means about a week's worth of gas. In Germany it's about 2.5 months.

Short term not to bad for the UK, you can now sign contracts for delivery in one to two weeks at significantly lower prices.

Although the UK has an appreciable percentage of Europe's LNG re-gasification capacity, while Germany has none, and imports LNG via Belgium and the Netherlands instead. The UK has storage, it's just sitting in ships off the coast.

and a large chunk of UK supply is still domestically produced from the North Sea

And the UK has relatively more secure sources in Norway and the North Sea.

Not sure I would bet on the pipeline from Norway remaining secure. They have increased their level of military alert for a reason.

An attack there is quite high risk, you would have to thread the hybrid warfare needle well to not trigger NATO Article 5.

Russia would be insane (more than they already are) to attack that. It has nothing to do with Ukraine and would likely be considered an attack on a NATO ally.

No benefit and lots to lose.

(Disclaimer up front: I don't know who cut NS1 and NS2, my bet is on russia, but I can see more than one alternative.)

Which would explain the attacks on their own gas pipeline NS1 and NS2:

- they are dumb and reckless enough to do that (they weren't used anyway, +plausible deniability)

- it signals to NATO the idea that russia can destroy critical infrastructure without actually getting caught for an attack on critical infrastructure

The cost of betting wrong when you attack your own infrastructure is measured in rubles.

The cost of being wrong when you attack NATO infrastructure is measured in war, conventional or nuclear.

That's why Russia attacked Ukraine, but only postures and blusters when it comes to NATO.

There are red lines that you can't cross, and open conflict with a nuclear adversary is one of the latter.

"There are red lines that you can't cross, and open conflict with a nuclear adversary is one of the latter."

This is true for NATO powers as well. I can't believe Russia blew it up, it doesn't make sense.

But which NATO Country would blow up pipelines and risk a conflict with a nuclear adversary?

> I can't believe Russia blew it up, it doesn't make sense.

I think lot of what Russia does, doesn’t make sense at the macro scale, only in the context of internal power struggles.

It can make sense if you think about it in the game theory manner. Sometimes, deliberately limiting your options improves your overall outcome.

One theory is that by blowing up the pipeline, Putin is limiting Russia's options. With the pipeline in place, ending the war would immediately cause the flow of gas, and dollars into Russia to resume.

Without the pipeline, ending the war would not cause the flow of gas and dollars.

This might improve his ability to politically maneuver within the country (As other political agents, who care more about money than the war are less incentivized to push for an end to the war.)

It's a similar idea to why the US stations troops around the Korean DMZ. Their job isn't to repel a North Korean invasion, their job is to die in the first few minutes of it, and thus force the US to intervene in any resumed Korean conflict. This very clearly communicates to North Korea how serious the US is about maintaining the status quo. By restricting its freedom of action (Forcing itself to go to war if hostilities resume), the US accomplishes a political objective (preventing hostilities from resuming).

---

Of course, this is all speculation. For all we know[1], the pipeline was blown up by Poland/Ukraine/Germany/the US/the Mossad/Morocco/Aliens.

[1] It's difficult to trust any information about this, as its impossible to impartially verify it, and everyone involved has their own agenda they want to push.

OK, this is at least a theory:

Putin wants to continue the war. He takes away his possibility of selling gas to Western Europe so that he is not tempted to make peace and sell gas. And his fellows can not be tempted as well.

(sounds as crazy as everything else)

Alternative: some group in the FSB or the Russian navy thought it would be impossible to blame it on Russia (for obvious reasons), then went ahead and blew it up to be able to blame it on someone else (UK, US or NATO in general maybe?)

Somewhere along the line something went wrong (for them).

(Not saying they did it, only that think it is the least crazy of the options I have considered.)

It's a kind of nice mystery, at least nobody died (I hope so). There will be novels and movies.

Why would it have been Russia? Obviously we don't know who did, but my thoughts were that Russia would want that pipeline to be available as a bargaining chip to get the rest of Europe to pressure Ukraine to concede. How does blowing it up benefit them?

> How does blowing it up benefit them?

Destroy the european economy by starving and freezing people to death, make everyone in europe turn against ukrainian supporting politicians and cut off any support for the ukraine government.

But they could have done that without blowing it up right? they control the source of the pipeline. So couldn't they have achieved this goal without taking the bargaining chip off the table and limiting their own flexibility?

It allows/invites a challenge from a weaker leader who suggests selling some gas to get some money. If there is no option and no flexibility there is no alternative, no challenger.

Good thought, hadn't really been considering the internal politics angle of it

And that goes for every player. Want to be Germany and not have someone outflank you and say 'lets take the cheap gas from russia' - take the gas off the table. Want to be India and still get half off your energy? Want to be the US and get to sell a ton of gas to europe?

> Why would it have been Russia? Obviously we don't know who did,

Agree. As mentioned above I keep multiple options open.

> but my thoughts were that Russia would want that pipeline to be available as a bargaining chip to get the rest of Europe to pressure Ukraine to concede. How does blowing it up benefit them?

Exactly as I outlined above: if they did it, it is (relatively) cheap power signaling: “think if this happened to one of the cables that are in use. We are actually dumb & crazy enough & technically capable to pull it off”.

Rounded to the nearest meaningful number 0.00 cubic feet of gas was going to flow through those pipes in the foreseeable future.

Blowing them up did everyone, on both sides, a lot of favours by ending the whole will they / wont they charade that was taking place on both sides.

I never understood the Northstream strategy on all sides before the war and I don't understand the reasoning for blowing it up either.

For Russia to blow up its own pipeline takes away their ability to offer gas in exchange for money and political influence regarding the Ukraine conflict. Why should they want to give up this bargaining chip they worked hard for the last 20 years?

The only reason I can think of is that they believe there is no way for European to buy any gas anyway. Yet, this is in contrast to the European narrative to become independent of Russian energy over the next years but still continue to buy this energy now even if blood is sticking to it.

Thus Russia was either thinking that they don't need the money/foreign reserves anyway or that there goal of destabilizing Europe with high energy prices can't be achieved unless they turn off gas supplies entirely.

But even her the mere existence of the pipeline might have benefitted Russia because it did allow appeasers in Europe to argue for 'negotiations' with Russia. Since the pipelines were blown up, these appeasers have gotten really quite (at least in Germany) because it is clear that there is no way back with Russia.

Internally inside Russia it might be useful to portray Russia under Western attack but seems to me also projecting weakness.

In summary I don't consider it very plausible that Russia would blow up such a strategic asset.

Looking from the European perspective it also makes very little sense. Yes, everyone except the Germans hated that pipeline but the basic idea to have a pipeline directly to Russia as a carrot & stick worth 20 bn EUR of money transfer per month seems as plausible as ever.

And would any European country risk being found out to execute a bombing of infrastructure that is part of the German sphere of influence? For instance Poland? Kind of inconceivable. The US? Hard to fathom.

Which leaves only two possibilities: It was an operation by Ukraine to simplify European politics or Putin got so mad about the continuous failure that he acted irrationally once again.

Really though 3D chess it seems.

Both sides are holding it as a bargaining chip while simultaneously having it held over them as a bargaining chip. Neither side now wants to transact on the pipeline as it will ultimately be a sign of weakness. Either Europe blinks because it is desperate for gas or Russia blinks because it is desperate for money - and neither side is going to blink.

All the while Europe hasnt found it that hard to find other sources of gas and Russia hasnt found it too hard to find buyers willing to get a discount.

I guess it could have been a quid pro quo for some kind of support from China. It makes a switch to the east more explicit.

Unlike oil, LNG boils off while sitting off the coast, so this is not a long term strategy.

Arguably it's a better long term strategy - the rest of Europe doesn't really have a way to refill their storage once it's been emptied over winter.

I'm not talking about sitting tankers off the coast, I'm talking about the UK's ability to continually attract new LNG tankers thanks to major existing infrastructure, and being able to afford it. The UK is setup to be able to keep a just-in-time LNG delivery system in place; Germany is not.

At what rate? 1% per day/week? If it takes N weeks to criss cross the Atlantic to refill from the US, maybe it is worthwhile to lose X% off the top to sell when possible.

I have no doubt the energy companies have teams of analysts crunching the numbers on a daily basis.

In UK it is completely self inflicted, because they got rid of gas storage infrastructure in 2017

https://www.theguardian.com/business/2017/jun/20/uk-gas-stor...

This has reopened (25%) and is excluded from the economist's figures. In fact some research [1] shows that approximately 93 days of supply will be stored in the Rough gas facility at 25% (28Bcf {capacity}/313Mcf {daily}). This is inadequate (of course) and has probably not been filled yet, but should be helpful to the UK if it can be properly commissioned.

[1] https://www.costadvice.co.uk/latest-news/will-the-reopening-...

And yet when the news did the rounds about Rough recently, they kept mentioning a 50% figure. For example: "Centrica has officially reopened the Rough gas storage facility, increasing the UK's storage capacity by 50%."

When I saw this, I was thinking an increase of 50% on a week's worth of storage?

It looks like some of the figures in the article I cited may be very wrong.

Wikipedia says that Rough has 3.3bn cubic meters of storage, so 30Bcf total and says that equated to 9 days of supply. Looking at various other sources there seems to be a lot of confusion about what the consumption and storage figure are.

50% of 9 days is sorta like a week I guess... so that would add up.

I think that there is a lot of confusion because of the difference between peak winter demand and normal daily demand. If one is boosting the capability I guess you would quote in terms of normal daily demand. If one was trying to show that it's pointless keeping it open then maybe you would do it in terms of peak demand.

Well it made sense at the time, as it was May.

> Before Russia invaded Ukraine, it provided close to 40% of Europe’s gas.

I’ve never understood why people say things like this when referring to the operations started in 2022. Wasn’t what they did in Crimea in 2014 an invasion?

You are perfectly right.

And yet the swiftness of that move made that a fait accompli pretty quickly so people forget that.

A better line would be "before the 2022 invasion ..."

It's probably what the Russian government expected this time around as well -- if they had taken Ukraine in less than a week (as they apparently expected to), the negative European reaction probably wouldn't have happened, same as in 2014.

Yes, but Europe chose to ignore the 2014 invasion to keep the cheap fossil fuels running and to prevent any major escalation with a nuclear power over a mere peninsula. The hope also was 'Handel durch Wandel' - 'Change through trade'.

I can only speak for Germany, but the political discussions about Crimea and Eastern Ukraine did exist for years. However, the government and opposition parties were somewhat in Russias pockets - at the very least their election was dependend on many jobs in industries across different federal states which required cheap Russian gas. Also, the German East is still fairly connected to Russia on a cultural level and this is where you would find most German opponents against NATO these days. Communities directly affected include Lubmin in Mecklenburg-Vorpommern where Nord Stream 2 is landing as well as Schwedt/Oder with the decades old PCK oil refinery that is specialized to process Russian oil (not all oil is the same) and supplied most of the German North East with fuel.

Russia has certainly funded a lot of online trolling, political actors (AfD) and disinformation to achieve their goals. For example, they tried to actively prevent Germans from switching to American LNG / fracking gas. German Angst [1] is a pretty fertile ground for disinformation. It's also what drives opposition against nuclear power, more so than the more reasonable arguments regarding economics and prices.

Regarding gas, it's mostly about heat generation for industry and NOT electricity where it is a minor player [2]. Natural gas is mostly used for manufacturing and to a lesser scale for quick up/down scaling of electricity generation as support to the baseline.

[1] https://www.dw.com/en/germans-and-why-they-worry-about-germa...

[2] https://app.electricitymaps.com/zone/DE

When did WWII start? It depends on where you lived.

In 2014 they had a fig leaf of not using uniformed Russian military. It was a transparent fig leaf, but we all need our fictions to get through the day.

Yeah Crimea invasion was basically Sudetenland.

Nobody really thought Putin would become completely unhinged.

Nobody thought Kiev would last past the first 48 hours, least of all Putin.

I didn't believe it at first. I didn't even believe it about 1 week later.

Yet I definitely expected the follow up to be crap for Russia when Zelensky said he's not leaving Kiev and he needs ammo, not a ride.

Could you elaborate your analogy?

Crimea - Sudetenland (Munich Agreement 1938)

Ukraine 2022 - Poland 1939

The Russian annexation of Crimea had at least some ambiguity. Yes, it was illegal, but Crimea used to belong to Russia, it had majority Russian-speakers, and there was no violence on any significant scale during takeover. The question was, if they are taking over your territory, why don't you fight back? The answer is obviously complicated (and for the record I fully support Ukraine, and I think Crimea and all other occupied territories must be returned to Ukraine). Russia has succeeded, to some extent, making it a "one-of" issue. Now, of course, they've completely destroyed their previous position, it turns out Crimea is not special, they basically try to annex any territory they have any sort of control over.

Yeah, the Crimea annexation was dodgy as hell but as you say more ambiguous. The population had enough imported Russians (and "exported" Tartars) that they could run bullshit referenda and claim the people wanted annexation.

The reason the 2022 invasion (compared to Crimea) got the backlash it did from most of the world is that it was so unambiguously clear cut and telegraphed in advance despite Russia's denials they would invade. Russia left no room for its usual grey area bullshit to work for them. It seemed about as unambiguous as Poland in 1939 vs eg the murkier annexation of Austria in 1938.

> it was so unambiguously clear cut and telegraphed in advance despite Russia's denials they would invade

This is selective memory, I think. Most of Europe and Ukraine itself was pooh-poohing the idea of an invasion despite UK and US intelligence loudly insisting it was going to happen.

Not sure what you thought I meant or was selectively remembering, your statement doesn't contradict mine and is just how I remember it too (US and UK playing up vs Europe and Ukraine playing down). Unless you were claiming the Russian denials didn't happen?

I still haven't turned on my gas central heating yet once in London. This week is set to peak at 16/17 degrees too which is pretty warm for me.

The pictorial had me for a minute. Deeper red means closer to full which is a positive thing.

Could also be a bad thing; if a country's storage capacity is woeful (like the UK), it indicates we could be storing more.

20/20 hindsight. In a less miserable timeline, the absence of hostilities with Russia makes gas storage a non-issue, and any government putting money into gas tanks rather than renewable energy would have been (rightly) lambasted. I'm willing to tear chunks out of our inept leaders over many things, but this isn't one of them.

My friend… Russia invaded Ukraine in 2014. Two different US presidents warned Europe about Russian energy dependency, publicly. Who knows how many times this was brought up in private conversations.

This was so easy to predict that even Donald Trump managed to put two and two together and make four. He brought it up, publicly, and German leaders literally laughed at his face.

European politicians deserve no benefit of the doubt here after 2014. They were told this was a huge risk and chose to do nothing.

Meh; I take your point, but in 2017 there was definitely more emphasis on risks from climate than from Russia. Not saying that was a valid position, just that it isn't too surprising that politicians don't eagerly swim against the tide being set by the media and general public. The root of the problem is that those journalists and voters aren't capable of holding enough complexity in their minds to acknowledge both risks at the same time.

Germany lost momentum in transitioning to renewable energy when Merkel/CDU gained power in 2005.

Cheap gas was nice for people and politicians back then, in 2014 and would be nice now.

I do/did not support joining the war against Russia but reducing fossil fuel usage is the right thing anyway.

The UK had relatively little dependence on russian gas though.

So you'd have to basically predict what did happen. Russia turning off the taps to the whole of Europe / Europe refusing to buy, and Europe scrambling to find alternative sources.

I don't think any of that was reasonably foreseeable.

Germany gets a lot of flak for buying Russian gas cheaply the last 30 years in ever increasing volumes. But it seems strange to argue that Germany just should have bought gas from Qatar or the US for double the price from the start.

How should Germany have done that? Import tax on Russian gas? Laws preventing importing cheap gas from the east? Sounds a bit aggressive towards our big neighbor to the east.

Germans maybe were naive to think (up to until this summer) that Russia would need the money as much as we needed the gas. Still from the grand scheme of things (fossil fuels need to end anyway, gas is better than coal for climate, trade is better than no trade) the idea to partner with Russia made a lot of sense.

Europe benefitted from cheap gas over the last decades and it will be somewhat affected by higher prices for this and next year, but it will accelerate the transition to renewables and strengthen nuclear in those countries in Europe where it is still an option. In the end it will push Europe in the right direction.

>But it seems strange to argue that Germany just should have bought gas from Qatar or the US for double the price from the start.

That was never on the table. The US doesn’t even have the export capacity to manage it.

Germany should have pursued energy independence for the the European Union. It’s as simple as that.

Whenever the Germany was critiqued on its Russian gas dependence by the US it was always brought up that Germany could rely more on US gas (from fracking if I recall).

> Germany should have pursued energy independence for the European Union. It’s as simple as that.

Nothing simple about that. Germany financed the first solar boom under the Green party before 2005 which cost German consumers a pretty penny (EEG Umlage). When Merkel got into power this renewables surcharge got so high that it was threatening consumers and industry. Merkel put on the brakes for renewables (which cost Germany pretty much all solar industry) and ushered in the Gas dependence.

Only with expensive fossils do renewables have a chance in Europe. So the current prices do have at least one advantage and might eventually lead to the energy independence.

Not hindsight, reducing our storage capacity is something that was decried as it was happening. Anyone with sense saw this problem coming (not specifically a Russian war, just potential problems from a lack of gas storage). I personally have been complaining about it for years.

No it hasn't I'm still paying quadruple compared to last year.

Sixty euro for 19m3. Do the math.

Thank god this country is rich enough to write a 22 billion cheque I have no idea how the less fortunate countries will pull through.

On some Gas thread, someone posted a link where you could see full %, ingress and egress graphs of gas storages over time across europe. I can't find it. Could someone post it please? Thanks in advance.

Do you mean this one:

https://agsi.gie.eu/

This is it! Thank you.

Ukraine seems to be the odd one out, this is not a surprise of course, but it could at least be good, they have the opportunity to buy the gas at the bargain rates.

Ukraine's reserves are probably that way because there's no way to get the gas there, no matter what the price is.

What do you mean? Ukraine produces a lot of gas and also receives gas from the EU via the eastern flow of the Yamal pipeline:

https://en.wikipedia.org/wiki/Natural_gas_in_Ukraine

A lot of the replacement for Russian gas has been LNG imports. Ukraine doesn't have an LNG port as far as I'm aware, and if they did, I doubt it would be easy to get a ship safely there at the moment.

Unfortunately, that does not translate to lower customer-end prices.

Which makes sense given that gas storages have been filled almost to full capacity over the past weeks/months for prices much higher than they are now.

Which would be a good argument if back in the day, when gas storages were filled cheaply in summer, that price would be given over to end customers in winter as well. But of course, that was not the way things went.

Simple reason for that: gas storage facilities are nearly full all over Europe, and because of the warm weather and general frugality they aren't emptied. If you can burn gas right now, and you can use enough of it to to be able to buy on the spot market, you could have a field day. Could, because even if all the above applies, there might be long-term hedging contracts in place that have been signed already limiting your flexibility.

I'm on a time of use electricity tariff, and last night it was around £0.02/kWh between 3AM-5AM. The standard price cap rate is £0.34/kWh

One major theme in the ongoing US-Russia conflict over the past decade-plus (dating back to at least 2008) is a fight over who gets to sell oil and gas to Europe. With the destruction of the Nordstream pipelines, and with countries like Qatar refusing to alter long-term energy contracts to increase supplies to Europe, and with Iran still under the Trump-era sanctions (which Biden continued), that mostly leaves the USA as the primary supplier. See this from past summer:

https://www.reuters.com/business/energy/us-lng-exports-europ...

> "...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 [billion cubic meters]."

> "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."

This also results in U.S. electricity ratepayers having much larger bills, driving across-the-board inflation - but fossil fuel shareholders and executives are certainly raking in the profits. Mission accomplished?

https://energynews.us/2022/10/12/natural-gas-prices-are-risi...

  > With the destruction of the Nordstream pipelines ... that mostly leaves
  > the USA as the primary supplier.

Does that suggest motive for the destruction? Who else has both motive and means?

Selling more gas to Europe isn’t a massive windfall to USA. The Biden administration has bigger fish to fry and wouldn’t risk such an intervention in Swedish waters just as Sweden is joining NATO.

My money is on Russian hardliner factions operating rogue without Putin’s approval. He can’t admit he doesn’t know who did it. The Russian state security apparatus is so large, we have no idea what kind of internal tensions exist. Putin may have unleashed something he doesn’t control anymore.

>The Biden administration has bigger fish to fry and wouldn’t risk such an intervention in Swedish waters just as Sweden is joining NATO.

This is a pretty naive perspective - Since when has Sweden ever stood up to the crimes and misdeeds of the USA? Sweden ranks up there with Australia in the "lackey-state underdog to the USA" rankings ..

It's just not worth the Americans' time to be plotting such a thing now. Selling more natural gas is irrelevant to the Biden administration's survival. And there were general elections in both Sweden and Denmark within the past two months — terrible timing for such an offensive CIA operation in NATO waters because any information leak would have handed a potent electoral weapon to anti-American opposition parties.

The Russians are already a very active presence in the Baltic Sea, and this attack fits with their general pattern of confusion and misdirection.

There is no evidence that the Russians were anywhere near the pipeline around the time it was destroyed.

There is massive evidence that the US and its allies were operating in those waters, and up to something, leading up to the day of the attack.

The idea that the US wouldn't jeapordize its relationship with the Baltic states in order to cut off a vital supply of economic resources to Europe is very, very naive. The US has done far worse to its so-called allies.

My money is on Putin doing it, to dissuade any would be throne-pretenders in case of a coup. Any new government has fewer funding options, which would be good to negotiate with Europe, and to pay cooperating oligarchs.

It would be cutting the nose to spite the face, except Putin is cutting Russia's nose, not his own. What matters is staying in power, not the good of the nation.

I agree. Scorched earth policy. Putin for whatever reason is going all in on Ukraine. Even if the war ended tomorrow it would take Russia decades to rebuild it's army.

To rebuild to its previous apparent capability or to its actual capabilities?

If Russia is given the means, it may take only a few years to rebuild to its actual capabilities of 2021. Which is bad enough to cause trouble.

The means is an interesting question. Having done a little scuba diving, the depth of the pipelines (70-90 meters) put it out of range of any diver without a sophisticated mix of gases (Trimix diving). A remotely operated vehicle would also work. The pipelines were made of thick steel wrapped with concrete, so some kind of high-tech explosive was necessary, perhaps shaped charges (used in the oil industry for blowing holes in pipe casing to increase oil flow, for example).

https://en.wikipedia.org/wiki/Submarine_pipeline

https://en.wikipedia.org/wiki/Trimix_(breathing_gas)

See the EPA for details. I guess it's okay to link to this, it's an official US government site.

https://www.epa.gov/sites/default/files/documents/casingperf...

Perhaps locating both of the pipelines deep under the water would be difficult? Point being, the ability to do this might not be as exclusive to nation-states as it has been portrayed (note the ease with which the videographer found the pipelines with an ROV, although the big bubbles probably helped). So, who knows?

As far as who benefited, well, Russia certainly seems to want to continue selling gas to Europe, and is pushing for repair of the pipelines. The USA wants to replace Russian gas with American LNG. Coming up with a reason for Russia to do it would require some mental gymnastics, I think.

https://www.aljazeera.com/news/2022/10/12/putin-offers-to-bo...

Not really. If Russia wanted to continue to sell gas to Europe it could end the war against Ukraine (or have never started it in the first place). Gas sales aren’t a high priority there. Putin doesn’t care one bit about those, and likely had the pipeline blown up as a “no way back” for those who might have wanted to negotiate behind his back.

The US blowing up NS2 for a few billion dollars worth of gas sales is beyond stupid because it risks completely ruining all of the momentum the US has in isolating Russia and having its military completely implode. If your view is that the Russians are the enemy (as the US view is) why would you stop them from making a terrible mistake or put any of that at risk? You wouldn’t.

Ukraine recently discovered it had large reserves of natural gas. Enough that it could potentially threaten Russia as Europe's main supplier. Many people suspect this was the primary reason Russia invaded.

> Many people suspect this was the primary reason Russia invaded.

Regional energy control was possibly a factor but securing a defensible border was the over-arching goal of Russia’s last few wars in the region and Ukraine is no exception. Ukraine has the Carpathian Mountains, and allows access to Poland and Moldova to secure the Polish and Bessarabian gaps.

Securing the borders from what? If he was worried about NATO he would be beefing up troop deployments along the borders of Lithuania, Latvia, and Estonia where he has withdrawn troops and he wouldn't have his military completely bogged down in Ukraine. Why would Russia need to secure borders anyway? Who is going to invade on foot? They have nuclear weapons and would have a justifiable reason in using them if they were wantonly invaded.

It seems so many want to run away from the straightforward situation which is that Putin wanted to take Ukraine or decapitate its government and make it more like Belarus, and he thought that he would be able to do it. Everything else is a sideshow at best, and Russian propaganda at worst.

> Securing the borders from what?

Russia has been invaded by land countless times over the centuries as it has few natural barriers. Securing good natural borders has been a major national security concern for Russia for centuries and up until the fall of Soviet Union they had secured all of them. They have been winning those back gradually over the last couple of decades.

> If he was worried about NATO he would be beefing up troop deployments along the borders of Lithuania, Latvia, and Estonia where he has withdrawn troops

The Baltic states are likely future targets. Thankfully they've been doing so badly in Ukraine they are being forced to withdraw forces from other areas and debasing their ability to achieve those future aims.

> They have nuclear weapons and would have a justifiable reason in using them if they were wantonly invaded

Firstly, there are numerous scenarios where Russia is not wantonly invaded but perhaps different powers use salami tactics either directly or by proxy that wouldn't justify nukes at any particular point. Secondly, Russia may not want to rely on its ability to maintain nuclear weapons long-term especially while its industrial base decays, the result of its crumbling education system unravels, and its demographics rapidly decline. Regardless, it's much better strategically to have good defensive geography and nukes.

> It seems so many want to run away from the straightforward situation...Everything else is a sideshow at best, and Russian propaganda at worst.

The idea that Russia wants a secure border geography and that Ukraine is a barrier to that is not new nor controversial. The (continued) invasion of Ukraine was long expected and the high level reasons long known.[1][2]

1. https://www.theatlantic.com/international/archive/2015/10/ru... 2. https://zeihan.com/russias-twilight-war/

> Russia has been invaded by land countless times over the centuries as it has few natural barriers.

Russia has nuclear weapons. They can say that they are worried about being invaded but I certainly reject that as an argument worth consideration.

> The Baltic states are likely future targets. Thankfully they've been doing so badly in Ukraine they are being forced to withdraw forces from other areas and debasing their ability to achieve those future aims.

Agreed and I think initially (I certainly posted) he intended to break NATO by testing the resolve of the alliance in the Baltics, where had he actually had success in Ukraine would have invaded the Baltics and likely took them quickly as well which would have left the US and NATO allies in the position of continuing a war and reconquering land. I think what he miscalculated was that the US was quite serious about protecting the Baltic states and would have for sure gone to war with Russia directly over them.

> The idea that Russia wants a secure border geography and that Ukraine is a barrier to that is not new nor controversial.

It is in the sense that there was ever any desire to "be secure" as that is a new talking point designed to cause uncertainty in what is desired. It's mostly just about claiming territory perceived to be historically lost and other elements such as this are part of an ongoing propaganda campaign. Putin himself tells you this over and over again in his speeches. Ideas like NATO on the doorstep are recent propaganda tools because NATO has "been on the doorstep" for awhile. It also seeks to remove agency from nations in forming their own security partnerships.

> Russia has nuclear weapons.

Nukes aren’t the trump cards you seem to think they are. In fact I would go so far as to say that nukes are essentially useless outside of deterring being destroyed by nukes or otherwise imminently existentially threatened. Even then they’re no guarantee as no one knows if MAD would actually be triggered in the event of a devastating attack. Regardless, salami tactics and other less-than-total-defeat strategies are likely to be quite effective at avoiding anything too grave to provoke a nuclear response because they can be conducted in such a way that suicide by MAD remains irrational.

> NATO has "been on the doorstep" for awhile

Not very long by European standards. It is obviously an ongoing concern for Russia having an enemy military alliance next door and that is also not a controversial statement. What country wouldn’t be gravely concerned by that? However, this is a long term strategy regardless of NATO and they have been executing it systematically for decades by gradually capturing the defensive geographies around Russia. They see it as existentially necessary to do this and that’s why they have to be stopped in Ukraine.

> Nukes aren’t the trump cards you seem to think they are.

The idea that NATO would invade Russia on its face is ridiculous, as you know, especially considering it’s a defensive arrangement. The idea that nuclear weapons don’t protect Russia from such an attack is also ridiculous, as you know.

But if you believe that they do not protect Russia, it doesn’t follow to then antagonize a far superior military force and risk invasion and destruction.

> Not very long by European standards.

Not a relevant point

> It is obviously an ongoing concern for Russia having an enemy military alliance next door and that is also not a controversial statement.

It’s an ongoing self-inflicted concern, to be certain. But you can choose two options: countries can decide their own security arrangements, or might makes right. If you remove agency from Ukraine you simply give license to other countries such as China or the United States to act as they see fit.

> However, this is a long term strategy regardless of NATO and they have been executing it systematically for decades by gradually capturing the defensive geographies around Russia. They see it as existentially necessary to do this and that’s why they have to be stopped in Ukraine.

If this is what you and/or Russians believe then the United States should immediately go to war with Russia, especially since nuclear weapons aren’t trump cards and they should invade before Russia secures these natural borders you speak of since the two nations are adversaries and there is no reconciliation. Although I’m still wondering what the point would be.

> One major theme in the ongoing US-Russia conflict over the past decade-plus (dating back to at least 2008) is a fight over who gets to sell oil and gas to Europe.

No, it wasn't. America wasn't pushing to sell to Europe, and Europe was becoming more and more reliant on Russian and Asian gas. The shift to American gas (and every other country they can get it from) happened after Russia invaded Ukraine and then shut off the taps when Europe instituted sanctions.

Iranian sanctions were mostly inertial, but have now turned out to be good considering that Iran is negotiating nuclear tech in exchange for shipping weapons to Russia.

My view is that the split with Putin really started in late 2003, when Putin rejected an Exxon offer to take a controlling stake in Russian oil via the purchase of Yukos, and then jailed Khodorkosky (who was close to various USA interests) on tax evasion charges. Prior to that, Putin got a lot of favorable mention in the US press, he visited GW Bush in Texas, was an ally in the 'war on Terror' etc. If Putin had taken the offer, Russia would have become more like Saudi Arabia - i.e. part of the petrodollar recycling system. Putin's domestic popularity in Russia since then is largely due to the fact he redirected oil money to domestic economic growth and military reconstruction, rather than to Wall Street funds.

Everything since then has been one pipeline war after another, from the perspective of energy deals at least. Georgia 2008, for example, was "not a pipeline war!" according to the Guardian (meaning a lot of people were saying it was, and they were pushing back). Note how the 2006 BTC pipeline route (Baku-Azerbaijan-Turkey) was chosen to bypass Russia?

https://www.theguardian.com/world/2008/aug/11/georgia.russia...

After that, there were the two competing pipeline deals in Syria, c. 2009-2010. One was a Russia-Iran deal, one was a Qatar-Saudi-USA deal. In 2010, Assad took the Russia-Iran offer, and in 2011, Obama's government OKed a CIA destabilization-and-regime change program in Syria. If Syria had taken the other offer, I doubt that would have happened. This Ukraine war is just more of the same (plus, a new Cold War is good for military procurement budgets).

Of course, energy geopolitics isn't the only issue, but anyone who has read Steve Coll's "Private Empire: ExxonMobil and American Power", or Daniel Yergin's "The Prize: The Epic Quest for Oil, Money, and Power" will recognize it's often the central reason for international conflicts.

As far as the clearly reprehensible human rights record of Putin being the reason for the conflict, that's laughable - just look at Mohammed bin "Bone Saw" Salman in Saudi Arabia, or the Yemen war. Now if MBS pulled out of Wall Street and ended the Saudi roll in petrodollar recycling, then we'd be hearing about the need for regime change. And if Putin and Assad had signed up for the petrodollar program, they'd be lauded as democratic reformers, and the Ukraine invasion would portrayed in the US media as a necessary action to dismantle neo-Nazi militias (see Yemen, again).

There are many things that can lead to international conflict and war: Energy, influence, territory, etc.

The Ukraine war is primarily territorial at any cost, as can be seen by Russia's willingness to lose Europe as a trading partner (including the now uselessness of most of its pipeline network since it was primarily directed to Europe), as well as almost all of Russia's complete surprise (including top government elites and the army brass) at the invasion in the first place. Belligerence from resource grievances fester for decades, and are telegraphed well in advance since pretty much the entire government will be on board before they start. It's also fairly obvious with Putin's continued nationalist rhetoric about reuniting "little Russia", and his continued rhetorical grievances with the West for over a decade. This is an obsession, planned in a way that nails everyone's colors to the mast. The causes for this war are primarily ideological (rebuilding Russia into its fabled great empire), not economic or strategic (although those do play minor roles, as always).

Putin canned the one defense minister (Serdyukov) who was trying to do something about reconstruction

> My view is that the split with Putin really started in late 2003

It started with (or maybe earlier than, but crystallized with) the NATO-Yugoslav war in 1999 (and this was widely and fairly specifically noted at the time.) Certain factions of the American political establishment may have been in denial about that rift until 2003, though.

I was curious about exact numbers and found this in the most recent EU report:

https://imgur.com/a/HIkyO05

LNG was never going to be competitive with pipeline gas, no one was in some "fight" over US or Russia selling to EU. But there sure is a long, long history of Russia using its gas supplies to blackmail and manipulate ex-USSR and other states, including using it's old puppet governments in Ukraine to literally disarm it.

Their coercion extended to bombing pipelines, too, of course:

https://en.wikipedia.org/wiki/2006_Russia%E2%80%93Georgia_en...

Finally, the price of LNG is so high as to be thoroughly uninteresting for bulk uses like heating. That means it is rapidly being displaced by other methods like heat pumps. The future isn't "LNG from the US", it's "no gas" and current events have very much turbocharged that transformation.

The US (in 2021) used 827 billion cubic meters of natural gas per year and produced 934. The amount it's expected to send to Europe (45 billion cubic meters) amounts to under 5% of its own production which has been increasing every year. Most of that hasn't even been sent yet so the percentage up to now is even smaller.

So yeah this was never about the US selling natural gas to Europe.

You have to add on the 34 bcms to the 45 bcms for a total of 79 billion cubic meters expected to be exported to Europe in 2022. Prices in Europe for gas seem to be about 10X higher than in the USA. Costs of LNG export are also higher, but I imagine the profit return on those European sales is about as large as their total profit on all domestic USA sales (and note domestic prices have doubled as well).

This is pretty basic supply and demand stuff. It's hard not to conclude that a major US goal was cutting Europe off from Russian gas, and replacing that with American LNG. You can find all sorts of quotes to this effect from the US government before 2022:

> (March 2021) "‘President Biden has been very clear, he believes the pipeline is a bad idea, bad for Europe, bad for the United States,’ Blinken says in Brussels"

https://www.marketwatch.com/story/secretary-of-state-blinken...

So, if Europe's not going to get gas from Russia, who does that leave? Perhaps the glut of fracked American gas, provided in LNG tankers, instead?

https://www.nytimes.com/2019/12/11/business/energy-environme...

(Sep 2021) "Natural Gas Boom Fizzles as a U.S. Glut Sinks Profits: Chevron’s multibillion-dollar write-down of gas assets is the most recent sign that the gas supply has far outstripped demand."

These dots are not that hard to connect.

>You have to add on the 34 bcms to the 45 bcms for a total of 79 billion cubic meters expected to be exported to Europe in 2022.

The 34 was already being exported so it's sort of disingenuous to add it in terms of supply/demand impact.

>Costs of LNG export are also higher, but I imagine the profit return on those European sales is about as large as their total profit on all domestic USA sales (and note domestic prices have doubled as well).

Now you're making assumptions.

>So, if Europe's not going to get gas from Russia, who does that leave?

Transitioning to clean energy, nuclear, etc.

>These dots are not that hard to connect.

Thank you for finally not beating around the bush on what your actual point and angle are.

Well, the amount the US is expected to send to Europe in 2022 is at least 79 billion cubic meters. The price differential relative to selling that gas in the US @ ~$4 per mmBTU (pre-inflation 2021) vs in Europe @ $34 per mmBTU (post-inflation 2022), where 1 bcm = ~36 million mmBTU is what?

I get an addition $85 billion in gross revenue relative to selling that gas domestically (where there was a supply glut). Even if you just add on the excess shipped to Europe relative to 2021, that's at least an additional $40 billion.

Add on the ~doubling of domestic gas prices from 2021 to 2022 which is for that 827 bcm used domestically, hmm... roughly another additional $60 billion in revenue.

So, the Ukraine war has brought a windfall revenue gain to US gas producers on the order of $100 billion for 2022, right?

As far as agenda, mostly I'm interested in accurate information.

> This is pretty basic supply and demand stuff. It's hard not to conclude that a major US goal was cutting Europe off from Russian gas, and replacing that with American LNG. You can find all sorts of quotes to this effect from the US government before 2022:

It’s actually very easy to conclude that this is not the case because selling a few billion dollars worth of oil simply isn’t worth global destabilization. To the extent that this was some sort of “goal” of the US (under the Trump admin I’m guessing?) it’s a minor goal at best.

The reason Biden for example said that the pipeline was a bad idea was because Europe was placing its energy security in the hands of Russia, which as we saw turned out to be a bad idea. Note previous Russian aggression in Crimea in 2014, etc.

Similarly to “NATO expansion” being a dog whistle to anti-American sentiment the “the US wants to sell gas” is another attempt to distract from much more plain and serious truths such as Putin simply thought he’d be able to take over Ukraine and wanted to do so.

It's more like an extra $100 billion in revenue. Not counting the military procurement bill, which is what, approaching $20 billion? This war is a real cash cow for certain sectors of the US government (fossil fuels and defense contractors), although the resulting inflation isn't doing anyone else any favors.

Yea so not a lot of money and not worth the global instability, hence it’s a very poor theory.

A much better one would be something like the US knowing that the Russian military was in very rough shape and that an invasion would lead to the permanent decline of Russia and shore up allies in Europe and elsewhere so they goaded Putin into action by not doing anything after previous actions in places like Crimea.

But that’s also prescribing too much agency to the US government.

"With the destruction of the Nordstream pipelines"

They are not destroyed. There are 4 pipes in total and 1 pipe of NS2 is intact. Most likely Russia destroyed the other pipes to get NS2 working (you want gas? Need to certify NS2 and we won't pay contract penalties, because this is not our fault)

Resources blackmail didn't work, hence nuclear threats and mobilisation.

Source for the downvoters https://www.reuters.com/business/energy/single-line-nord-str...

Is the difference in price between Europe and the US down to shipping costs?

To transport Nat Gas you have to cool it down to -265F thereby reducing its volume 600X to transport economically as a liquid (LNG), then it needs to be safely turned back into a gas at its destination. That is expensive relative to pipeline fed Nat Gas.

> Mission accomplished?

What is the mission?

On the other hand, if we could stop considering only the economic aspect of everything and see that the downside of this is that we are destroying our water reserves that took thousands of years to accumulate...

Well, the economic aspect of things is essential just as physical constrains. You can't wish away certain things like availability of other resources, or people behaving responsibly with no economic incentive.

Talking about water reserves. I actually have my own well that I went through the approval and build process about a decade ago(in EU). I had to declare "maximum consumption per day".

So my point is, there is some (at least theoretical) conservation of groundwater resources. However there is no real way to check factual use for which I don't think there is an acceptable solution.

Wells and groundwater pretty much work only for those living atop the water table. In the Alps we rely on water stored under the form of glaciers for drinking, sanitary and energy generation. The latest megasummer with the freezing point well above 5000mt decimated our storage which took thousands of years to accumulate.

The economic aspect is the social aspect.

It does not have to be black and white, with or against us. People have not frozen to death because of a cold autumn and prices to the roof. Can we talk about that or shall we resort to fatalism?

Can you expand on this or provide sources? At least in my countries the gas storage is now-empty gas fields that used to contain natural gas anyway, I have a hard time seeing how that could contaminate water sources.

The mild weather after a scorching summer is turning the continent into a desert. Without an exceptionally wet and cold winter the European water basins will be toast next year. The italian Pianura Padana has seen one of the worst droughts in centuries.

Up in the Italian Alps too. During July/August there has been water rationing for agriculture, and reservoirs for artificial snow during the winter are now empty.

> Without an exceptionally wet and cold winter the European water basins will be toast next year.

What do you mean by toast? Is there some kind of ratchet effect that ruins the water storage capacity for a very long term?

Surely cold and wet is to some degree contradictory.

Warm air holds more moisture.

I'm surprised I haven't come across conspiracy theories that use this as confirmation that "they" control the weather...

I'll admit it has passed my mind several times. I never said it out loud (until now), but the coincidence that the very year EU loses its main gas supply we get sunny winter without snow at all... I know it's probably a coincidence, but my mind doesn't like coincidences. There's always this "what if" voice inside my head.

The mind boggles

I admit it I am working at a secret European agency with the purpose of climate control. We can only make it warmer right now but there is a commit open that could fix our issues with the overheating. They fired the guy who wrote it for cost saving measures, his LOC over year was a bit low but I bet the junior refactoring some legacy code can do it. His LOCs are of the fucking chart. /s

It's actually the opposite, you have a pattern-seeking brain that likes coincidences. It's why we notice patterns, because some are not coincidences but outright consequences, however indirect they may be!

But there's a lot of coincidences in the world, some being so unlikely and so unfortunate, our mind can refuse to accept that, well.. it can be just a coincidence.

The longest-reigning UK monarch dies at the start of the shortest term PM's tenure ... it's incredibly unlikely, yet it happened. Should there be an explanation behind it? Or maybe it's just a coincidence? You decide.

From a deeply cynical perspective, everything in the world is a coincidence, it's just that some coincidences happen so often that betting on them becomes useful, so we give them a name: "cause-effect relationship".

Well yeah, you could say there's no coincidences, but simply an universe where the cause-effect relationships are so incomprehensibly, mysteriously complex that you are forced to dismiss them as just a coincidence ... but now you have coincidences!

So in conclusion - cause-effect relationships can be modeled as coincidences, and coincidences can be modeled as cause-effect relationships... Making them mathematically equivalent.

This is basically a two sentence restatement of David Hume's view on causality.

We do have a mostly sunny warm autumn, but winter begins in December and runs until March, so let's wait a few months with the verdicts.

the american pacific northwest had a summer that ran into mid-october, so the warmer than usual weather is not just in europe.

I literally know someone who believes global warming is a hoax to cover up the fact that "they" control the weather. That belief is so entrenched that this is more like passive confirmation of an obvious fact than an evidentiary bombshell.

Lets hope climate warming will kick in this winter. Or 30 million refugees from Ukraine will flood Europe...

There might be as many people from Pakistan, East Africa, or China who have to migrate because of global warming this winter too. Not sure whether they’ll go to Europe, but millions isn’t an exaggeration in those cases.

China is too big of a territory; if the Chinese needed to migrate because of global warming, they'd likely move within their own land. Probably the same case with Pakistan.

Pakistan is already exploding at the seams due to population growth. It's not just a matter of moving, the country doesn't have enough resources to feed and clothe its population. The growth rate isn't abating and global warming is eating into water resources and desertifying land / reducing the arable area.

>China

D Folks from Dongbei moved to South even as far as Sanya because of the warm among other reasons. Warmer Dongbei might attract more people back.

> enjoyed the warmest October

I abhor this kind of language that news sites use. It takes away from the seriousness of the underlying cause (and its effects), and associates hot/warm weather with "good". Public apathy towards climate change starts here.

I did enjoy the warm and sunny october.

Would anything have been any better, if I felt miserable about things, I cannot really change?

That's true.. but on the other hand: I'm fully aware of the climate crisis .. still the weather for the individual here was pure enjoyment.. it is not so much of a news language thing here, but even climate activists enjoyed the weather?

I don’t enjoy warm autumn weather because The Economist tells me to. I don’t think avoiding talking about the weather like a human is necessary or helpful for dealing with climate change. But perhaps part of this is that I generally don’t believe that fixing climate change has much to do with terrifying the public about it.

Furthermore, it’s generally untrue that any particular warm October is due to climate change but rather the average October temperature over many years.

Yes, it feels like cherry picking when people say something like "climate change makes severe weather events more likely" in connection with a drought or unusually hot spell but ridicule anyone who tries to use a particularly cold winter as evidence that climate change is not happening.

We should avoid the association between climate and short term weather phenomenon altogether.

And yes, the COVID lockdowns showed the limits of individual action on climate change. Even if people can't leave their house (except for some limited purposes) the reduction in carbon emissions are relatively small. It's a problem for government and industry to solve in the main. The only difficulty is how to ensure that we elect governments who take it seriously without scaring some people?

> Yes, it feels like cherry picking when people say something like "climate change makes severe weather events more likely" in connection with a drought or unusually hot spell but ridicule anyone who tries to use a particularly cold winter as evidence that climate change is not happening.

Climate change results in more extreme weather, both warm and cold. So a particularly cold winter can be a result of climate change as well.

Sure but that's not the point. The point is associating any single weather event with climate change is wrong whether it helps your case or not.

You can say something like over the last decade droughts are 32% more frequently than in the previous decade but just tacking it arbitrarily on to any reporting about a particular weather event is misleading.

Ok, I agree with that.

Source?

I enjoyed it very much. It was good. Winter is coming now.

We're holding-off on running the heating in anticipation of having to crank it up to 11 come January.

What's galling about the stupidity of mass media is their ability to spin a story by focusing on 4 weeks, without any scope or informed consideration of a bigger picture.

It is relatively good. Climate change is bad, families left out in the cold because they can't afford rising gas and electricity prices is bad, so we are lucky in our being fucked. It could have been worse.

Silver lining and all that.

Looking at this as a silver lining is like looking at your arm amputation as a silver lining to your hangnail.

I can enjoy an unseasonably warm October. I did not enjoy the unseasonably warm July.

The seriousness of climate change is not lost on me, but your comment is rather heartless. In the UK the 'eating or heating?' question is real for many families this winter. It is fair to say that the warm October was a gift from the gods.

"Heartless" is uncalled for. The warmer weather may mean that fewer people are suffering today, but it is also a symptom of a trend that leads towards more suffering in the future. Is it heartless to think of those people in the future?

It is the poorest who will suffer the most from the unmitigated effects of climate change. It is also the poorest who cannot afford to pay for adequate heating at current prices. If we take the route of "Save the future poor by letting the living poor suffer" we will always be able to justify policies which unfairly impact the poorest in society.

and regardless of when the poor suffer, the sad truth is always that they didn't have to

  > Is it heartless to think of those people in the future?

Are those people in the future voting today? That's what drives policy.

No, but people who aren't selfish assholes should be voting with an eye toward the future.

Ok, since you started, let me challenge that head on: so far climate change is good. Cold-related deaths decreased something like 1-2 orders of magnitude more than a paltry increase in heat deaths.

You're trying to make me fill guilty for enjoying nice weather? Really? Well, how do you feel about advocating for literally more dead people in the foreseeable future?

And before you try bringing doomsday scenarios into that, no official prediction I've read supports a Venus-like scenario. On the other hand, simply by following current trends in 50 years we'll have massively increased resources and tech: great batteries, probably fusion, AI, efficient carbon capture and the cheap power to do it etc. So by pushing against climate change now, when we're still relatively poor and primitive, you just divert resources from growth and end up killing more people than needed.

You're counting chickens a bit early.

>Cold-related deaths decreased something like 1-2 orders of magnitude more than a paltry increase in heat deaths

I think this might be important to mention

Most of the world indeed does not live in the US or Europe

Wow, that's almost delusional. It's like you don't understand what drought is, or haven't looked at any of the predictions about heat waves, the mass extinction events, the extreme weather, the fires...

This is a new level of madness from the fight against the fight against climate change.

Don't look up, my friend.

Yeah, delusional.

https://www.thelancet.com/journals/lanplh/article/PIIS2542-5...

> 8·52% were cold-related and 0·91% were heat-related [...] Eastern Europe had the highest heat-related excess death rate and Sub-Saharan Africa had the highest cold-related excess death rate.

Or look here and show me the disasters we're likely to have: https://www.ipcc.ch/sr15/chapter/spm/ Cause a see a bunch of "not good", but I somehow fail to see any "billions will die". Or is that not an official enough source for you?

But yeah, it's easy to say "delusional" and drop a bunch of scary words without context. Drought is the thing farmers deal with every few years for literally over 10 millennia. Fires? Extreme weather? yeah, we have that, daily. Without putting some numbers on that it's just fearmongering. But putting numbers makes your position vulnerable - because on one hand global warming does have some good effects, and also wealth and tech more than compensate the ill-effects. For example you may find numbers on extreme weather increasing - but if you look at people affected by it, it's steadily going down. Not exactly the picture you're trying to paint with the scary words.

> https://www.ipcc.ch/sr15/chapter/spm/

You're linking the 1.5 degrees warming report, which is already known to be an impossible target, the warming we'll reach if we stop carbon emissions completely by 2050; 2 degrees is the new target. We are nowhere near to being on track for such a goal, so you should actually look at the 3+ degrees predictions.

I should admit that I was somewhat wrong to bring up droughts - the report is much more concerned with flooding. I also forgot one of the most catastrophic predictions - the melting of the polar ice caps and resulting ocean level increase - but I suppose that's also a net positive in your book, somehow.

Regarding the increased frequency of extreme weather, the reports are again very clear [0]:

> It is virtually certain that hot extremes (including heatwaves) have become more frequent and more intense across most land regions since the 1950s, while cold extremes (including cold waves) have become less frequent and less severe, with high confidence that human-induced climate change is the main driver14 of these changes. Some recent hot extremes observed over the past decade would have been extremely unlikely to occur without human influence on the climate system. Marine heatwaves have approximately doubled in frequency since the 1980s (high confidence), and human influence has very likely contributed to most of them since at least 2006.

> It is likely that the global proportion of major (Category 3–5) tropical cyclone occurrence has increased over the last four decades, and it is very likely that the latitude where tropical cyclones in the western North Pacific reach their peak intensity has shifted northward; these changes cannot be explained by internal variability alone (medium confidence).

> Human influence has likely increased the chance of compound extreme events18 since the 1950s. This includes increases in the frequency of concurrent heatwaves and droughts on the global scale (high confidence), fire weather in some regions of all inhabited continents (medium confidence), and compound flooding in some locations (medium confidence).

[0] https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR6...

I personally dislike replies like "you didn't even read my comment" because, let's be honest, I don't always read very carefully the comments I'm replying to. But I do have to quote my comment above :)

> But putting numbers makes your position vulnerable - because on one hand global warming does have some good effects, and also wealth and tech more than compensate the ill-effects. For example you may find numbers on extreme weather increasing - but if you look at people affected by it, it's steadily going down.

I really doubt you can find numbers of people suffering more than 20 years ago. You might be tempted to say that it isn't fair, that the developing countries are a lot less poor now - a lot less starving children in Africa, China is middle class and so on. Which is exactly the point - industrialization is more than compensating for anthropogenic changes, and it keeps doing that at an accelerated rate. I don't think raising ocean level is a good thing, but I do have to point out that Netherlands is dealing with sea level a lot better than West Africa would - and in another 50 years West Africa should be where Netherlands is now.

Anyways, I'm not against limiting climate change. I am very much against knee-jerk reactions like the OP, because they do real harm. Post-Covid Europe went ahead and pushed climate legislation, ignoring the pandemic and the economic crisis that was already peeking from around the corner. They cut a lot of slack from the system, and the next shock sent energy prices and inflation soaring.

A more informed and balanced policy would have prevented that. But comments that call an opposing view as "delusional" aren't really helping on the informed and balanced front.

We can't be in denial about climate changes having positive effects as well - e.g. cold countries will spend less on winter heating. That's normal, basically every phenomenon has positive and negative consequences, and what ultimately counts is the net impact.

I think this might have been a bad choice of words, I interpret the writer as intending "enjoyed" here to mean "to have had the use or benefit of" the warmest October, rather than explicitly endorsing that unseasonably warm weather is pleasurable. One does not need to be satisfied by something they "enjoy", especially in formal or legal language.

> Mild autumn weather has sent European gas prices plummeting

Ok. So the gas prices are influenced by the weather ? That explains some things. /s

The weather affects the demand for gas which affects the price. How is this controversial?

Joke being Russian flagrant disregard for climate change contributed to warmer winter.

To be completely fair they were mostly just the drug dealers, not the drug addicts.

That being said my Russian friend who moved to the EU a few years ago was shocked with the prices of fuels around here and promptly sold her 20yo Camry, which was quite the gas guzzler by EU standards.

Fuel is cheap in Russia and for Moscovites like her doubly so.

On another note, Russia is also among the least negatively affected countries by climate change. With the weather warming up, they may gain new arable land and even a few ports in the Arctic and Pacific.

For sure not the crazy buying spree,… and it’s not yet winter. Prepare for the worst hope for the best, damn the gas prices. Health is priceless, confort is subjective.

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