Natural Gas shortages, falling wind power output, nuclear power outages, and cold weather have all conspired to give Europe one of its greatest energy crises on record. Despite this, Europe’s energy troubles continue to worsen at every turn.
On Tuesday, European Natural Gas prices reached a new high as a pipeline supplying Russian gas to Germany switched flows to the east, while US ships carrying LNG planned for the European market are diverting to Asia, where prices are even higher.
Westward gas flows through the 2,607-mile-long Yamal-Europe pipeline, one of Russia’s main conduits to Europe, have been steadily declining since Saturday, but have abruptly reversed course, a move the Kremlin claims has no political repercussions. Some western politicians believe Russia is using Natural Gas as a weapon in the political squabble over Ukraine, as well as delays in the approval of another contentious pipeline, Nord Stream 2. Of course, Russia has denied any connection.
The ability of Gazprom to act as a swing provider was put to the test when it dropped output considerably in 2020 and then immediately increased it in 2021. Yet, for one reason, Gazprom has been unable to put any additional spare production capacity online when it is most required. The LNG business in the United States has risen quickly from relative obscurity just five years ago to threaten the giants. Since the Lower 48 states first began exporting LNG in 2016, the United States‘ liquefied Natural Gas (LNG) export capacity has rapidly grown. After Australia and Qatar, the United States became the world’s third-largest LNG exporter in 2020.