Rationing Energy

American motorists may complain about the 'pain at the pump,' but there is no shortage of gasoline, unlike the availability of natural gas in Europe.

2 minute read

August 7, 2022, 7:00 AM PDT

By Irvin Dawid

Four natural gas storage tanks with European Union flag logos

ANTON ZUBCHEVSKYI / Natural gas storage tanks

“The European Union agreed yesterday to ration natural gas to help prevent a severe shortage of fuel for heating as the threat of a complete gas shutoff by Russia hangs over the 27-member bloc,” reported Sara Schonhardt for E&E News on July 27.

E.U. energy ministers endorsed the plan less than a week after the European Commission first proposed it — earning praise from European Commission President Ursula von der Leyen, who called the move a “decisive step” to blunt the threat of a full gas disruption by Russian President Vladimir Putin.

The same day (July 27), Russia cut the gas flow under the pretense of a mechanical issue, according to Bloomberg News on July 31.

Russia’s latest move came last week, when Gazprom PJSC blamed a turbine issue for reducing flows on the key Nord Stream pipeline to about 20% of capacity. In the fallout, gas prices jumped over 30% last week and electricity prices broke one record after another.

“Nord Stream 1 accounts for around a third of all Russian gas exports to Europe,” noted Reuters in a piece published July 27 on the “further escalation of an energy stand-off between Moscow and the European Union that will make it harder, and costlier, for the bloc to fill up storage ahead of the winter heating season.”

 [Related posts on the two Nord Stream pipelines: Hooked on Russian Gas, April 21, 2022 and Pipeline Politics Ruffle NATO Summit, July 15, 2018]

According to Eurostat, the EU's statistical office, 43 percent of natural gas imports came from Russia in 2020, followed by Norway with 21 percent.

Russia had weaponized energy three months earlier by shutting off the natural gas exports to Poland and Bulgaria.

Rationing plan

“Under the initiative, E.U. countries would voluntarily cut gas consumption by 15 percent between August and next April compared to annual averages over the same period,” adds  Schonhardt. “Mandatory cuts could be triggered in exceptional circumstances, according to the regulation.”

“Today this was a test for the unity and resolve of the union,” said European Energy Commissioner Kadri Simson during a press conference [July 26]. “With this agreement, we have a plan that takes us safely through next winter toward true energy independence.”

Additional related posts (beyond the three that appear below the post): 

Hat tip to POLITICO Power Switch, July 27, 2022.

Wednesday, July 27, 2022 in E&E News

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