Europe’s Race to Secure New Energy Sources Is on a Knife’s Edge

In some countries, including Britain and Germany, energy companies have not yet fully passed these costs to their customers, meaning the hardest blows are yet to come.

“The biggest risk at the moment is an explosion of household and industrial energy prices this winter, which the public and industry can barely deal with,” said Henning Gloystein, a director at Eurasia Group, a political risk firm.

Shipments of liquefied natural gas, the chief alternative to piped-in gas from Russia for much of the continent, remains a costly alternative. And Europe’s growing appetite for L.N.G. may be hurting other regions of the globe that rely on the fuel.

Europe has essentially been bidding liquefied gas away from other markets, chiefly in Asia, where China, Japan and South Korea are major customers. Europe is “taking L.N.G. away from markets that are not prepared to pay the prices that Europe may be prepared to pay,” Ben van Beurden, chief executive of Shell, a provider of L.N.G., told reporters on Thursday. “That is a very uncomfortable position to be in.”

Countries like Germany and Romania are also taking other steps, including bringing back coal-fired electric power plants or delaying their retirement. The idea is to minimize the amount of gas used at power plants to generate electricity and save it for essentials like home heating or running factories. On Thursday, the International Energy Agency forecast that global coal demand this year would reach almost nine billion tons, matching its peak of 2013.

Article source: https://www.nytimes.com/2022/07/30/business/europe-natural-gas.html