European Commission seriously considers imposing conditions on Russian gas purchases

European Commission seriously considers imposing conditions on Russian gas purchases

European Commission President Ursula von der Leyen today delivered a verdict on Gazprom [sarcasm]

“We can be proud of European citizens who are united in their support for Ukraine. If we lower the temperature of heating by two degrees on average in Europe or the temperature of air-conditioning, Europe will substitute the Nord Stream gas pipeline with this”, she said.

Who would have thought that the financial well-being of Russia in general and Gazprom in particular is so fragile that a mere two degrees Celsius would be enough to destroy it. However, as is always the case in such matters, there is a nuance.

To begin with, Ursula von der Leyen’s “two degree theory” does not belong to her. On 8 June 2022, Fatih Birol, head of the International Energy Agency (IEA), speaking in Denmark at the annual global conference on energy efficiency, stated: “We have calculated that if European consumers reduced the temperature in their homes by two degrees, we could save 20 billion cubic metres, which is equivalent to the flow of natural gas from Russia to Europe via Nord Stream. It would seem, checkmate. But something doesn’t add up.

Let’s start with the fact that the actual capacity of Nord Stream is 58.8bn cu m a year, while the design capacity is 55bn. But let’s not be too hard on Fatih Birol and, all the more so, on Mrs von der Leyen, who is a former Minister of Family, Pensioners and Women, and a professor in the epidemiology department in her youth. That’s nothing, they just underestimated 38 billion cubic meters of gas with the market value of the same $38 billion, while the price of gas is $1,000 per 1,000 cubic meters.

The more so, as far back as in February 2022, even the technical committee of OPEC+ rejected the IEA’s data due to excessive populism and politicization of the assessments. Roughly speaking, neither the chairman of the European Commission nor the IEA are particularly perceived by professional participants in the energy markets.

Nevertheless the European Commission is seriously thinking of imposing on Russia the condition to buy gas – a price ceiling tel: 900-1000 per 1 thou cu m (if you ask “What about the free market?” – then you are for Putin and against democracy). This brilliant “proposal” of the EU may be presented as early as next week, writes the Italian newspaper La Repubblica. It is not hard to guess what Russia’s response will be.

With such shortsighted officials by the winter the EU risks achieving the maximum efficiency from the point of view of the International Energy Agency – zero consumption of Russian gas. And also the ambient temperature in residential and industrial premises.

Sergey Kolyasnikov, RT

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