Algeria has long been a medium-sized player in the global oil and gas export game, but the energy crisis in Europe has opened the door for the North African nation to rise to the top. Italian Prime Minister Mario Draghi flew to Algiers just a few weeks ago to sign an agreement to boost gas imports from Algeria by 40% via an underused pipeline under the Mediterranean Sea. Other oil and gas exporters that have not previously been at the center of the global energy debate, such as Angola, Nigeria and the Republic of the Congo, are also emerging as potential players for Europe’s future. And European nations rushing to break free from Russian gas are turning to more reliable but costly liquefied natural gas suppliers, such as Qatar and the United States. The moves are part of a struggle in Europe to respond to the energy crisis triggered by Russia’s invasion of Ukraine. Russian President Vladimir Putin has in recent days criticized his enemies in the West by cutting off natural gas supplies to Bulgaria and Poland because they refused to pay in rubles. Other major consumers of Russian gas, including Germany and Italy, have tried to reassure their citizens that they are seeking solutions if Putin extends the shutdown as he has threatened. But in almost every scenario, the next 18 months will be a painful time for Europe, as the effects of high prices fluctuate around the world and governments struggle to power their factories, heat their homes and maintain their units. their electricity in operation. There are not enough alternatives in the short term to avoid major financial difficulties next winter if Russia cuts supply. This month, for example, the German central bank warned that the country’s economy could shrink by 2 percent if the war continued. “This is a very dangerous game to play,” said Edward Chow, an energy security researcher at the Center for Strategic and International Studies who has worked in the industry for decades. “I do not know how this should end. “It feels like it will end in a very bad place for both Western Europe and Russia.” “It simply came to our notice then [natural gas] “Let me go around,” Chow said. “No one will be able to produce more liquefied natural gas quickly, regardless of the fantasies that governments want to make.” Europe wants to cut off Russian energy. Climate policies can help. What has happened is a sudden global reshuffle of energy markets triggered by a sharp The recovery from Russia, which has spent decades trying to use its generous oil and gas reserves to integrate into the global economy, said Daniel Yergin, energy historian and vice president of S&P Global. For now, Europe’s gas market has become a jumble. Italy could turn to Algeria, Bulgaria could turn to Greece and Poland could turn to a long-planned expansion of a liquefied natural gas or LNG import terminal and a pipeline coming online from Norway. “It’s a dramatic, unexpected redistribution of global energy. “Two months ago, Europeans could not have imagined closing the door on Russian energy, and now it is only a question of how long it will take,” Yergin said. “And it is happening faster than we would have thought possible just two months ago. “In eight weeks of war, Putin has ruined what he has spent 22 years building: Russia’s integration into the world economy.” Germany, Europe’s economic machine, is particularly unprepared at the moment. More than half of the gas supply came from Russia before the invasion of Ukraine. Germany has reduced it to 35%, but is not in a good position to cut off Russian gas soon. It has no infrastructure to import liquefied natural gas and the country’s aggressive anti-nuclear stance has left it with just three reactors online. The other 14 were closed after the tsunami that struck the Fukushima nuclear plant in Japan in 2011. German Economy Minister Robert Habeck has said he expects his country to slide into recession without Russian gas. “I take it very seriously,” he said. The country managed to reduce Russia’s share of Germany’s crude oil imports from 35 percent to 12 percent. It has implemented the early warning phase of an energy emergency plan, including a public campaign to promote conservation. But if gas supplies fall sharply, the next step could be the coupon. Gas would flow first to hospitals and households, putting businesses at risk of losing power. Officials and analysts have warned that the effects could be a deeper recession than the German central bank had predicted earlier this year. As factories close, hundreds of thousands lose their jobs and inflation soars. Instead of buying oil and gas from Russia – where production costs are very low and pipelines are cheap – Europe must turn to in the shorter term to more expensive alternatives, such as the United States, which until seven years ago had no gas export facilities at all. European companies need to add $ 1.50 per 1,000 cubic feet – anywhere from 30 to 50 percent of the cost of gas itself – to get a liquefied natural gas tanker to travel from the Gulf of Mexico to Europe. . The empty ship then has to make the return voyage, a total of 24 days of transit. Poland has spent decades trying to stop Russian gas. Now he has no choice. European nations are also moving as fast as they can to diversify their supply, but energy producers cannot keep up. A rapid recovery project that makes new gas supplies available usually takes at least two to four years. At the same time, investors may be wary of large, long-term gas projects as soon as governments and businesses look for more environmentally friendly types of energy. Renewable energy sources – mainly solar and wind – have been shaken by the current crisis. “This will put the European transition to renewables and other sources of gas in Jet Skis,” said Cliff Kupchan, a political analyst and chairman of the Eurasia Group, a political risk advisory and consulting firm. However, despite the debate that Europe is stepping up its efforts to bring more renewable energy to the Internet, this is also a long-term proposition, complicated by supply chain issues and environmental controversy. Renewable energy prices around the world, after nearly two decades of decline, have risen in the past year and there is little room in Europe to quickly add legions of new renewable energy customers. “The point is, there is no supply,” said Flemming Sorenson, Europe vice president for LevelTen Energy, which negotiates energy market deals for large energy consumers looking for renewable energy sources. “There are a few new renewable energy contracts that can be signed and ready to start before 2024.” Sorenson cites Spain as an example of regulatory barriers that also prevent rapid rotation into other forms of energy. There are more than 70 gigawatts of solar energy waiting to be developed there. But the process of putting it all together is moving at a glacial pace, he said. Permits have only been approved for 20 per cent of these solar installations, he said. Roberto Cingolani, Italy’s energy minister, said in an interview that Italy was struggling to reach agreements with some African countries and now hoped to be energy independent of Russia by spring 2024. “It’s a real change, moving the central mass of the system south,” said Cingolani, who traveled to Angola and the Democratic Republic of the Congo last week. “I think the whole of Europe has realized that being heavily dependent on one country, one supplier, is not a very smart idea.” He said Italy was in a better position than other European Union countries to handle the transition, as it already has two pipelines to Africa and another to the east to Azerbaijan. However, he said the emergency plan would take some time to strengthen and that the country would be vulnerable in the short term if Russia abruptly cut off supplies. In such a scenario, Italian consumers could be called upon to reduce their use of air conditioners. And companies could face planned downtime in their energy supply. “The hope is that we do not have to do so much,” Cingolani said. “The hope is that we do not have to do anything at all.” Europe wants American gas. This could raise prices in the US. One thing that could reduce some of the pressure on energy-consuming nations would be to slow down the global economy. Recent lockdowns in China to eliminate coronavirus have likely reduced global oil demand by 1 million barrels per day, according to the consulting firm S&P Global estimates that it is difficult for Beijing to help Moscow. The United States and other countries are reducing strategic reserves at a rate of 1.3 million barrels per day. The International Monetary Fund estimates that the world economy will slow to 3.6% this year. This is also the time of year when Europe is supposed to build gas reserves. Last year, Russian cuts in supplies made it difficult to get through the winter. If Russia cut all its gas flows, the countries hardest hit would be Germany, with storage at just 33.5 percent, Italy at 35 percent and Hungary at 19.4 percent, according to a note to investors from RBC Capital Markets, an investment advisory. RBC arm. Where it all goes depends on the next moves of the Kremlin. Russia is heavily dependent on gas and oil revenues and would inflict economic pain on itself by cutting off Europe’s large economies from gas. At the same time, its European customers have already vowed to end Russian imports by 2027. Russia’s ability to use its energy flow as an economic weapon against Europe will only diminish. Some analysts suggest that this could prompt Russia to use this weapon …
