In response to a series of cuts and cuts to gas supplies by Russia’s state-owned Gazprom, the European Union is considering next steps to regulate natural gas supplies within the bloc. Currently, the continent’s subterranean stocks are 57% full. The European Commission’s proposal is for each country to reach the 80% level by November 1.
Analysts at Bruegel Research Center in Brussels warn that Bulgaria, Hungary and Romania “are unlikely to reach the EU’s 80% target if they continue at their current pace”, while Germany, Austria and Slovakia are likely to find it difficult to fill their tanks. If the gas coming from Russia is completely cut off. A cut of this size could push gas prices back to the peak of €206 per megawatt-hour, recorded on March 7, fueling inflation.
There are efforts to build more pipelines connected to Azerbaijan and Norway. In Germany, which does not have import terminals, four floating terminals are being built, two of which are expected to be operational by the end of the year. Despite these initiatives, the focus on sustainability has been set aside to complete energy production, and return to full operation of coal-fired plants in Germany and the Netherlands.
Even with all the measures taken by the European government, the security of gas supplies remains fragile. Power plants in countries like the United States and Qatar are running at full speed, representing competition between Europe and Asia for limited resources. European law requires the government to ration gas supplies to industries and prioritize the supply to homes, schools and hospitals – which could lead to shutdowns and closures of industries. According to experts, it will cost jobs and growth in an economy already suffering from high inflation and fears of a global slowdown, as central banks raise interest rates.
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