That's all true, but there is a little bit of hope:
One major cause for the current extreme gas prices is the fact that many EU countries are filling up their gas buffers now for the winter. So on top of the gas scarcity, there is also extreme demand at the moment.
Some countries have reported that they are (almost) done. This will decrease demand and prices will go down. At least until the winter begins ..
The current gas prices haven't even reflected yet that the Russians have shut down North Stream 1 for good.
Anyone still thinking that this will ever reverse until the country is called Eastern Ukraine instead of Russia is in for a very rude awakening. There will be no more gas from Russia and the import capacity for other sources is already booked out.
To make it worse: when the winter is over, the crunch to refill the storage will begin again, and this time with no Russian capacity at all and to make it worse likely without (or with significantly reduced output from) the Dutch gas field in Groningen [1].
It will reverse as soon as the EU removes the sanctions and opens Nord Stream 2. Right now, the sanctions are pushing up prices, making the Russian government fabulously wealthy. Price caps are even going to make things worse. Ethics don't trump economics 101 nor do they keep grandma from freezing to death, unfortunately.
I think conflict escalation is more likely than Europe conceding to get the fossil gas taps turned back on. The world can’t be held hostage by a madman forever.
Unfortunately, with most of Italian politicians being in the pockets of Putin and massive protests expected across Western Europe, it is very well possible that the sanctions get lifted.
We have experience in delivering ourselves as hostages to Putin in exchange for cheap gas - the events following the 2014 invasion of the Krim should be more than enough proof of just how many spineless and corrupt "leaders" Europe has. I have no doubt that there are enough who will cave to the pressure of the streets should the situation escalate.
There are mechanisms to prevent that on a large (EU) scale, and US probably will use them if needed. Threats or sweet deals to politicians will keep them in line.
Governments seem to be responding to this. This week, Russia is saying it will block all sales to any nation implementing the G7 proposed price cap on Russian gas. (Russia is free to not sell anything if they don't want to, of course).
However, thanks to this invasion, Russia now only has a few years remaining of such significant gas exports left, no matter what: the more time passes the more substitutes for Russian gas are installed, because it is unacceptable to NATO and EU nations for Russia to have the capacity to threaten them with reduced fuel supply.
There's also the question of what fraction of Russian export capacity to Europe would vanish in the hypothetical where the pipelines going though Ukrainian territory were destroyed for whatever reason (I can think of at least three scenarios leading to that).
> There's also the question of what fraction of Russian export capacity to Europe would vanish in the hypothetical where the pipelines going though Ukrainian territory were destroyed for whatever reason (I can think of at least three scenarios leading to that).
Jamal is 33 billion m³ a year [1] and Soyuz 26 billion m³ [2], while each of the North Stream pipelines has 55 billion m³ capacity [3] - meaning that even in the case that both Jamal and Soyuz are irreparably destroyed for whatever reason, North Stream has more than enough capacity to take over. And that was the entire point why Ukraine, Austria and Poland were so opposed to the buildout of North Stream - had both been opened, Russia would have been able to completely cut out all the transit countries, leaving them completely at the mercy of Russia and Germany's notoriously Russia-amorous politicians.
For (effectively) state-owned companies, politics trumps economics 101. Removing sanctions will cause a marginal drop in natural gas price for a few weeks, but no more.
At this point, the European natural gas market is sufficiently skewed by state involvement that "economics 101" is marginally more useful than astrology. Geopolitics 101 is what you should turn to for answers.
Why would we open up NS2 if NS1 isn't even being used due to Russian decisions? What would added capacity do when they're not even using the existing links?
Putin can at any time decide to open North Stream 1 or the existing pipelines (Jamal or Transgas-Soyuz or Transgas-Drushba). It's understandable that Putin doesn't want to pay for the Soyuz and Drushba routes as he'd have to pay transit fees to Ukraine, but there is no excuse for not using Poland-Belarus bound Jamal even if North Stream 1 actually had technical defects. He is using gas as a weapon and extortion lever against Europe, there is no other way to describe it.
The call to open North Stream 2 is nothing more than Kremlin propaganda, and the only ones calling for it here in Germany are more-or-less plain Kremlin fifth column agents.
Besides: opening NS2 would be a symbolic caving before Putin - a signal that even invading a country for annexation gains, a no-no ever since WW2, is not too much of a crime for Europe to look away.
What do you want to do? the errors were made in the past. The only way forward is to normalise the relationship instead of further escalating this very dangerous situation.
> The only way forward is to normalise the relationship
Yes, by removing Russia from Ukraine. No one thought of "normalising" relations with Nazi Germany's Hitler as my ancestors marched through Europe either.
What should we do? Send everything we reasonably can to Ukraine so that they can drive out Russia. And then send some more that they can get rid of Putin once and for all.
> No one thought of "normalising" relations with Nazi Germany's Hitler as my ancestors marched through Europe either.
Yes they did - France and Britain attempted to appease Hitler for 5 years.
Of course the lesson to learn from that is exactly that appeasement doesn't work. Letting Hitler get away with annexing Czechoslovakia only emboldened him to go further.
Eventually enough has to be enough. I'd rather deal with the pain now than wait until Russia turns its attention to our own borders after it's finished with Ukraine.
Spot on. We've seen this before with Hitler, and we are smarter now.
It's true the situation is different - Putin has nukes - but we have nukes as well, and there are ways to be tough without escalating to using them. This means we do not have to fold just because Hitler has nukes now. We should be as tough as needed to stop the expansion.
if a peace deal is as easy as some suggest like the one that was prevented by Boris Johnson(guarantee that Ukraine will never be part of NATO etc.) then I do not understand why you would like to escalate the situation even further.
One has also to acknowledge that the economic sanctions and the military support for Ukraine are also very hostile moves.
This is so naïve. What makes you think that the Russians will keep North Stream 2 open, given the fact that they are closing North Stream 1 for the EU now?
If they will keep it open at all, it will be only after some heavy concessions on the EU side.
They did quite clearly mention requiring heavy concessions on the EU side as the very first bit of their comment (which I don't agree with). Everything they wrote was centred around if "the EU removes the sanctions".
