Gas prices have jumped, upsetting world markets, with a very concrete and very expensive consequence: Europe and Asia are outbidding themselves to snap up cargoes of liquefied natural gas (LNG) produced in the United States, in Qatar or elsewhere.
And while countries like Spain and France have frozen tariffs for consumers, others like Belgium have more or less let suppliers pass the increase on to their customers.
“I panicked a bit,” says Sofie, owner of her poorly insulated 90 square meter house in Oostduinkerke, heated by a gas boiler. She paid 120 euros a month before the war for gas and electricity: her bill rose to 330 euros.
On reflection, she does not regret this “realization”. Today she monitors her consumption, heats to 18°C, and finds out about installing solar panels and double glazing…
Like Sofie, a new generation of Belgians, French or Italians lost their energy carelessness in 2022 and learned to monitor their radiators. In the old world, gas was plentiful and cheap. Its reference price on the European market varied little, around 20 euros per megawatt hour. This year, it rose to 300 before falling back to around 100 euros…
“I have never known such a chaotic period,” says AFP Graham Freedman, an analyst at Wood Mackenzie, who has been examining the natural gas market for 40 years.
“Extreme” reductions
Because of the crazy prices, factories, especially in the German chemical industry, fed with gas from the east since the Soviet era, had to stop. However, European reserves were filled to the brim in the summer with the last cubic meters of Russian gas, and no one suffered a cut.
“Until February, the very idea that Europe could manage without Russian energy seemed impossible,” recalls Simone Tagliapietra, of the think-tank Bruegel in Brussels. “The impossible has become possible”.
The Europeans were lucky: the mild autumn delayed the ignition of the boilers.
Be that as it may, the drop in household and business consumption is exceptional: around 25% in October compared to 2019-2021 in the European Union, calculates Bruegel.
Half of Germans have gas boilers, and their drop in consumption is “extreme, huge”, confirms Lion Hirth, professor of energy policy at the Hertie School in Berlin. He sees it as a desire “not to pay Putin”, as much as to reduce bills.
In a few months, Russia has thus lost its first gas customer, Europe, whose purchases have gone from 191 billion cubic meters in 2019 to 90 billion this year, and probably 38 next year, predicts Wood Mackenzie.
We had to compensate with this LNG that the EU used to neglect because it was more expensive.
With a perverse effect: “Europe began to pay more than Asia for gas, and countries like India and Pakistan could not compete”, underlines Graham Freedman. Climate consequence: for lack of LNG, these less wealthy countries burn more coal.
Et 2023 ?
To unload LNG from LNG carriers, port terminals capable of regasifying it and reinjecting it into the land networks are needed. Germany had none, France and Spain several.
This gives a new role to the gas pipelines in north-eastern France, which traditionally served to import gas from the east, and now send imported gas eastwards via Fos-sur-Mer or Saint-Nazaire, and for the first time to Germany.
“We send a lot more gas back to Switzerland”, which then sends back to Italy and Germany, explains to AFP Guillaume Tuffigo, of GRTgaz, which manages the French gas pipelines, while showing AFP a compressor station at the t is in France, lost in the countryside of the Vosges, one of the essential links to this new European solidarity.
For next winter, and the following ones, there will be no more Russian gas to fill the reserves.
The colder the winter, the more LNG will therefore have to be purchased from spring… and the more “the fight” between Europe and Asia will intensify, explains Laura Page, gas specialist at Kpler, to AFP.
“There is not enough gas in the world to replace Russian gas,” agrees Graham Freedman.
It is not until around 2025 or 2026 that new LNG projects will produce millions of additional tons.
By then, will Europeans have learned to live at 18°C?