EU faces Gas Crisis, Russia Purposefully Burns $10M of Gas a Day
Since invading Ukraine in late February, Vladimir Putin's Evil Empire has been at odds with Europe over energy. Due to a missing turbine issue with the West, Gazprom suspended Nord Stream 1 flows. It has cut off the gas supply to other EU nations because it insists on payment in rubles rather than euros or dollars from "unfriendly" countries.
Since Russia, a crucial gas supplier, invaded Ukraine in February, precipitating sanctions, EU governments have been grappling with enormous price spikes in the cost of their energy supplies.
The nations supporting Ukraine attempt to reduce their dependence on Russian oil and gas.
Russia, which supplied the European Union with forty percent of its gas supply in the previous year, has now begun to restrict shipments.
Along with the price of gas, the cost of electricity has risen to record levels.
The generation of energy still makes significant use of natural gas. The increased expense is directly attributable to the higher cost of gasoline.
Significantly, this pricing is used for purchasing power in wholesale quantities, even when it comes from renewable resources that are significantly less expensive.
Austria's Chancellor Karl Nehammer recently stated, "we have to halt this madness that is happening right now on energy markets."
"We cannot let Russian President Vladimir Putin determine the daily price of electricity in Europe," he continued. "That would be unacceptable."
The mechanism used to price electricity sold on the EU market has also come under fire from the President of the EU Commission, Ursula von der Leyen.
Germany, which will be the top importer of Russian gas in 2020, has been working feverishly to increase its gas reserves before winter onset, despite Russia has reduced exports.
Its goal is to have 85% of its gas capacity filled by the end of October. To accomplish this goal, energy-saving measures have been put into place.
Robert Habeck, Germany's Minister of the Economy, stated that these efforts, together with purchasing gas from alternative suppliers, had allowed Germany to accomplish its objective earlier than anticipated.
According to his estimation, the goal of 85% might be accomplished by the beginning of September.
Alexander de Croo, the Prime Minister of Belgium, issued a warning to the population last week, urging them to "hope for the best and prepare for the worse."
And on Monday, French Prime Minister Elisabeth Borne reminded business leaders that they need to submit plans for conserving energy by the end of the month or else there could be rationing of the resource.
According to analysts, Russia is restricting natural gas exports to Germany and other countries, which could lead to an energy crisis in Europe during the winter months. At the same time, Russia is reportedly wasting natural gas with a daily value of approximately $10 million near its border with Finland.
An examination of heat levels and satellite data conducted by Rystad Energy, the state-owned gas giant Gazprom wastes approximately 4.34 million cubic meters of gas each day at a newly constructed liquified natural gas (LNG) facility by "flaring" it off.
On Friday, the BBC brought the Rystad analysis to public attention for the first time. This is comparable to 1.6 billion cubic meters annually, which is approximately 0.5% of the bloc's gas demand. Based on the price of European spot gas from the previous week, this is worth approximately $10 million each day.
According to Rystad, the flaring at the Gazprom plant in Portovaya is a "disaster" for the environment because it emits almost 9,000 tons of carbon dioxide every day. That is the same amount of emissions created over the course of an entire year by more than 1,100 households in the United States that are considered typical.
The facility may be close to a compressor station located near the beginning of the Nord Stream 1 pipeline. This pipeline is one of the primary conduits via which Russian gas is transported to the European Union.
According to Rystad, Russia is burning gas that would otherwise have been exported to Europe through the pipeline. This pipeline is responsible for more than a third of Europe's gas imports, but flows have been throttled back to only twenty percent of normal levels.
CNN's request for comment was not met with an immediate response from Gazprom, the state-owned energy firm in Russia.
According to Rystad, Russia's gas exports to Europe are down 77% so far this year compared to the same period in 2021. This trend has been observed since the beginning of the year. According to information provided by the International Energy Agency, Moscow was responsible for 45% of the total volume of gas imported by the European Union in 2017.
Since Russia began its invasion of Ukraine almost six months ago, the bloc has been working toward weaning itself off Russian gas. To avoid having to implement energy rationing this winter, it is rushing to fill up its storage tanks, reduce its consumption, and secure alternative energy sources.
The question is, why does Russia waste some of the priceless gas it produces? It's possible that this is just a normal part of operations, or it might be a message being sent to Europe.
"The burning flame is clearly apparent," Rystad stated in its remark, "perhaps signaling that gas is available and waiting to flow to Europe if favorable political contacts are resumed."
On August 7, 2022, satellite footage captured a gas flare in the Russian region of Portovaya. Handout courtesy of Reuters featuring imagery from the European Union's Copernicus Sentinel-2 satellite - European Union/Copernicus Sentinel-2/Reuters
According to Rystad, the LNG facility at Portovaya is scheduled to operate later this year, and flaring is typically carried out as part of the routine safety testing of newly constructed plants.
However, the report stated that "the expected volume and duration of this continuous flaring episode is extremely extreme for this to be the only explanation."
According to Zongqiang Luo, a senior analyst, gas and LNG at Rystad, who was interviewed by CNN Business, "This sort of burning has never happened in history." Luo was referring to the amounts of radiant heat recorded in the area.
He went on to say that "for the Portovaya LNG complex, this kind of flaring is quite significant."
Henning Gloystein, director of Energy, Climate and Resources at Eurasia Group, stated in an interview with CNN Business that it is likely that Russia is burning gas produced as a byproduct during oil extraction.
In more typical circumstances, a significant portion of this gas would have been injected into the pipeline grid and then sold in Europe. Because Russia drastically reduced the amount of gas it exported to Europe, the majority of the gas was initially stored within Russia. "Since those are most certainly at capacity at this point, the gas has nowhere else to go; as a result, we are torching it," he explained.
Russia may be trying to communicate with Europe as well.
According to Davis, "Russia may be trying to make a political point by saying [to Europe], 'see, we've got this gas, and we're flaring it; you're choosing to make it harder for us to get it to market.'"
After witnesses in Finland reported seeing enormous flames in July, Rystad initiated an investigation into the gas flaring that was taking place at Portovaya.
Since it invaded Ukraine at the end of February, Russia has been engaged in a standoff with Europe over energy policy. Because of a disagreement with Western countries over the disappearance of a turbine, Gazprom has reduced the amount of gas that passes through the Nord Stream 1 pipeline in recent months. It has also entirely cut off supply to other EU states as a result of its insistence that "hostile" countries pay for gas in rubles rather than euros or dollars. This is because Russia wants to protect its energy industry.
In addition to the carbon dioxide being released into the atmosphere by the flare, it is quite likely that the flare is also causing damage to the environment in other ways.
According to Davis, the flaring process would most likely result in soot production, which is especially harmful to the Arctic region. A significant portion of the soot will make its way onto the ice in the Arctic, where it will soak up additional heat from the sun and hasten the ice melting process.
According to Davis, "it's almost definitely the case that the flare is not running at a hundred percent efficiency, and as a result, it's also producing methane, which is 80 times more potent as a greenhouse gas than carbon dioxide."
Russia burning off $10m worth of gas every day - BBC News