Page 5 - FSUOGM Week 44 2022

FSUOGM COMMENTARY FSUOGM

IEA Director Fatih Birol.

around 20 bcm. Russia’s winter generals
If Russian gas supply to Europe is halted Russia’s greatest weapon in the current standoff
completely, and if Chinese LNG imports ramp with the West over Ukraine has been its natu-
up, the IEA estimates that there will be a 30-bcm ral gas supply. Its army has performed badly in
supply-demand gap for Europe, at a time when this war. Its attempts to create a global political
the continent will urgently need to restock on the alliance against Western hegemony have failed.
floor for the following winter. This gap could rep- Its economy is now in freefall. But the more that
resent nearly half of the gas needed to fill storage Moscow uses its gas as a weapon, the less lever-
facilities to 95% of capacity by the start of next age it has.
year’s heating period. Russia has already cut gas supply to Europe
by close to two thirds on a year-on-year basis in
Not out of the woods yet 2022. This will surely lead to a deep economic
“With the recent mild weather and lower gas recession that will likely spread globally, and,
prices, there is a danger of complacency creep- ironically, this will also hurt the Russian econ-
ing into the conversation around Europe’s gas omy when the prices of all commodities collapse,
supplies, but we are by no means out of the as they did after the 2008 financial crisis.
woods yet,” IEA executive director Fatih Birol But so far, Russia’s effort has not won any con-
said. “When we look at the latest trends and cessions from Europe. European governments
likely developments in global and European gas continue to send increasingly more arms and
markets, we see that Europe is set to face an even funding to assist with Ukraine’s war effort. And
sterner challenge next winter. the more that the Kremlin reduces its gas supply,
Governments need to carry out “immediate the more Europe realises that a future without
action,” Birol said “to speed up improvements in Russian gas supply is possible.
energy efficiency and accelerate the deployment A lot will depend on the weather in the com-
of renewables and heat pumps – and other steps ing months. But so far, the winter generals that
to structurally reduce gas demand.” defeated Napoleon and Hitler in their attempts
“This is why governments need to be taking to defeat Russia, have not appeared. Europe, so
immediate action to speed up improvements in far, is dealing with an unusually warm winter.
energy efficiency and accelerate the deployment Despite disruptions, global LNG supply is rela-
of renewables and heat pumps – and other steps tively ample. The Chinese economic slowdown,
to structurally reduce gas demand,” Birol said. which has led the country to cut imports by a
“This is essential for Europe’s energy security, record percentage, has gifted Europe with a very
the wellbeing of its citizens and industries, and convenient blessing. Countries across Asia are
its clean energy transition. The IEA will continue forgetting their climate commitments, for eco-
to work closely with the European Commission nomic necessity. They are turning coal plants
and governments across Europe and beyond to back on, and reducing their gas intake. And that
help tackle these challenges.” unused gas is going to Europe. ™

Week 44 07•November•2022 www. NEWSBASE .com P5