Page 6 - GLNG Week 40 2022

GLNG COMMENTARY GLNG

Bruegel gas use tracker

shows a tight market but

falling EU consumption

COMMENTARY THIS winter is going to be tough. An energy season starts and, depending on the weather, it
crisis has already led the EU to spend over half seems that Europe can squeak though this win-
a trillion euros on relief and support. Only last ter. A key element will be for Europe to reduce
week Germany announced a new €200bn pack- its gas consumption as relatively small reduc-
age to deal with the crisis that comes on top of tions make a big difference to the volumes of
the €80bn it has already spent. And the IMF gas needed. European Commission President
predicts that a third of the world’s nations have Ursula von der Leyen championed a plan to
already gone, or will go, into recession in the next reduce gas consumption by 15% in July in an
12 months. At a recent summit the EU estimates effort to keep the lights on but while she wanted
that the bill could rise to €2-4 trillion by the end the reductions to be mandatory and EU-wide in
of 2023. Record high gas prices is a major con- the end the plan was massively watered down,
tributing factor to all these problems, especially with 17 out of the 27 member states receiving
in Europe. exemptions or calve outs.
“The energy crisis, especially in Europe, is not Belgium-based think-tank Bruegel has been
a transitory shock. The geopolitical realignment tracking gas consumption and reports that so far
of energy supplies in the wake of the war is broad Europe has managed to reduce gas consumption
and permanent. Winter 2022 will be challenging, by 7%, which will help.
but winter 2023 will likely be worse,” Pierre-Oliv- “So far in 2022, we estimate that EU natural
ier Gourinchas, the Director of Research of the gas demand (which does not include storage fill-
IMF, said in a recent blog. ing) has declined 7% compared to the average
The EU is taking action. The gas storage tanks from the period 2019 to 2021,” Bruegel said in a
are now over 90% full just before the heating report. “Demand in August 2022 was 23% down.

P6 www. NEWSBASE .com Week 41 14•October•2022