Manuela Schweig (third right), Prime Minister of the German state of Mecklenburg-Vorpommern, and … [+]
An industry expert said this week that neither the US government nor its drilling workers are responsible for the high prices that Europe is paying to import US natural gas.
Anna Mikulska, who studies the geopolitics of natural gas, said the price is derived from the seller’s response to the market.
“The United States is a significant supplier of European natural gas, but it is not American producers,” said Mikulska, a fellow at the Baker Institute’s Center for Energy Studies. “It’s the companies that buy gas from American producers, and it usually goes where the price is higher.”
German Economy Minister Robert Habeck accused the United States and other countries on Tuesday of imposing exorbitant prices on natural gas. The largest exporter of liquefied natural gas in the United States, Houston-based Cheniere Energy Partners, did not respond to a request for comment.
European storage is full
Europe appears to be meeting its goal of stockpiling sufficient supplies of natural gas for next winter, said Mikulska, a outlook shared by Goldman Sachs and the International Energy Agency.
โStorage is currently at a very high level, sometimes at 100 percent, most often above 80 percent,โ Mikulska said Wednesday during the Baker Institute Winter Market Update. “Europe really wanted this time around to have their storage full. They kind of learned a lesson last winter that it’s not a good thing (getting it less than full) especially if the bid isn’t made or it’s uncertain.”
Europe has boosted its storage not only by importing more gas from alternative sources, but by restricting industrial use of natural gas, which has prompted some companies to move production outside Europe.
“This was not without cost,” she said. It has come at the cost of reducing demand in the industry. And that’s the big story for this winter and next year. It’s not just about not being able to heat homes, which you’re obviously going to prevent, but it’s about Europe’s ability to recover from the industrial downturn caused by cutting off the gas supply to industry.”
She added that a cold winter could break European unity, because every country in the European Union has its own energy policy, and they can compete or conflict.
“If it gets too cold, we will see, most likely, it will be a test of European solidarity and the ability of Europe to manage its demand as a whole.”
She added that summer may not bring much relief next year if Europe is to refill its stores without any Russian gas. “It can be a challenge,” she said.
