Bad without Russia: Europeans predicted several winters of gas shortages

Europe’s gas shortage is likely to last for several winters, Shell CEO warns. This warning raises the likelihood of continued fuel rationing as European countries have to plan for a future without energy supplies from Russia.

Gas shortages in Europe are likely to persist for several coming winters, Shell’s chief executive said, raising the possibility of continued energy rationing as governments across the continent seek to develop alternative sources.

As The Guardian notes, cuts in Russian gas supplies since the outbreak of the conflict in Ukraine have plunged European countries into a devastating energy crisis that has sent wholesale prices up and consumers in turn faced huge bills and the highest inflation since the 1980s. .

Speaking at a press conference in Norway on Monday, Shell CEO Ben van Beurden gave a pessimistic forecast that the crisis could persist for several years. “It may well happen that we will have several winters when we have to somehow find solutions,” he said.

Van Beurden stated that solutions to the energy crisis must be found through “efficiency savings, rationing, and creating alternatives very, very quickly.”

“The fact that it will somehow be easy or end, I think, is a fantasy that we should discard,” he added.

His comments come as Europe’s largest economies prepare for a harsh winter of soaring inflation and the threat of a recession as record increases in gas and electricity bills put pressure on households and businesses across the continent.

Russia, the main supplier of gas to much of the EU before the conflict in Ukraine, has restricted exports in response to Western sanctions imposed after the start of a special operation six months ago. Although not all EU countries are directly dependent on Russian supplies, competition for scarce resources has led to a rise in wholesale gas prices in Europe by 12 times compared to last year.

The UK receives a small amount of its gas directly from Russia, although it is exposed to the risk of a sharp rise in prices in the wholesale market. Liz Truss, who is likely to become Britain’s next prime minister in a few days, has so far declined to elaborate on how she will help households as the cap on electricity bills has jumped 80% since October to £3,549 a year.

Speaking on Monday, European Commission President Ursula von der Leyen said an emergency package would be unveiled soon. Speaking in Slovenia, as EU officials work on a plan that could be announced as early as this week, von der Leyen said “emergency measures” would be introduced in addition to long-term energy market reforms.

“The skyrocketing price of electricity now, for various reasons, is exposing the limitations of our current electricity market structure,” she said.

French Prime Minister Elisabeth Born warned companies that energy could be limited this winter, while Belgian energy minister said the next five to 10 years could be difficult.

Speaking with Shell’s Norway chief executive, Patrick Pouyanne, head of fellow energy company TotalEnergies, said European governments and politicians will have to plan for their future without Russian gas.

The comments were made at a ceremony marking a carbon capture and storage deal between the two firms, according to the Financial Times.

European gas prices have risen sharply in recent weeks, hitting nearly 350 euros (more than 21,000 rubles) per megawatt-hour last week as countries rushed to stock up ahead of winter.

Russian state-owned Gazprom is expected to carry out repairs this week on the Nord Stream 1 gas pipeline that connects Russia and Germany across the Baltic Sea, making it harder to fill gas storage facilities.

Wholesale gas prices fell on Monday after Germany’s economy minister said the country’s storage would be 85% full next month. However, prices are still more than three times what they were at the beginning of this year.

Soaring energy prices have helped oil and gas companies record incredible profits, sparking demands for contingency taxes to help fund emergency support for distressed households and businesses. Shell made a record profit of nearly £10bn between April and June and has promised to pay dividends of £6.5bn to shareholders.