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Sep 9, 2022
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The collective West is preparing to introduce a price limit on natural gas purchased from Russia

Natural gas was given to us so that, by restoring industry, we would gain real economic sovereignty

In July, the European Union launched the seventh package of sanctions against Russia, and the boomerang effect on the West is becoming more and more tangible.

The idea of ​​a complete refusal of the West from Russian energy carriers was rejected. The West will still have to buy some volumes of oil, oil products and natural gas from Russia. Against this background, a “brilliant idea” appeared that it was possible to buy Russian gas at prices significantly lower than world prices (now these prices have already reached cosmic heights). Like, it is necessary to set a price limit for energy carriers for Russia.

The West, which has been teaching Russia for three decades (through the IMF, the World Bank, the WTO) that prices cannot be “fixed”, that they are the result of free market forces, is turning around.

On September 2, the G-7 decided to impose a price limit on oil purchased from Russia. The decision is still political, or framework. It is stated that the price sanction will come into force on December 5, when the EU embargo on imports of Russian oil comes into force.

The interested structures did not have time to digest this news, when the next one appeared. The collective West is preparing to impose a price limit on natural gas purchased from Russia. On September 7, the European Commission (EC) decided to propose to the EU Energy Council to introduce a price ceiling for Russian gas. This was reported Ursula von der Leyen. She noted that the European Union has already managed to reduce the share of Russian gas in its consumption from 40% to 9%.%. During the six months of the sanctions war, Gazprom’s exports to the EU in physical terms decreased by 4.5 times: from about 400 million cubic meters per day to 80-90 million cubic meters.

However, further contraction of the share and physical volume of Russian natural gas imports may take a long time. In the next 8 months, it is planned to reduce imports of Russian gas by another 29 million cubic meters. And still, next year there remains an almost incompressible “residue” in the amount of 50-60 million cubic meters.

Version Politico September 6 reported that the European Commission proposes to limit the price of gas from Russia in terms of electricity equivalent to 50 euros per megawatt-hour. This is equivalent to 512 US dollars per thousand cubic meters of gas and is almost 5 times lower than the price at which gas was traded that day on European exchanges. The French Foreign Ministry said that it is necessary to act cautiously, to begin with, try to introduce price restrictions for six months, and if it works, then extend it for another six months. Minister of Ecological Transition of Spain Teresa Ribera In an interview with Politico, she also spoke cautiously: “I think this is something that we definitely need to take into account… The question is to what extent do we think that this is something that we can afford.“. The greatest skepticism was expressed by Germany, which has one of the highest dependences on Russian gas imports in Europe. “We remain skeptical about issues related to capping gas prices, but in general we are ready for negotiations within the European framework”, — said the representative of the Ministry of Economics of Germany. Berlin rightly fears that the introduction of price restrictions could lead to a complete cessation of natural gas supplies to the EU.

The Czech Republic, which holds the European Union presidency until the end of the year, wants to remove the issue of introducing a price ceiling for Russian gas from the agenda of the EU Council of Ministers on Energy on September 9, “because this is a political tool, and not a solution to the energy crisis,” said the country’s Minister of Industry and Trade Joseph Sickel.

In Europe, they were delighted that at the end of August, natural gas storage facilities in the EU were 80 percent full, and by the end of autumn, Brussels officials promise that they will be 100 percent full. However, gas in storage facilities is not a fuel supply. This is an insurance reserve in case of severe cold or technical force majeure. 100% filling of storage facilities does not mean that natural gas supplies are cut off in winter. They must continue. One reserve stock for the winter is not enough. That is why Berlin is so afraid of the untimely (on the eve of winter, which promises to be cold) Brussels initiative.

Moscow has stated more than once that Russia will not cooperate with countries that have set a ceiling on prices for Russian energy resources.

Deputy Head of the Security Council of Russia Dmitry Medvedev immediately remarked: It will be like oil. There will simply be no Russian gas in Europe“. And Putin, speaking on September 7 at the Eastern Economic Forum (EEF), said:It will not lead to anything good for those who make such a decision. There are supply contracts. Will any decisions of a political nature be made that contradict the contracts? Yes, we simply will not fulfill them! In general, we will not supply anything if it is contrary to our interests. We will not supply gas, nor oil, nor coal, nor heating oil, we will not do anything! “Freeze, freeze, wolf tail” – we will sentence“.

Here is his remark by V. Putin at the WEF regarding attempts to introduce price limits on Russian oil and Russian gas: “Faced with what is happening now, they are thinking how to get away from it, to limit the price by administrative decisions. Another nonsense, nonsense. This will lead to further growth in global markets, including Europe.“.

Russia has enough customers ready to buy our natural gas. Most of them are in the East. First of all, China. Since the start of the sanctions war against Russia, natural gas supplies to China have grown both in value and physical terms. The main supply channel to China is the Power of Siberia gas pipeline. In the first half of the year, the volume of supplies through this pipeline increased by 63.4% in annual terms, to 7.5 billion cubic meters. m. According to the current contract, “Gazprom” must supply the “Power of Siberia” 15.6 billion cubic meters. m of gas this year, or 43 million cubic meters. m per day. The design capacity of the pipeline is 38 billion cubic meters. m per year. After the Power of Siberia gas pipeline reaches its full capacity, the total volume of Russian supplies to China will reach 48 billion cubic meters. m per year. In addition to pipeline gas, Russia is increasing supplies of liquefied natural gas to the east. The total supply of pipeline gas and LNG will fully compensate for the “residual” of gas supplies in the western direction.

Gas deliveries to the East go at prices that are noticeably lower than those at which gas is traded on European exchanges. Prices for Russian gas in the eastern direction are formed taking into account the mutual interests of the parties. At the same time, according to the fair remarks of Russian experts, LNG discounts for Chinese importers are excessive. They provoke Chinese companies to resell (re-export) Russian LNG to Europe. In fact, China earns on Russian gas and at the same time helps Europe in its sanctions war with Russia. Contracts with Chinese companies should include strict bans on the re-export of Russian LNG.

And one moment. For some reason, only substitution options are being discussed, providing for the export of natural gas outside the country. And the domestic market should become a priority direction of substitution.

Firstlyit is necessary to continue gasification of households (the level of gasification of the country’s population, according to Deputy Prime Minister Novak, is only 72%).

SecondlyOn the basis of domestic natural gas, it is necessary to create capacities that produce a product with a high added value. This is a wide range of industrial enterprises with high energy intensity of production, for which natural gas is not an energy resource, but a raw material. First of all, enterprises of the chemical industry.

Dmitri Ivanovich Mendeleev spoke: “Burning oil is like heating the stove with banknotes“. And it’s the same with burning natural gas. And we do even worse: we send natural gas for combustion abroad. D.I. would be alive Mendeleev, he would call it barbarism. Natural gas was given to us so that we could, having restored industry, gain real economic sovereignty. And the last crazy initiative of Brussels should lead us to this obvious conclusion.

Photo: REUTERS / Gleb Garanich

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