"Europe’s Energy Crisis Has Ended Its Era Of Abundance" by Irina Slav

[Tom Nolan + 2,443]

 

[Tom Nolan + 2,443]

https://www.zerohedge.com/energy/swiss-citizens-who-overheat-their-homes-winter-could-face-hefty-fines-nd-3-years-jail

Swiss Citizens Who Overheat Their Homes This Winter Could Face Hefty Fines & 3 Years In Jail

by Tyler Durden

Thursday, Sep 08, 2022 - 05:55 AM

After the Swiss and Finns joined the Germans, Austrians, and Swedes in bailing out there energy providers, who are facing trillions in margin calls; new legislation covering Switzerland’s energy supply will make heating homes to more than 19°C unlawful in the event of an energy shortage.

In addition, hot water should not be heated to more than 60 degrees, and portable electric heaters, saunas, and heated swimming pools are prohibited.

Remix News' Thomas Brooke reports that Swiss citizens found to be in violation of the country’s new heating rules, which prohibit warming homes above 19°C this winter, could face daily fines of up to 3,000 Swiss francs and up to three years in prison.

To note, the World Health Organization has long held that a temperature no colder than 20°C is recommended for children, the elderly, and those with existing health conditions.

Markus Spörndli, a spokesperson of the Swiss Department of Economics (DEF) explained that “infringements of the law on the supply of the country are always misdemeanors, even […] crimes, and must be prosecuted ex officio by the cantons.”

The fine to be imposed on consumers found to be violating the new energy laws will range from 30 francs up to a maximum of 3,000 francs per day, Spörndli said, confirming the amount would be dependent on the nature of the offense and the economic situation of the perpetrator.

Furthermore, willful violations of the government guidelines could see consumers jailed for up to three years in prison, something Spörndli says the government hopes to avoid.

“The draft ordinances are based primarily on the fact that the vast majority of the population respects the laws,” he added.

Economy Minister Guy Parmelin told a press conference at the Federal Council last Wednesday that Switzerland is “not a police state,” but it is understood, as reported by Swiss news outlet Blick, that there may be spot checks undertaken to ensure people are complying with the rules.

Swiss cantons now have until Sept. 22 to discuss the proposals and address how they may be enforced, with some officials concerned they may be inundated with citizen complaints from nosy neighbors.

As such, the DEF only expects fines to be dished out “if the infringement was reported and checked and could then be proven.”

However, police chiefs believe enforcement will be difficult.

“There are still a few open questions that need to be clarified,” Fredy Fässler told Blick, adding that he does not want to see the energy police going door to door: “We want to apply the ordinance with discernment.”

As we previously highlighted, numerous other European countries are introducing similar restrictions in the face of a worsening energy crisis following the shut down of the Nord Stream 1 pipeline.

French economist Charles Gave said many more people aren’t buying the narrative that Vladimir Putin is solely to blame for the crisis.

“For the last 15 years, our European leaders have gone into a climate craze, promoting magic mirrors and windmills as the solution. It does not work. These solutions demand the same capacity in gas power plants,” Gave said.

[Tom Nolan + 2,443]

https://www.zerohedge.com/commodities/metal-producers-group-warns-eu-leaders-worsening-energy-crisis-existential-threat-our

Metal Producers Group Warns EU Leaders "Worsening Energy Crisis" Is "Existential Threat To Our Future"

by Tyler Durden

Thursday, Sep 08, 2022 - 03:15 AM

"We call on European and national leaders to look at all available options for safeguarding our companies and their future."

That is the desperate plea from 40 CEOs representing Europe's largest non-ferrous metals producers, who are urging emergency EU action to prevent permanent deindustrialisation from spiralling electricity and gas prices.

[ARTICLE CONTINUES]

[Ron Wagner + 706]

7 hours ago, Tom Nolan said:

China Is Aggressively Buying Up Cheap Russian LNG

By Irina Slav - Sep 08, 2022, 2:45 AM CDT

• Russia is selling liquified natural gas from the Sakhalin-2 project at a 50% discount and the operating company, a new state-owned entity, is still making a profit.
• In August, China's imports of Russian LNG rose to the highest level since at least 2019, with the country buying volumes that were previously going to Japan and South Korea.
• China's imports of liquified natural gas from the United States have been on the decline as Europe has been paying a premium for those shipments. 

Join Our Community

Russia is selling liquefied natural gas from the Sakhalin-2 project in the Far East to China at a 50-percent discount and still making a profit on it, Bloomberg has reported, citing unnamed traders.

“Russian supply is still making its way into the market, just with a reorganization of trade flows via market participants who don’t take issue with accepting Russian cargoes,” Saul Kavonic, an energy analyst at Credit Suisse, told Bloomberg.

The other two big buyers of Sakhalin-2 LNG, Japan, and South Korea, according to Bloomberg, stopped buying the commodity after Russia’s invasion of Ukraine. Japan, however, continues to receive Russian LNG from Sakhalin-2 under other contracts.

“It appears China is happy to take Russian LNG cargoes at discounts, swapping out alternative supply that can then be directed to Europe at higher prices.”

Despite the discount, LNG prices this year have soared so high that the operator of Sakhlin-2 is still making a profit. This operator, by the way, is a new state-owned entity that replaced the previous consortium.

The two Japanese partners in the original consortium were allowed to keep their stakes in the new entity as well. Shell abandoned its 27.5-percent stake in the project.

Bloomberg reports that data shows China’s imports of Russian liquefied natural gas rose to the highest since at least 2019 in August while shipments from the United States have been on the decline as they get diverted to Europe, which is ready to pay a premium for the supply.

Speaking of Europe, Poland this week suggested the European Union introduce a price cap on all gas imports, including LNG, as the costs of this alternative gas supply contribute to the energy price inflation cross the bloc.

For now, the European Commission, however, has only proposed a gas price cap on Russian imports following the same logic as the one employed by the G7 in imposing an oil price cap on Russian exports.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• TotalEnergies Denies Accusations That It Supplied Fuel To Russian Army
• Canada Set To Miss Out On A Massive LNG Opportunity
• Europe’s Energy Crisis Has Ended Its Era Of Abundance

https://oilprice.com/Energy/Energy-General/China-Is-Aggressively-Buying-Up-Cheap-Russian-LNG.html

All Russian oil and natural gas will be sold to someone but at a discount due to the Russian connection. China, India, Japan, etc will take it at a discount. We should avoid giving too much business to China, India, and Japan, because of it. Just a factor to consider. The fentanyl from China through Mexico is another one as is Mexico and Biden allowing illegal immigrants to flood our border. 

[footeab@yahoo.com + 2,190]

7 hours ago, Tom Nolan said:

 will make heating homes to more than 19°C unlawful in the event of an energy shortage.

In addition, hot water should not be heated to more than 60 degrees,

You can tell a politician wrote this idiocy...

19C... 66F  Hrmm buy stock in downcoat makers?

Do not heat water over 60C.... Uh, ZERO, ok, next to ZERO hot water tanks go  that high. Commercial hot water tanks for resteraunts do.  So, does this mean no restaurant can now decontaminate their dishes/silverware as their washers are required to do as many commercial washers do not have built in heaters?  Your Very recent domestic dishwasher with built in heater does.   Last 4 hot water tanks I have replaced highest is 55C.  Highest you can even SET your temperature here in the states is 55C for residential H20 tanks.  Obviously the instahots go higher than 60C, but there is no setting to go lower than 60C.  At least all the instahots I have had my hands on(3 different ones).  The whole reason for instahots is to kill bacteria.  This requires ~80C and higher as you lose some Temp due to conduction and you need ~75C for ~5min to kill bacteria. 

How the Hell would they even enforce this...  Looney tunes

[Tom Nolan + 2,443]

https://www.yahoo.com/news/spanish-residents-limiting-heating-boiling-105014125.html

Spanish residents are limiting heating and boiling kettles to shower as the country struggles with reduced Russian gas supply

Beatrice Nolan

Fri, September 9, 2022

• Spanish residents say they are changing their habits amid a national energy crisis.

• Residents say they are limiting their cooking and showering to cope with soaring energy bills.

• One citizen said that he was concerned things were going to get worst in the coming winter.

Spanish residents say they are limiting their heating, cooking, and showering to cope with soaring energy bills in the country.

A 61-year-old journalist, Miguel, told Euronews that national energy prices and inflation had made things increasingly difficult for him. He said the recent economic downturn had accelerated a decline in living standards that started after he took a pay cut a decade earlier.

Miguel said he had taken to turning off his electric boiler, keeping warm with extra layers or residual heat during the winter.

"If I want a shower, I boil the kettle and shower like that," Miguel told the news agency.

"In summer it's no problem and to be honest I've got used to it in winter, too. As for the heating, I live in a flat, so I get the benefit of the heat from the apartments below."

Miguel said he was worried that things were going to get worse in the coming winter.

Energy prices were rising in Spain even before the war in Ukraine, but Russia limiting its gas supply to Europe has kickstarted a substantial cost of living increase for residents.

For six years leading up to 2020, the average Spanish household paid $786 (€780) a year for electricity. Now the average annual bill is $1,382 (€1,371), the Spanish consumer organization OCU told Euronews. In August alone, energy prices soared by 65.8%, according to organization's data.

The government is also trying to preserve energy supplies.

The Spanish government announced at the start of August that air conditioning must be limited to 27 degrees Celsius (80 degrees Fahrenheit) in public buildings, administrative buildings, and shops. The government also restricted heating in these places to a maximum of 19 degrees Celsius (66 degrees Fahrenheit).

Another citizen, Anabel, told Euronews that even her regulated tariff was increasing at an unprecedented rate.

"The cost of gas and electricity is crazy even though I'm meant to have this social discount rate," she said.

"It's because I'm forced to be on the regulated tariff which keeps going up! Everything is going up! The weekly shop is now a third more expensive and then there's petrol."

Food prices are also on the rise in Spain. The OCU estimates that the average food shop is now 15.2% more than it was in August 2021, per Euronews.

Orlando, who lives close to Madrid, said he had changed his eating habits to accommodate the rising cost of food.

"I make a great big pot of beans and chilies that I grow myself and that does me for a few days," he said.

[Tom Nolan + 2,443]

Thu, September 8, 2022 at 7:23 AM

Fracking ban in England lifted in bid to boost UK gas supply

https://www.yahoo.com/news/fracking-ban-england-lifted-bid-110824088.html

[Tom Nolan + 2,443]

https://www.zerohedge.com/commodities/without-energy-no-economy-can-run-german-companies-warn-disaster-electricity-gas-taps

"Without Energy, No Economy Can Run": German Companies Warn Of Disaster As Electricity, Gas Taps Are Turned Off

by Tyler Durden

Friday, Sep 09, 2022 - 01:00 AM

By John Cody of Remix News,

German companies are increasingly unable to access energy supplies on the market, and as energy dries up, the German economy will simply stop running, according to the Association of German Chambers of Industry and Commerce (DIHK).

“More and more companies are telling us that they no longer have a supply contract for electricity or gas at all. The tap is turned off in the truest sense of the word,” DIHK President Peter Adrian told the RND newsroom.

“But without energy, no economy can run.”

In addition, energy prices have reached a level that threatens the existence of many companies. Just this week, German toilet paper company Hakle filed for bankruptcy, with the owners citing unsustainable energy and material costs as the primary factor. Meanwhile, the Wall Street Journal reports that Europe’s steel industry, which requires massive amounts of cheap natural gas to run, is slashing production and facing severe financial headwinds. Other sectors, such as chemical production, agriculture, and automating are all facing unprecedented hurdles as the energy crisis continues to grip Europe.

Cries for help from the once booming German economy are now coming from business leaders, associations, and consumers, with the Federation of German Industries (BDI) also warning of a wave of bankruptcies due to energy cost inflation. A new analysis by the BDI states that this is a major challenge for 58 percent of companies, and 34 percent believe the current crisis represents a matter of survival. Germany is no exception either, with warning from the United Kingdom showing that six in ten manufacturing companies face the risk of closure due to the energy crisis.

Some German companies, attempting to survive in an increasingly challenging environment, are claiming they are looking to move production overseas.

Almost every tenth company has already reduced or even interrupted production, while every fourth company is considering or is already relocating company shares or parts of production and jobs abroad where costs are often cheaper than Germany.

The situation is also coming to a head in the skilled trades.

“In the trades, a wave of insolvencies is rolling towards us because of the energy crisis,” said president of the Central Association of German Crafts, Hans Peter Wollseifer, to the Rheinische Post.

“Every day, we receive emergency calls from companies that are about to stop production because they can no longer pay the enormously increased energy bills.”

Even though the coronavirus pandemic represented a severe threat to many German businesses, the downturn due to the energy crisis is expected to be much worse. Governments and central bankers are also constrained with their policy choices. Unlike the coronavirus crisis, they can no longer throw hundreds of billions in stimulus at the problem, as it would likely greatly exacerbate already high inflation.

However, despite alarm bells, there is some sign that up until now, the German economy has held up despite various economic threats. The number of insolvencies was still stable in June, according to the Halle Institute for Economic Research (IWH).

“Despite the energy crisis, supply chain problems, and the gradual phase-out of Corona aid, the insolvency situation is still pleasingly robust,” said IWH expert Steffen Müller. In June, 709 partnerships and corporations filed for bankruptcy, which was slightly below previous months and actually almost exactly the same number as in June 2021. Müller said he did not expect increased numbers for July or August either.

However, severe headwinds remain on the horizon, including rising interest rates, energy prices, and an increase in the minimum wage in October to €12.

[Tom Nolan + 2,443]

https://finance.yahoo.com/news/small-european-firms-eu-help-164750639.html

 

Jan Strupczewski

Wed, September 7, 2022 at 11:47 AM

Small European firms need EU help to cope with surging energy costs

BRUSSELS, Sept 7 (Reuters) - Surging energy costs are increasing the number of Europe's small and medium sized businesses at risk of collapse and European Union action to cap prices would to help them survive, top officials from the EU's SME association said on Wednesday.

Russia has cut energy supplies to Europe in retaliation for Western sanctions imposed on Moscow over its invasion of Ukraine, sending prices skyrocketing. Russia blames those sanctions for causing the gas supply problems, which it puts down to pipeline faults.

SMEunited President Petri Salminen said retail companies he spoke to in Finland were facing jump in energy bills from 1,000 euros a month to 10,000 euros a month, making it hard for businesses to remain viable.

"This is a fear that is rising among entrepreneurs across Europe. The problem has been there since spring but now it is getting worse," Salminen told Reuters in an interview.

Gerhard Huemer, SMEunited director of economic and fiscal policy, said that normally around 5% of companies went bust every year, now the percentage of firms at risk of collapse was up to 11% in Finland and 16% in Spain, while 24% of companies in Belgium were already making a loss.

"These are companies that may not survive the next period," he said.

Small and medium-sized enterprises (SMEs) represent 99% of all businesses in the 27-nation EU. They employ around 100 million people, or two thirds of all employed and account for 53% of Europe’s GDP.

The European Commission on Wednesday proposed a price cap on Russian gas, a mandatory EU cut in electricity use and a ceiling on the revenue of non-gas power generators to try to soften the impact of the price surge.

"A European solution would be the most efficient to avoid meddling with market mechanisms on the electricity market, but when it comes to subsidising households then national solutions are the best," Salminen said.

"We would encourage all EU member states to use the room available to decrease energy costs," he said.

Huemer said that if Russian gas deliveries stop altogether, energy prices would rise further, making some form of government or EU support a must.

"One idea would be to compensate companies for 80% of their average energy consumption at prices from before the (Ukraine) war and let them pay the rest at market prices as an incentive to cut energy consumption and increase efficiency," he said.

[Tom Nolan + 2,443]

https://oilprice.com/Latest-Energy-News/World-News/Russias-Gas-Giant-Will-See-Revenues-Surge-85-This-Year.html

Russia’s Gas Giant Will See Revenues Surge 85% This Year

By Tsvetana Paraskova - Sep 09, 2022,

[Tom Nolan + 2,443]

Power Shortages Loom Over Europe

By Editorial Dept - Sep 09, 2022, 8:00 AM CDT

Join Our Community

1. Can There Be a UK Oil Renaissance?

- The new UK government of Liz Truss might become one of the most pro-oil ones globally as she announced the opening up of some 130 license blocks in the North Sea as well as the controversial lifting of the ban on hydraulic fracturing in the country.

- The previous government of Boris Johnson suspended licensing activities in 2020 as the UK took on ambitious climate goals, whilst the ban on fracking was introduced in 2019 amid opposition from environmentalists............

https://oilprice.com/Energy/Energy-General/Power-Shortages-Loom-Over-Europe.html

[Tom Nolan + 2,443]

https://oilprice.com/Latest-Energy-News/World-News/How-European-Utilities-Can-Survive-1-Trillion-In-Margin-Calls.html

How European Utilities Can Survive $1 Trillion In Margin Calls

By Irina Slav - Sep 09, 2022, 4:00 AM CDT

European energy utilities might be facing a margin call bill of a trillion euros (~$1 trillion), according to a business consultancy.

The companies, however, are in a strong enough position to survive the call as long as governments lend a hand in the form of state-backed loans, Baringa analysts said, as quoted by the Financial Times.

“A lot of the strain that we’re seeing are companies that need financing for trading but aren’t facing insolvency because actually, if they’re on the producing side of the market, they’re benefiting from high prices in the physical market,” explained Nick Tallantyre, global head of Baringa’s energy and commodities trading division.

He went on to say that once the power that a utility produces is indeed produced, the utility will get enough money to be able to repay any state-backed aid it may have received to cover its margin call right now.

“It’s a short-term cash pinch and governments should issue loans but they should feel confident they will be repaid,” Tallantyre told the Financial Times.

The consultants’ estimate is substantially lower than the margin call estimate Norway’s Equinor released earlier this month. In its conservative scenario, Equinor said, European energy utilities faced a margin call bill of 1.5 trillion euro, equal to virtually the same amount in U.S. dollars.

Several European governments are already providing billions in financial support for energy utilities but against the background of a trillion-euro bill, a few billion will be far from enough.

EU energy ministers are meeting today to discuss ways to handle the energy crisis, with proposals made earlier this week by the European Commission including a cap on electricity prices. This, if approved, could interfere with utilities’ revenues, especially as a cap on revenues for certain utilities is also on the table as a crisis-coping potential measure.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• OPEC+ Cuts Production Despite Resistance From Russia
• 95% Of Production At Nigeria’s Main Oil Hub Is Being Stolen
• China Steps Up LNG Sales To Europe As Prices Soar

https://oilprice.com/Latest-Energy-News/World-News/How-European-Utilities-Can-Survive-1-Trillion-In-Margin-Calls.html

[Tom Nolan + 2,443]

8 minutes ago, Tom Nolan said:

https://oilprice.com/Latest-Energy-News/World-News/How-European-Utilities-Can-Survive-1-Trillion-In-Margin-Calls.html

How European Utilities Can Survive $1 Trillion In Margin Calls

By Irina Slav - Sep 09, 2022, 4:00 AM CDT

European energy utilities might be facing a margin call bill of a trillion euros (~$1 trillion), according to a business consultancy.

The companies, however, are in a strong enough position to survive the call as long as governments lend a hand in the form of state-backed loans, Baringa analysts said, as quoted by the Financial Times.

“A lot of the strain that we’re seeing are companies that need financing for trading but aren’t facing insolvency because actually, if they’re on the producing side of the market, they’re benefiting from high prices in the physical market,” explained Nick Tallantyre, global head of Baringa’s energy and commodities trading division.

He went on to say that once the power that a utility produces is indeed produced, the utility will get enough money to be able to repay any state-backed aid it may have received to cover its margin call right now.

“It’s a short-term cash pinch and governments should issue loans but they should feel confident they will be repaid,” Tallantyre told the Financial Times.

The consultants’ estimate is substantially lower than the margin call estimate Norway’s Equinor released earlier this month. In its conservative scenario, Equinor said, European energy utilities faced a margin call bill of 1.5 trillion euro, equal to virtually the same amount in U.S. dollars.

Several European governments are already providing billions in financial support for energy utilities but against the background of a trillion-euro bill, a few billion will be far from enough.

EU energy ministers are meeting today to discuss ways to handle the energy crisis, with proposals made earlier this week by the European Commission including a cap on electricity prices. This, if approved, could interfere with utilities’ revenues, especially as a cap on revenues for certain utilities is also on the table as a crisis-coping potential measure.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• OPEC+ Cuts Production Despite Resistance From Russia
• 95% Of Production At Nigeria’s Main Oil Hub Is Being Stolen
• China Steps Up LNG Sales To Europe As Prices Soar

https://oilprice.com/Latest-Energy-News/World-News/How-European-Utilities-Can-Survive-1-Trillion-In-Margin-Calls.html

 

[Tom Nolan + 2,443]

https://www.zerohedge.com/markets/ecb-scrutinizes-banks-readiness-possible-tsunami-energy-company-defaults

ECB Scrutinizes Banks' Readiness For Possible Tsunami Of Energy Company Defaults

by Tyler Durden

Friday, Sep 09, 2022 - 08:10 AM

As we detailed in Trillions In "Liquidity Support Is Going To Be Needed" As Swiss, Finns Join Europe's Bailout Brigade and Sweden, Austria Start Bailing Out Energy Companies Triggering Europe's "Minsky Moment," it appears financial armageddon nears for Europe as the European Central Bank calls for a meeting with top bank executives to discuss how to prepare for a potential 'Lehman-style' collapse of energy companies amid worsening energy crisis. 

Conversations between the ECB and lenders are taking place in order to understand the impact of Russian energy giant Gazprom's sudden decision to "completely halt" all Nord Stream 1 transit altogether due to an "oil leak," according to Bloomberg, citing people familiar with the talks. The ECB's letter questions lenders' readiness following a NatGas stoppage that could trigger a wave of energy company bankruptcies. The central bank wants to see how resilient the lenders will be during a period of duress. Lenders will submit their findings to the central bank in mid-September. At the end of the month, bankers will meet with the ECB for follow-up conversations. These interactions between the ECB and lenders are behind closed doors (for now).

The news of NS1 shuttering NatGas flows to Europe has sparked a series of European governments bailing out energy companies as they can no longer afford high NatGas prices and liquidity dries up. 

Sweden followed in Austria and Germany's footsteps, who announced emergency liquidity support to electricity producers after the government said it feared Russia's decision to halt NatGas deliveries to Europe could put its financial system under severe strain. Finland and Switzerland are other countries that have joined the bailout brigade this week. 

The numbers are adding up quickly as European nations are suddenly succumbing to what Zoltan Pozsar dubbed a "supply-chain Minsky moment" for European energy companies. 

It gets better because the crisis, as explained by Norwegian energy giant Equinor ASA, warned that unless there's government intervention to extend liquidity to energy companies, there could be a, get ready for this, margin call upwards of $1.5 trillion.

The physical energy market appears to be functioning, though the derivatives market could be on the cusp of turmoil, and perhaps why the ECB is asking banks to review their readiness for when shit hits the fan: 

Regulators are pushing banks to ensure they have sufficient reserves for loan defaults by identifying their most-exposed clients as well as the effect on companies that aren't directly affected by the fallout from Russia's invasion of Ukraine. Banks will also need to show that they can conduct stress tests and that they're updating their economic assumptions, said the people.

Other areas of concern are thinly-traded energy derivatives and concentrated exposures to energy traders, although only a smaller number of banks are active in those areas, the people said.

The letter to banks also requested institutions to detail how their analysis has been factored into their overall strategy, and what the first and second-round effects would be from a gas stoppage. --Bloomberg 

Earlier this week, Mark Branson, who leads German regulator BaFin, told the German newspaper Handelsblatt that the "system is still robust ... yet in these very dynamic times where you can't exactly understand where the risks are, and the situation changes from week to week, you need first-class risk management, but banks also need well-filled capital and liquidity cushions and a prudent approach to that capital and liquidity situation."

[Tom Nolan + 2,443]

I'll say it again...  This whole economic mess is intentional.  It is deliberate.  It is by design. -TomNolan

https://www.zerohedge.com/markets/biden-administration-has-issued-fewest-oil-and-gas-leases-1940s

Biden Admin Has Issued The Fewest Oil And Gas Leases Since The 1940s

by Tyler Durden

Monday, Sep 12, 2022 - 03:40 PM

While President Biden stands in front of podium after podium assuring the American people he is doing everything within his power to help bring down the costs of energy in the country, the facts tell a different story. 

In fact, it was reported last week that Biden's administration has "leased fewer acres of land for oil and gas drilling on federal lands and waters than any administration in the last 76 years," according to the Daily Caller and Wall Street Journal. 

According to new data from the Department of the Interior, just 126,228 acres of federal land has been issued for drilling during Biden's tenure as President so far. It's the least since President Harry Truman allocated 65,658 acres of land from 1945 to 1946.

However, during that time, the government didn't yet control offshore drilling leases, the report notes. 

American Petroleum Institute Vice President of Upstream Policy Cole Ramsey commented to the Daily Caller: “This is a sobering but unsurprising look at the headwinds to developing essential American energy.”

He continued: “Maintaining a strong federal leasing program is critical for advancing U.S. energy security, strengthening our economy … we urge the Biden administration to take immediate action to hold onshore lease sales and issue a final 5-year program for federal offshore leasing that includes all of the proposed lease sales.”

President Biden has consistently worked to try and pause new drilling leases since taking office - even as oil prices have skyrocketed. Instead of issuing new land for drilling, Biden has been instead depleting the nation's strategic petroleum reserve. 

The DOI estimated this summer that, as a result, the U.S. would be forced to import more crude oil. The Wall Street Journal noted that no President since Nixon has leased less than 4.4 million acres of land during their first year and a half of their term.

[Boat + 1,323]

Think Covid, think less demand. Think using up a few hundred DUCT’s because workers were on lock down. In spite of all that and supply chain shortages American frackers have kept up with US demand. Every couple of months the US sets records in nat gas exports. When Dems run the country, oil and gas seem to thrive. With Obama it was fracking, the energy president. With Biden he out did Obama in green energy and micro chip expansion. Do you know about the 100 billion in chip construction? How about Russian chip expansion. Lol 

[Tom Nolan + 2,443]

https://www.zerohedge.com/news/2022-09-15/scam-europes-privatized-energy-markets

The scam of Europe's privatized energy markets

by akrainer

Thursday, Sep 15, 2022 - 5:34

Something about the European energy crisis doesn't quite add up, and the measures considered by governments to mitigate the crisis add up even less. Ever since Margaret Thatcher's government privatized the British energy grid, we've been sold the fairy tale about how private enterprise and transparent, free markets will automagically make everything great. It is always a variant of the same story about how unscrupulous selfishness by each agent in the system somehow magically works to the best advantage of everyone in society.

I tried to understand the details of this power grid privatization and how the transparent power market would spawn competition and lower prices, but the system is not easy to understand, and it appears to be that way by design. Perhaps we're supposed to accept the narrative but gloss over the details. Former Greek Finance Minister Yanis Varoufakis party disentangled this Gordian knot (you can watch his recent interview on this subject at this link).

The Thatcherite privatization model involved breaking up the grid into three parts:

1. Power generation (the actual power plants producing the electricity),

2. The grid itself, and

3. The retail market (where different companies supply electricity to households and businesses).

Producers, the grid and the power providers are all separate businesses and separate entities. The supposed competitive markets for electricity are achieved by simulation, since there can be no real market for electricity (you can't choose from among multiple cables that can bring electricity to your home/business; there can only be one, connected to a single power grid). 

So, what we have in effect, is a fake market: first, the producers form the wholesale price by auctioning their production; the electronic auctions, held in the Netherlands (where the servers are located) are particularly murky business. You'd expect that if the whole point of the system is to deliver low prices that the lowest bids would win these auctions, but the opposite is true: it is the highest bids that carry the day! The winning bids then define the wholesale prices for all providers. The proof that this system achieves the opposite of what we were sold is that since the system had been privatized, the margin between wholesale and retail prices has trebled!

This year, the system has entirely run amok and various efforts by panicked European governments to bring it under control will pile up new scams on top of the original one. In July, the Greek government instituted a mind numbing scheme where electricity prices are capped - supposedly. But in spite of the price cap, the auctions in the Netherlands will continue to form the wholesale price. Here's a concrete example: the price of power from hydroelectric plants was capped at 85 Euros per megawatt/hour. The Dutch auction raised the price to 700 Euros! Here's how the scheme works from there: the producer of that megawatt/hour receives the 700 euros, but then they have to reimburse the difference between the 85 Euros price cap to the Greek state. 

The government does not use this money to provide relief to businesses and households: instead, the government pays that money to energy retail providers. According to Varoufakis, in almost every market in Europe, the same shareholders that own the producers also own the retailers. So, here we have a complicated three-card monte siphoning off massive profits to the utility companies, but so far zero relief for consumers. The actual relief is yet another scam where the Greek government borrows the money with which it subsidizes people's electricity bills. These measures have been implemented in Greece since 6 July of this year and the European Commission has proposed implementing the same idiotic scheme in all EU markets.

If anything, the European energy crisis has revealed (and not the first time either) that our governments are in fact acting as agents of the oligarchy. If the population in a given society can be persuaded that men can get pregnant, they can also be persuaded that auctions that blow up wholesale prices 9-fold is the most efficient way to keep prices low, and that such transparent markets work to the best advantage of everyone in the system. But allowing one group of vested interests to plunder the society will have widespread adverse effects: high energy prices will cause large segments of the European economy to shut down or, at the very least will render their products uncompetitive in world markets. In effect, we have the situation where a parasite has been allowed to kill the host. The unscrupulous selfishness of each agent in the system will not produce the best outcome for all; it might in fact collapse the system. But explain that to the people who think men can get pregnant.

 

Alex Krainer - @NakedHedgie has worked as a market analyst, researcher, trader and hedge fund manager for over 25 years. He is the creator of I-System Trend Following, publisher of TrendCompass reports and contributing editor at ZeroHedge. His views and opinions are not always for polite society but they are always expressed in sincere pursuit of true knowledge and clear understanding of stuff that matters.

[Tom Nolan + 2,443]

https://www.zerohedge.com/energy/energy-markets-next-crisis-oil-tanker-shortages

https://oilprice.com/Energy/Energy-General/The-Energy-Markets-Next-Crisis-Oil-Tanker-Shortages.html

The Energy Market’s Next Crisis: Oil Tanker Shortages

By Irina Slav - Sep 14, 2022, 7:00 PM CDT

• As the EU ban on Russian oil and fuels looms, demand for tankers - particularly ice tankers - has been climbing.
• In early August, the average profit for an oil product tanker jumped to the highest level since 1997, and it is likely that profits have increased since then.
• Fuel markets worldwide are also tight which, combined with soaring tanker prices, will only add to inflation fears.

The Energy Market's Next Crisis: Oil Tanker Shortages

by Tyler Durden

Thursday, Sep 15, 2022 - 05:55 AM

Authored by Irina Slav via OilPrice.com,

• As the EU ban on Russian oil and fuels looms, demand for tankers - particularly ice tankers - has been climbing.

• In early August, the average profit for an oil product tanker jumped to the highest level since 1997, and it is likely that profits have increased since then.

• Fuel markets worldwide are also tight which, combined with soaring tanker prices, will only add to inflation fears.

In the new era of energy shortages, one aspect of the situation has tended to get overlooked: the transport of energy.

 

Demand for tankers has been on the rise since the European Union slapped sanctions on Russia in the spring, and this trend is only going to intensify in the coming months as the EU embargo on Russian oil and fuels enters into effect.

Bloomberg reported this week that shipping companies were scrambling to get their hands on as many ice-class tankers as they could ahead of the embargo, which comes into effect in early December for crude oil and two months later for fuels.

The vessels will be necessary to continue moving Russian oil and fuels in non-European directions, the report noted, as the EU would no longer be able to buy them, even though European buyers are currently stocking up on Russian oil and fuels in anticipation of the embargo.

The war in Ukraine and the EU’s response to it have already livened up the global tanker market considerably - and with it, freight costs for hydrocarbons.

Since the February 24 invasion, demand for tankers has spiked and is likely to remain robust in the observable future, not least because supply is quite limited, Svelland Capital’s Tor Svelland told CNBC in August.

Few tankers have been built in the past few years, and since this is not something the industry can reverse overnight, supply will probably remain tight, pushing the cost of transporting oil and fuels higher.

Indeed, in early August, Bloomberg again reported that the global tanker market was seeing the strongest demand in more than two decades. Citing data from Clarkson Research Services, the report said the average profit for an oil product tanker in the two weeks to August 8 had jumped to $400,000 - the highest since 1997.

By now, this figure is likely even higher, and it will continue up as demand for fuels outpaces supply in the coming months. The fuel market is already tight, but with the entry into effect of the EU fuel embargo against Russia, it is only going to become tighter, further intensifying competition for a limited fleet of fuel tankers.

“The EU ban on Russian oil products from February 2023 will spark a recalibration of the oil trade ecosystem,” Danish shipping company Torm said in a statement quoted by Bloomberg.

“Some of this trade recalibration has already started.”

The recalibration will involve not only more tankers to carry Russian fuel and crude to non-European destinations but also more tankers to supply Europe with oil and fuel from non-Russian locations, including, very likely, places like China and India that process Russian crude into fuels they then export to, among others, Europe.

On top of this expected tightness of the tanker market, which will have a palpable effect on fuel prices, the global fuel market is also tight and likely to remain so in the coming years.

According to a Reuters report citing S&P research, the reason is a record slump in global refining capacity, by 3.8 million barrels daily between March 2020 and July 2022, according to a Reuters report citing S&P research.

While refining capacity shrunk, fuel demand increased by 5.6 million bpd, creating a sizeable gap with supply based on refining capacity. New refining capacity of some 2 million bpd should come on stream by the end of next year unless delays occur, which is quite likely, according to the S&P research.

Further capacity increases are much less likely as refiners are suspicious that the energy transition push will turn potential new refineries into stranded assets before too long.

In this situation, the future does not look good for fuel affordability or wide availability. As the EU oil and fuel embargo enters into effect, Russia will turn to new clients in Asia, Africa, and, according to Bloomberg, Latin America. The EU itself will need to source its fuels from places like the Middle East, the U.S., and, as noted, India and China.

Because of the tight supply situation, which would certainly add a premium to fuel prices, it is not inconceivable that countries importing fuels from Russia, such as the two Asian giants and Saudi Arabia, could choose to do what China does with Russian LNG: resell it to Europe at a premium.

Meanwhile, the U.S. is experiencing its own constraints with fuel inventories, notably middle distillate inventories, diesel and jet fuel. What this means for Europe is that the help it can expect from the U.S. in the form of higher fuel exports would be limited: there is simply not enough diesel fuel to export. This could add a further premium to fuel prices this winter.

Tankers and fuels between them are about to make fuel costlier this winter as the world tries to fight inflation. Tankers and fuels won’t help that fight.

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Energy-General/US-Oil-And-Gas-Producers-Cant-Save-Europe-This-Winter.html

U.S. Oil And Gas Producers Can’t Save Europe This Winter

By Tsvetana Paraskova - Sep 15, 2022, 6:25 AM CDT

• U.S. oil and gas producers cannot significantly ramp up production in the short term, a fact that Europe must come to terms with.
• The global oil market is forecast to lose 2.4 million bpd when the EU embargo on Russian crude kicks in.
• While the EIA has projected an uptick in U.S. oil production, a falling rig count in the Permian Basin is a worrying sign.

Join Our Community

U.S. oil and gas producers cannot ramp up current production levels too much in the short term to offset an expected drop in Russian oil supply when the EU embargo enters into force later this year, according to American oil executives.

“It’s not like the US can pump a bunch more. Our production is what it is,” Wil VanLoh, head of private equity group Quantum Energy Partners, which invests in shale assets, has told the Financial Times.

There isn’t any bailout for Europe coming from U.S. producers, “Not on the oil side, not on the gas side,” VanLoh added.

The global oil market will have to prepare itself for a loss of 2.4 million bpd supply when the EU embargo kicks in, the International Energy Agency (IEA) said in its Oil Market Report earlier this week. An additional 1 million bpd of products and 1.4 million bpd of crude will have to find new homes, which could result in deeper declines in Russian oil exports and production, the Paris-based agency added.

Current forecasts of U.S. crude oil production growth may have to be significantly revised as the recent slide in active drilling rigs in the top shale basin, the Permian, suggests that output may disappoint due to supply chain constraints and cost inflation in the double digits.

The rig count in the Permian Basin dropped by 2 to 340 last week, as the number of total active drilling rigs in the United States dropped by 1, according to new data from Baker Hughes published on Friday.

At the same time, the Energy Information Administration said in its latest Drilling Productivity Report this week that crude oil production in the Permian is set to hit a record high next month, adding 66,000 bpd from September to reach 5.413 million bpd in October.

Yet not everyone is so optimistic: Pioneer Natural Resources CEO Scott Sheffield said last week that U.S. oil production growth would likely disappoint both this year and next.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• UK Puts A Cap On Household Energy Bills
• China Could Ease Europe’s Diesel Shortage
• Another European Steel Plant Scales Back Amid Ongoing Energy Crisis

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Energy-General/IEA-Russian-Crude-Ban-Will-Take-24-Million-Bpd-Off-The-Market.html

IEA: Russian Crude Ban Will Take 2.4 Million Bpd Off The Market

By Charles Kennedy - Sep 14, 2022, 4:00 PM CDT

• IEA: EU ban on Russian seaborne crude may take 2.4 million bpd off the market.
• IEA: Total Russian oil production will decline to 9.5 million bpd.
• European countries are importing more Russian crude ahead of the ban

Join Our Community

As the European Union prepares to implement a ban on Russian seaborne crude in December, the market will have to prepare itself for a loss of 2.4 million bpd, according to the International Energy Agency (IEA). 

The ban on Russian crude imports by sea will take 1.4 million bpd of oil off the market, along with 1 million bpd of petroleum products. 

This is in line with the ban on Russian seaborne crude that goes into effect on December 5th, and the embargo on petroleum products, which goes into effect on February 5, 2023.

In addition, due to the pending EU ban on maritime services, the IEA expects forced reallocations from countries that are not on board with the G7’s own proposed price cap on Russian oil. 

The G7 is reportedly considering sanctions on oil importers who refuse to comply with the group’s proposed price cap on Russian oil, which has prompted threats from Mosocw to withhold oil from the market. 

Furthermore, by February next year, the IEA predicts that total Russian oil production will decline to 9.5 million bpd, which represents a 1.9 million bpd plunge year-on-year.

This comes after the IEA said in August that Western sanctions were not significantly impacting Russian oil output, as rerouting of crude to Asia had served as a stop-gap measure. The new Russian barrels will also have to find new buyers in Asia to mitigate any negative effects on Russian revenues. 

The oil market remains highly volatile as it attempts to determine whether fears of declining demand–particularly coming out of China’s COVID lockdowns–or tight supply will rule fundamentals. The IEA highlighted decelerating growth in global oil demand in its latest monthly report, but also noted that due to significant gas-to-oil switching, total demand growth was actually only slightly lower. 

In the meantime, heading into the ban, Europe continues to import large volumes of Russian crude, with Bloomberg recording 1 million bpd of imports in the week ending September 2. While that figure is higher than August, it is also lower than June. 

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:

• Goldman Warns EU Energy Price Freeze Could Backfire
• Analysts May Have Overhyped America’s Largest Oil Basin
• Xi Set For Face Time With Putin In “Very Important” Meeting

[Tom Nolan + 2,443]

https://www.zerohedge.com/commodities/eu-natgas-prices-jump-week-plan-avert-energy-crisis-underwhelms

EU NatGas Prices Jump As Plan To "Fix" Energy Crisis Underwhelms

by Tyler Durden

Thursday, Sep 15, 2022 - 12:10 PM

European nat gas prices jumped this week as the market's initial euphoria and apparent confidence that Europe's "emergency fix" to contain the energy crisis is big on jawboning and weak on... well... actually "fixing" the crisis.

EU benchmark futures have been on a tear after bottoming around 182 euros a megawatt-hour. Since Tuesday, prices have jumped 32% to 242 euros as traders aren't convinced last Friday's meeting among 27 EU energy ministers is enough to starve off a crisis in the months ahead. However, prices faded in the late Thursday session. 

We reported on Tuesday, right around the time EU NatGas bottomed, that the only thing the energy ministers "agreed on was implementing a ceiling on the revenues of power utilities that do not use NatGas to generate power."

OilPrice's Irina Slav pointed out there was more disagreement than agreements among the energy ministers. She explained: 

"What they did not agree on was everything else the Commission suggested last week, including a price cap on Russian gas, a cap on final energy prices, and a direct intervention in EU electricity markets. It's hard to get 27 countries to agree on so many things without any compromise. This is why the EU's survival plans for the winter may never work as intended."

The EU's 140 billion euros plan also includes bailouts for energy companies and provides payment assistance to households and businesses -- but does very little on how to address immediate new sources of NatGas in an environment that is tighter than ever as Nord Stream 1's supplies from Russia to Europe have fallen to zero. 

"The fact that they've gone quiet on the gas price cap is taking some risk out of the market," said James Huckstepp, head of EMEA gas analytics at S&P Global Commodity Insights. "And the plans to subsidize end-users is bringing demand destruction assumptions into question."

Less than a week after the meeting, the German government warned Thursday that the threat of energy rationing in Europe is still increasing, and there will likely be NatGas shortages. 

"I expect waves: there are gas shortages, they go, they come back, they appear here, sometimes there, possibly throughout Germany," Klaus Mueller, president of the country's energy regulator, said. "If we get a very cold winter, we have a problem."

Bloomberg pointed out that all eyes will be on the EU's NatGas storage levels. The good news: storage is about 84%, above a five-year average, and Germany is at 89%, according to Gas Infrastructure Europe. 

Weather will be a significant factor as Central Europe's average temperatures have been sliding since September, indicating cooler temperatures could increase heating demand by the end of the month.

"Europe will start seeing some heating demand picking up now," said Niek van Kouteren, a senior trader at Dutch energy company PZEM NV. "If we do see a prolonged colder period though, that will really start impacting prices, and you might already have to start withdrawing some storages."

Without drastically increasing new NatGas sources, EU leaders will have to continue enforcing mandatory electricity curbs on peak power demand periods. 

EU NatGas storage levels and weather conditions will be closely watched. A major problem will materialize if the continent has a freezing and prolonged winter. 

Europeans probably wish they had more global warming to avert an energy crisis.

[Blackbag99 + 20]

On 8/29/2022 at 1:20 PM, Tom Nolan said:

For many, many months and well before Ukraine-Russia, I have been saying that Europe is DELIBERATELY being destroyed.  This is not accidental.  It is an intentional controlled demolition of Europe's economy in order to further enslave its populace. --TomNolan

https://oilprice.com/Energy/Energy-General/Europes-Energy-Crisis-Has-Ended-Its-Era-Of-Abundance.html

Europe’s Energy Crisis Has Ended Its Era Of Abundance

By Irina Slav - Aug 29, 2022, 7:00 AM CDT

• In a somber speech last week, French President Emmanuel Macron warned that France has come to the end of its “era of abundance” and said hard times are ahead.
• The Prime Minister of Belgium has said that Europe will have five difficult winters in the coming years due to an energy shortage with no short-term solution.
• While European gas storage is filling up ahead of schedule and it may be able to survive the coming winter, the suffering is far from over for the continent.

Join Our Community

European gas prices broke yet another record last week, driven by the anticipation of production outages in Norway, lower nuclear energy production in France, and, of course, Gazprom's planned shutdown of Nord Stream 1 for three days beginning on Wednesday.

Benchmark prices in the Netherlands hit close to 316 euros per megawatt-hour earlier this week, which is equivalent to about $315 per MWh. In addition to the Nord Stream news, planned gas field maintenance in Norway also contributed to the latest price spike, as did news of planned outages at export terminals.

Citi analysts this week forecast UK inflation could reach 18.6 percent by January as energy costs continue up inexorably. These costs prompted several energy executives this week to warn of social unrest in the country. 

French President Emmanuel Macron, meanwhile, dropped a bomb in his first speech after the government's summer break, saying France has come to the end of the "era of abundance," warning that hard times were ahead and blaming them on climate change and Russian President Vladimir Putin.

"What we are currently living through is a kind of major tipping point or a great upheaval … we are living the end of what could have seemed an era of abundance … the end of the abundance of products of technologies that seemed always available … the end of the abundance of land and materials including water," Macron said, as quoted by The Guardian this week.

France has been suffering greatly reduced nuclear output, on which the country depends for most of its energy consumption and which it also exports. With about half of its reactors down, France has resorted to electricity imports from Germany. And then there have been droughts, which Macron referenced in his speech.

Droughts have indeed taken an additional toll on Europe, affecting hydropower production in large producers such as France and Norway and consequently fueling the price rise in fossil fuels utilities have to lean back on in times of lower hydropower production.

In Germany, droughts interfered with oil and coal supply to utilities as the level of the Rhine remained too low for many vessels to reach the storage sites and power plants where the coal and oil will be needed this autumn and winter.

"Due to very reduced domestic shipping, accumulated coal stocks could quickly fall," a document produced by the German economy ministry and cited by Reuters, said. "Additional storage sites which have been and are being procured in southern Germany will probably not be filled by winter," it warned.

Meanwhile, Chancellor Scholz returned from Canada without a commitment of more LNG supply as Ottawa demonstrated it would much rather partner with Germany on hydrogen, which is touted as the cleaner alternative to natural gas that will dominate the market after the transition.

In fairness, even if Canada had made a commitment to supply Germany with LNG, it would not have come soon enough to secure supply for this winter. Yet it would have alleviated fears for the future as Belgium's Prime Minister warned Europe was looking at not one but rather five to ten difficult winters ahead.

"The key is energy, energy, energy. There is an energy crisis, let's be honest about that, electricity prices are 10 times pre-COVID levels, that is a shock to the system," Thomas Costerg, a senior analyst at Pictet Wealth Management, told Reuters this week.

Since the start of the year, gas prices have surged by close to 30 percent, with the August gain alone at 40 percent. This has, of course, pushed electricity prices higher, too, with national day-ahead averages breaking all-time records and adding to mounting pressure on governments to find a way to avert the worse of the crisis.

Expectations are not very high, however. Recession is a word that is being used increasingly frequently with regard to the immediate future of Europe as energy prices continue to fuel inflation that seems to be getting less and less manageable.

The only good news so far is that European gas storage is filling up ahead of schedule, so there will be some gas in case Gazprom decides to leave Nord Stream 1 shut. According to analysts, however, this will only postpone the worst of the crisis rather than avert it.

Morgan Stanley delivered that last warning, saying that "If Nord Stream 1 flows fall to zero, this winter's inventories should also still be manageable," but adding that “if those flows don't recover, the accumulating loss next year would then create an exceptionally tight winter 2023/24," in a note cited by MarketWatch.

It does look like the age of abundance that much of Europe had enjoyed for a couple of generations is coming to an end. 

In his speech, Macron said that he would prioritize the energy transition this autumn instead of finding ways to make energy prices more manageable for the millions of Frenchmen struggling to pay their bills. If those bills keep climbing, then the UK might not be the only country facing civil unrest.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• Europe’s $280 Billion Support Package Could Make Energy Crisis Worse
• TotalEnergies Denies Accusations That It Supplied Fuel To Russian Army
• Canada Set To Miss Out On A Massive LNG Opportunity

What energy crisis?

It has more gas than it had in 2020. When they shut down 20% of the economy!

No crisis, Texas is more likely to have more blackouts than any European economy. Because its infrastructure is 40 years out of date, like much of the US!

[Tom Nolan + 2,443]

https://finance.yahoo.com/news/germany-takes-control-over-rosneft-050251033.html

Germany Seizes Assets of Russian Oil Giant Rosneft

(Bloomberg) -- Germany seized the local unit of Russian oil major Rosneft PJSC as Berlin moves to take sweeping control of its energy industry, secure supplies and sever decades of deep dependence on Moscow for fuel.

Alongside its move for the Rosneft unit, Chancellor Olaf Scholz’s administration is in advanced talks to take over Uniper SE and two other major gas importers, Bloomberg reported on Thursday. Europe’s largest economy is pressing ahead with an historic overhaul of the energy system to prevent shortages this winter.

 

A decision on the next moves could come within days. The need for action is urgent with Uniper losing 100 million euros ($99.7 million) a day as it tries to replace Russian gas to maintain deliveries to local utilities and manufacturers.

“Over the next few months, we’ll have to continue to preserve critical infrastructure in order to achieve energy independence,” said Verena Hubertz, a leading lawmaker for Scholz’s Social Democrats. “Further measures will follow.”

Read more: Germany Working on Historic Takeover of Three Gas Companies

Germany has been particularly hard hit by the economic standoff with the Kremlin because of its reliance on Russian gas and oil. Sanctions and Moscow’s efforts to punish Europe economically for its support of Ukraine risk tipping Germany into recession. Its energy sector is reeling from the squeeze on supplies, and government bailouts are quickly being dwarfed by the scale of the crisis.

On Friday, the government announced it was taking over Rosneft’s German unit, including stakes in three oil refineries. The move also affects holdings in France, Italy and Austria, highlighting how interconnected Europe’s energy system is.

Scholz’s administration pulled the trigger on the seizure after months of talks. Because of sanctions related to the war in Ukraine, Germany is preparing to stop buying Russian crude by the end of the year and needed to make sure Kremlin involvement in its key refineries didn’t become a threat to supplies.

Read more: Germany’s Rosneft Seizure Kicks Off Test of Oil Infrastructure

The swoop for the Rosneft unit is an escalation of the economic standoff with Russia as Berlin unwinds decades of tight collaboration. One of the most critical assets in the deal is the Schwedt refinery near the Polish border, which supplies Berlin and much of eastern Germany with fuel.

The facility has, until now, got its crude via the Druzhba pipeline from Russia. As long as the plant remained significantly in Russian hands, it was hard to see how the facility would keep going.

The German Economy Ministry said the move “counteracts the impending threat to the security of energy supply and lays an important foundation for the preservation and future of the Schwedt location.”

The refinery is now preparing for potential retaliation from Russia, such as short-term restrictions in the crude supplied via the Cold War-era Druzhba link, the operator PCK Raffinerie GmbH said in a statement.

Grid regulator BNetzA will become trustee of Rosneft Deutschland GmbH and RN Refining & Marketing GmbH, which account for around 12% of Germany’s oil-processing capacity, through stakes in refineries in Schwedt, Karlsruhe and Vohburg. The process is similar to the takeover of Gazprom Germania earlier this year.

Germany has the power to takeover the administration of an energy company by issuing an order through the German Energy Safety Act.

The trusteeship runs until March 15, 2023, but could be renewed. Rosneft can challenge the order in German courts.

Scholz and Economy Minister Robert Habeck will present more details on the nationalization plan at a news conference in Berlin later Friday. The government has declined to comment on any plans to nationalize the gas companies.

[Tom Nolan + 2,443]

https://oilprice.com/Latest-Energy-News/World-News/Angry-Customers-Demand-Explanation-As-German-Energy-Bills-Soar.html

Angry Customers Demand Explanation As German Energy Bills Soar

By Tsvetana Paraskova - Sep 16, 2022, 5:00 AM CDT

Utilities in Germany have had to handle a surge in customer service calls in recent weeks from clients angry or desperate about their sky-rocketing energy bills, Reuters reports.

The biggest utility, E.ON, has ramped up its capacity to handle calls from consumers who are shocked to find just how much their energy bills have surged in recent months.

Gas prices in Europe are very high and power prices in many countries, including Germany, have hit record levels this summer after Russia choked pipeline gas supply to Europe and shut down indefinitely the key gas export pipeline to Germany, Nord Stream, at the beginning of this month.

“Some become aggressive out of frustration, others are in tears and need psychological support,” Ingbert Liebing, head of local utilities organization VKU, told Reuters, commenting on the spike in customer calls to utilities’ service centers.

Apart from already high energy bills, German customers will have a surcharge as of October, as part of a government plan to implement a so-called gas levy on consumers in order to help struggling energy firms.

Germany has recently announced it would impose a gas levy on consumers from October 1 through March 2024 as it aims to help energy providers and importers of natural gas, which are struggling with low Russian gas supply and very expensive alternatives to Russian gas. The new natural gas tax is set to cost German families, who will have to foot the bill for the tax, an extra $500 a year. 

Meanwhile, the German government is in talks with the biggest German importer of natural gas, Uniper, to potentially lift its 30% stake in the company to majority participation or to nationalize the firm. The German government agreed in July on a $15 billion bailout package to help the energy giant, which has been reeling from reduced Russian gas supply and soaring prices of non-Russian gas. Under the package, the German government bought a 30% stake in Uniper and made available further capital to help the company.

“The deteriorating operating environment and Uniper’s financial situation have to be taken into account while Fortum, the German government and Uniper continue their discussions on a long-term solution for Uniper,” Uniper’s parent firm, Finland-based Fortum, said in a statement earlier this week.   

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• UK Puts A Cap On Household Energy Bills
• China Could Ease Europe’s Diesel Shortage
• Another European Steel Plant Scales Back Amid Ongoing Energy Crisis

[Tom Nolan + 2,443]

https://oilprice.com/Latest-Energy-News/World-News/Germany-Seizes-Control-Of-Russian-Owned-Refinery.html

Germany Seizes Control Of Russian-Owned Refinery

By Irina Slav - Sep 16, 2022, 2:30 AM CDT