The self induced energy crisis in Europe and US

 Power Line:

The Washington Post reported yesterday that someone woke up Slow Joe:

White House alarm rises over Europe as Putin threatens energy supply

White House officials are growing increasingly alarmed about Europe’s energy crisis and Russian President Vladimir Putin’s threats to force a bleak winter on the continent.

Seeking to punish Russia for the invasion of Ukraine and force a retreat, Western allies have moved to set a cap on what buyers pay for Russian oil. Putin last week said Russia would retaliate by cutting off gas and oil shipments, which could devastate Europe’s economy and hurt the United States by sending global energy prices soaring.

Of course this last sentence really ought to read, “. . .which would devastate Europe’s economy and Democratic Party prospects in the mid-term elections.”

In response to my post over the weekend about how the European energy situation is much more serious than people know, a reader writes in:

One of my kids just returned from the GasTech 2022 conference, ironically held in Milan this year.  He is an engineer with a LNG shipping/regas firm. It was nothing like he or the execs from his firm had ever seen. Those same “confident” energy ministry staff from Euro governments are privately in a full fledged panic trying to secure reliable supplies.

One key problem is the lack of port delivery facilities for liquid gas product. Not quick to build—if ya ain’t got one now, won’t for 3-5 years. Normally you solve for this by using FSRU ships that are semi-permanently moored off shore and feed directly to distribution facilities.  But there are only 4 dozen of these in the world and most are already contracted to places like Bangladesh. The industry is trying spin up some regas units built on unused exploration platforms—then just tow them into place. The Korean yards that build most of the tankers are fully booked three years out—so hard to rapidly expand the tanker fleets—and a lot of ships are aging out.

In one meeting a Pakistani speaker almost started crying describing the economic dislocation skyrocketing prices are causing.  He was in a meeting with the Uniper execs…and as you wrote, they are on the brink of shutting down absent massive cash infusion.  Looked like hunted animals.  Unless Vlad turns the spigot back on can’t see a happy ending.  And my understanding with facilities like aluminum smelters is you can’t flip them “on/off”.  Have to run continuously—millions and months to deslag, clean and restart.

The Wall Street Journal confirmed some of this yesterday as well:

Europe’s energy crisis has left few businesses untouched, from steel and aluminum to cars, glass, ceramics, sugar and toilet-paper makers. Some industries, such as the energy-intensive metals sector, are shutting factories that analysts and executives say might never reopen, imperiling thousands of jobs.

Keep in mind that when Europe imposed sanctions on Russia after the outbreak of Russia’s invasion of Ukraine, oil and gas were largely exempted because of Europe’s foolish dependence on Russia for oil and gas. It is Putin who is putting the screws to Europe, plainly hoping that imposing serious pain on Europe will cause the EU to drop sanctions or, more importantly, abandon Ukraine and stop supplying weapons. With the war now going badly for Putin, he may well double-down on this strategy.

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Both Europe and the US have foolishly failed to drill and frack their way out of this crisis.  That failure has mostly benefitted Russia.  When Biden reduced US drilling that drove up the price of oil and gas and Russia was the primary beneficiary of this policy.  The adherence to the Big Green agenda has resulted in one of the biggest strategic blunders of all time.  It is hurting energy consumers in the US and Europe.

See, also:

‘Sue And Settle’: Biden Admin Agrees To Block Oil And Gas Drilling After Settling With Eco Activists