Energy Hostages — Russia is holding Europe hostage.
Yesterday, European nations reached an agreement to chop down their energy use in the next eight months, with the possibility of a cutoff from Russian NatGas on the horizon.
The overall chop is a 15% voluntary reduction by next month across the board, but there are other stipulations for some nations whose grids are built “Texas style,” i.e., not completely connected to the rest of the European grid.
Analysts think that this 15% reduction should get the Eurozone to the spring without blackouts or a deep recession.
While some of us have logically asked, “why can’t they just go back to using coal?” that is simply not possible at this point in the game.
Reopening a shuttered coal-fired facility to generate power for the public’s consumption is not an overnight affair. It requires an infrastructure project and couldn’t happen quickly enough to make a significant difference.
The government has not really clued consumers in Europe into how much they should plan to throttle their own energy usage.
It might be too soon to really talk about last week’s heat wave, but most healthy people don’t sweat to death when it’s hot – they are just miserable. However, in the winter, people can actually freeze to death, and that is a legitimate risk in the coming months.
The government wants to leave residential power consumption off the table, but I’m not certain that industrial power consumption cuts alone will be enough to solve this problem.
After hearing that Russia is chopping Nord Stream energy flow from a mere 40% of pipeline capacity down to 20%, it’s pretty likely that problems are only going to get worse.
It was easy to jump onboard a combined western anti-Putin platform when the war in Ukraine kicked off and when many officials expected a “short and sweet minor incursion” into Ukrainian sovereignty. Things look way different five months later.
Europe is already in inflation hell, and its economy is slowing. Further energy issues could be a catalyst for another geopolitical crisis and/or catastrophe, or they could be a concrete cinder block around Europe’s ankle as these disparate Eurozone economies attempt to stay afloat during a coming recession.
Putin isn’t a healthy guy. There are even rumors that he used a body double on a recent trip abroad. He is a wildcard with unpredictable behavior.
I wouldn’t be shocked if things got worse before they got better.
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