Tuesday, April 26, 2022

Gas: Italy shifts to Algeria for gas procurement

Eager to divest itself von Russian dependance on natural gas, Italy has switched in a precipitous move to Algeria as a supplier just days after the russian invasion into Ukraine. Italy and especially its energy giant ENI have deep and decade-old ties to Algeria. Even major investements by ENI and acquisitions of BP shares on oil fields are under discussion, Le Monde

Algeria is showing a diplomatic upturn with Italy which takes on a particular meaning as Europe is prospecting for alternatives to Russian gas, war in Ukraine obliges. The recent ballets of visits by Italian officials to Algiers, where the red carpet is rolled out at the energy giant Ente Nazionale Idrocarburi (ENI) – already historically well treated – testify to a most cordial atmosphere. Italy had become, in recent years, increasingly dependent on Russian energy supplies (40% of its gas imports, or about 30 billion cubic meters [m3]). It is now more than ever eyeing Algerian gas, while it is imperative for it to diversify its purchases abroad, particularly in the Mediterranean.

The overall economic relationship between the two countries has certainly always been healthy. Italy is Algeria's third supplier (behind China and France) and its first customer (ahead of France and Spain). It is also the first foreign investor, a status due to the weight that ENI represents on Algerian soil. History is a big part of it. The tutelary figure of the historic leader of the company, Enrico Mattei (1906-1962), a Christian Democrat politician who was a great promoter of independent Algeria (who died in 1962 after a mysterious plane crash), has always acted bridge between the two countries.

“ENI is a company considered to be a friend of Algeria, a friend of the Algerian revolution at the time, notes Akram Kharief, Algerian security expert and founder of the Menadefense site. It is very difficult to compete with her. In recent weeks, the glorification in the Algerian press of this memory has reached unprecedented levels. "The esteem for Italy is felt among the people of the people", could we read, on March 30, in an editorial of the official daily El Moudjahid.

The staging, in Algiers, of friendship with Italy does not date from the war in Ukraine. The distinguished welcome reserved in the Algerian capital for the Italian President of the Republic, Sergio Mattarella, during a visit in November 2021, had already sent a first message in the midst of the crisis between Algiers and Paris. The recent Algerian-Spanish turbulence on the Western Sahara issue – following concessions made by Madrid to Rabat – has added to the ambient Italophilia in Algeria. The remarks of the boss of the Algerian public company Sonatrach, Toufik Hakkar, on April 1, evoking the possibility of "recalculating" the price of gas sold to the Spaniards, announce a probable changeover in the long term of part of the supplies from Spain to Italy.

This is fitting, at a time of Rome's strategic shift vis-à-vis Russian gas dictated by urgency. As usual, Italian diplomacy negotiated it in a few hours, with a mixture of agility and pragmatism. Monday, February 28, barely four days after the start of the Russian offensive in Ukraine, the Italian Foreign Minister, Luigi Di Maio, was in Algiers, accompanied in particular by the managing director of the energy giant ENI, Claudio Descalzi, to to assess the possibility of increasing gas imports. In energy matters, Italian diplomacy and ENI are used to moving forward together.

Exploitation of new deposits

In the Algerian case, the calculation is simple. Algeria is the country's second largest supplier (21 billion m³), ​​and the Transmed gas pipeline transporting gas to Sicily – also called the Enrico Mattei gas pipeline – is not operating at full capacity (its capacity is 30 billion m³ per year) . What hope, in the short and medium term, additional deliveries.

The Italian minister's trip to Algiers was only the start of a tour centered on energy issues, which took the head of Italian diplomacy, in March, to Africa, the Arabo-Persian Gulf and Azerbaijan. But Algeria is considered, within Italian diplomacy, with particular attention.

So Claudio Descalzi was back in Algeria on April 3 to meet once again the CEO of the Algerian public energy giant, Sonatrach, ENI's historic partner, to discuss the increases in deliveries in the short term and, at a further afield, the exploitation of new deposits. In particular, it is a question of “accelerating” the implementation of joint projects in the region of Berkine Sud, on the border with Tunisia. According to the Algerian press, ENI is also negotiating the acquisition of assets from British Petroleum (BP) in two major gas projects in In Saleh (Centre) and In Amenas (East). According to unconfirmed information, Sonatrach is also discussing the acquisition of ENI assets in Russia.

Be that as it may, the prospect for Algeria to deliver significant quantities of gas to Italy is long term. In the immediate term, its production and transport potential is limited. "Algeria's ability to offset Russian gas for Europeans is questionable," says Olivier Appert, energy and climate center adviser at the French Institute for International Relations (IFRI). Faced with the aging of its infrastructure and the flight of its domestic consumption, Algeria has in fact suffered from a continuous decline in its gas exports, which have fallen from 64 billion m3 in 2005 to 41 billion in 2020. substantial investments to reverse the curve. ENI and the Italians are in the running.

Monday, March 28, 2022

US: four russian hackers indicted

Four russian hackers with links to russian intelligence service FSB are indicted for the failed attempts to infiltrate energy companies, SPON:

The US government on Thursday published its indictments against four Russian citizens, whom it accuses of having hacked numerous energy companies around the world on behalf of the secret service FSB and the Ministry of Defense.

The charges relate to cases that date back a while. In the US, there are sealed, ready-made indictments that can be made public at any time. In this case, they are from June and August of the previous year. Now the US authorities thought the time had come to make them public.

These are two separate charges, but they have one thing in common: the hacking activities they describe are sophisticated and have been carried out over a long period of time. They are not aimed at short-term effects, but consist of targeted and well-prepared attacks in which malware is intended to be smuggled into the systems of companies in the critical infrastructure - in order to manipulate their operation on a »Day X« chosen by the attacker or even completely shut it down sabotage.

It is this type of cyber attack that is of greatest concern to security agencies around the world. An infiltrated energy infrastructure, which in extreme cases could be switched off by malicious actors, is considered a nightmare scenario.

Thursday, March 24, 2022

Europe: Anti-fracking NGO's received russian money

Investigations by different media suggest that european environmental NGO's opposed to fracking received money injections from russian sources, WELT:

The interests of western climate protectionists and the Russian dictator Vladimir Putin coincide, albeit for very different reasons: slowing down the promotion of fossil fuels in western countries is their common goal. For the activists, this is a stage on the way to a CO₂-free industrial society, for Putin, whose country benefits enormously from the international oil and gas business, it is an important trump card.

For years there have been indications that Moscow is supporting activists in the US and Europe in their fight against fossil fuels in order to be able to sell Russian gas and oil better. In the mid-2000s, the Kremlin decided to fill what it called a “value vacuum”: using so-called “soft power” to place its own views and interests in other countries. According to various sources, Russia also financed non-governmental organizations (NGOs) in Europe and the USA in order to push through its agenda.

Many NGOs enjoy special rights in the West: the EU and the United Nations grant environmental organizations extensive legal standing and information rights. Germany grants many organizations the tax-privileged status of "non-profit". As a rule, the NGOs do not have to disclose where they get their money from.

Researchers who analyzed NGO funding on behalf of the European Parliament in 2016 had to admit their failure: "The analysis reveals a complex web of intertwined NGOs, linked by the membership of numerous overlapping networks that pursue many different purposes," she said Conclusion. “It is often difficult to identify which organization in a network is engaged in which activities, or how grants flow between them in relation to those activities.”

There is an "obvious gap between NGOs' declared commitment to accountability and transparency and actual practice," the researchers concluded. Entries in the transparency register of the EU would mostly be avoided. It often remains unclear what interests the funders of the associations really have.

Anyone who demands insight into the funding of NGOs is therefore dependent on key witnesses. The Russian government has transferred 82 million euros to European climate protection associations whose aim is to prevent natural gas production in Europe, an informant told scientists at the Martens Center for European Studies.

Former NATO Secretary General Anders Fogh Rasmussen reported back in 2014 that Russia had supported environmental organizations "in order to maintain European dependence on Russian gas". "What are they smoking at NATO headquarters to spread such accusations?" Greenpeace countered the allegations. Due to the lack of transparency of the money flows described, it is not possible to make a conclusive, independent assessment of whether they are correct or not.

At least NATO stuck to their description. "We share the concern of some allies that Russia may seek to impede potential shale gas exploration projects in Europe in order to maintain Europe's dependence on Russian gas," a NATO official told Foreign Policy. Experts have puzzled over the "sudden" emergence of well-organized anti-fracking environmental groups in Eastern Europe, where Russia has been selling its energy but previously had no public concerns about natural gas production, the magazine wrote.

Fracking, which involves breaking up rock in the ground with a liquid to produce gas, has gotten a bad rap, although it's been tried and tested for decades with few problems now. Former US Secretary of State Hillary Clinton had also advocated fracking, but reported unusual resistance. In a private speech in 2016, made public by Wikileaks, she lamented: "We were dealing with fake environmental groups, and I'm a big environmentalist, but they were funded by the Russians."

American security expert Fiona Hill, former director for Europe and Russia on the Trump administration's National Security Council, reported on a conversation with Putin in November 2011 in which he made it clear to experts and journalists that he saw fracking in the US as a "major threat of Russian interests”. "We were struck by how much emphasis he put on the subject," Hill said.

American media reported on documents that were supposed to show that energy managers from Russian companies had transferred millions to American environmental organizations - which they, however, rejected. Representatives of American energy companies also accused the Kremlin of covert financing of climate protection groups. "Russia is funding the anti-fracking movement in the US," the head of Continental Resources claimed.

Climate and environmental protection organizations distributed misleading films of places where fracking is being done: Drinking water from the tap was burning, toxic gases and chemicals were seeping out of the ground, and entire regions were contaminated. Mass media picked up on the scenarios, particularly aggressively by the Russian channel “Russia Today”.

He labeled fracking companies as child molesters, falsely claiming natural gas extraction would cause cancer in children. A US National Security Agency report saw Putin's people behind the reports, which "probably reflected the Russian government's concerns about US natural gas production and potential challenges to Gazprom's profitability." "We have seen Gazprom funding from environmental NGOs," agrees Dominique Reynié of the Fondation pour L'innovation politique, a French research institute.

After Germany's decision to phase out nuclear energy, Gazprom celebrated "building new, modern gas-fired power plants in Germany". However, the expansion of fracking in the USA worried the Russian competition: the Americans had achieved a decisive turnaround by intensifying natural gas production by fracking in their own country - with positive consequences for the climate. The USA has been able to reduce its CO₂ emissions more than almost any other country in the past 15 years because it has replaced coal with cracked natural gas, which releases much less CO₂.

Europe also has immense shale gas resources. The EU Commission states that gas contained in shale rock using fracking "can contribute to the security of supply of the EU and its competitiveness". In the 2000s, the big energy companies in Europe were ready to develop domestic natural gas.

But the resources remained in the ground, the pressure from climate activists on companies and governments led to investors turning away, the investment bank Goldman Sachs determined. The Financial Times and recently the New York Times came to the same conclusion.

Exploration of new gas fields in Europe collapsed, including in Great Britain, which has particularly rich shale gas resources. Not only NGOs, but also scientific institutes cheered the trend. For example, the Grantham Research Institute on Climate Change of the London School of Economics recently called for the end of all domestic oil and gas exploration.

The market is now "fixated on climate change and the dwindling appetite for fossil fuels," wrote financial news agency Bloomberg. Share prices of companies that said they would expand their production of gas and oil came under pressure; Apparently, investors feared damage to their image. In the Netherlands, a court ordered the energy company Shell to reduce its CO₂ emissions, which further slowed exploration efforts.

The great opposition to natural gas production in Europe made gas from Russia attractive. Europe has radically reduced its production of conventional natural gas: 15 years ago it produced more gas than Russia exported, now Russia exports three times more natural gas than Europe produces. From 2015 to 2019 alone, Russia was able to increase its natural gas imports to Europe by a third. The continent now covers around 40 percent of its needs with Russian natural gas.

The market is now "fixated on climate change and the dwindling appetite for fossil fuels," wrote financial news agency Bloomberg. Share prices of companies that said they would expand their production of gas and oil came under pressure; Apparently, investors feared damage to their image. In the Netherlands, a court ordered the energy company Shell to reduce its CO₂ emissions, which further slowed exploration efforts.

The great opposition to natural gas production in Europe made gas from Russia attractive. Europe has radically reduced its production of conventional natural gas: 15 years ago it produced more gas than Russia exported, now Russia exports three times more natural gas than Europe produces. From 2015 to 2019 alone, Russia was able to increase its natural gas imports to Europe by a third. The continent now covers around 40 percent of its needs with Russian natural gas.

In recent years, Germany has relied particularly consistently on Russian energy. It phased out nuclear power, but did not allow terminals for gas shipments by ship from the US, instead planning dozens of new gas-fired power plants. The intended main supplier: Russia.

When former US President Donald Trump declared in 2018 that Germany had become dependent on Russia for its energy supply, German diplomats laughed at him. At the latest, however, the Russian invasion of Ukraine revealed Germany's dependency relentlessly. Chancellor Olaf Scholz (SPD) said Germany was dependent on Russian gas. If no more gas came from Russia, there would be a risk of “damage to society as much as possible,” said Economics Minister Robert Habeck (Green Party).

In the USA, too, the new government of President Joe Biden has meanwhile made a change. On his first day in office, Biden stopped the Keystone XL pipeline, which was supposed to transport oil from Canada 3,500 kilometers to the United States, after protests by activists. After the import stop for Russian oil, the President now has to put up with the accusation of endangering the supply security of the USA.

The result of the fight against natural gas production in Europe and the USA is sobering, it has not served climate protection. Natural gas is still burned, it only comes from Russia. Nuclear power plants were shut down in favor of natural gas. The war in Ukraine also makes natural gas more expensive, so that the demand for coal increases, which causes CO₂ emissions to rise more sharply. In Germany, the green economics minister is considering letting coal-fired power plants run longer due to a lack of alternatives to Russian gas.

British Prime Minister Boris Johnson, on the other hand, is now considering starting fracking in his country. Russia is no longer a reliable source, it is important to ensure the energy supply. The climate protection group Extinction Rebellion has announced that it will soon occupy oil refineries in Great Britain. "Fossil energies must be stopped once and for all," declared the activists. "Now is the time, this is the moment".

Wednesday, March 23, 2022

France: Nuclear Safety Authority stops construction on ITER fusion reactor site

 Le Monde:

On the pharaonic construction site of the prototype of the ITER nuclear fusion reactor at the Cadarache site (Bouches-du-Rhône), it is not just the workers who are busy. The engineers had to change their priorities to respond quickly to the long list of requests from the Nuclear Safety Authority (ASN), so that the assembly of this unique machine in the world continues on schedule.

ASN's requests, in the form of a letter addressed by its chairman to the director general of the international organization ITER, were revealed on 21 February by the news site New Energy Times, which is highly critical of the energy of merger. The missive is not good news. It indicates that, as it stands, the assembly of the reactor cannot begin, in particular the key and irreversible stage of welding the first two elements together, out of nine, constituting the vacuum chamber 19.4 meters in diameter and 11.4 meters high, in which the fusion reactions must take place.

Europe: members of the Bloc sound ways to end dependency from russian gas

 The measures are planned to be effective by the end of the year, WELT:

The pressure on the EU states to impose an embargo on Russian energy supplies is increasing. The heads of state and government meeting in Brussels on Thursday will also argue about this issue again. It is very unlikely that they will agree on a gas embargo this week. But the pressure will remain.

The European Commission, the EU's powerful administration, is therefore already preparing for a possible supply freeze for oil and gas from Russia – even in the event that Russia stops supplies of its own accord.

Russia accepts payment for gas supply only in rubles


In the future, customers in Germany and other EU countries will have to pay in rubles for gas deliveries from Russia. Russian President Vladimir Putin on Wednesday instructed the government to stop accepting payments in dollars or euros. Deliveries would continue to be fully guaranteed, the Kremlin chief assured in a government video conference that was broadcast on state television.

The "unfriendly states" blacklisted by Russia are affected. This includes Germany and all other EU countries, but also the USA, Canada and Great Britain.

The announcement promptly strengthened the Russian currency, which is under massive pressure. The move could therefore also aim to support the ruble exchange rate. Gas companies would first have to buy rubles on the foreign exchange market.

The central bank and the Russian government now have a week to determine the modalities for switching from foreign exchange to ruble payments, Putin said. The West itself has devalued its currencies by freezing Russian assets abroad.

"Escalation of the Economic War"

"This is an escalation of the economic war," Jens Südekum, a member of the scientific advisory board of the Federal Ministry of Economics and Technology, told the Reuters news agency. "Not many expected this broadside."

For Südekum, this represents a clear breach of contract. "There are long-term contracts for gas supplies that are denominated in dollars," said the professor at the Institute for Competition Economics at Heinrich Heine University in Düsseldorf. "If Putin now declares that he only accepts rubles, he is breaking these contracts." The West will now have to react in some way. "An embargo on energy imports from Russia has now become more likely."

If the West followed Russia's request, it would have to circumvent its own sanctions over the war against Ukraine and take rubles from the Russian central bank. "But it was actually sanctioned," said Südekum. "That's why you can't actually do that."

As a reaction to the sanctions imposed by the West, the Russian government had already decided at the beginning of the month that its own financial obligations to "unfriendly states" would only be settled in rubles. These include Ukraine, Switzerland and Japan.

Germany: chairman of industry association warns: gas network ill-equipped for LNG flows

 The chairman of Federation of German Industries (Bundesverband der Deutschen Industrie) issues a warning about a complete embargo on oil and gas from Russia. This could, according to his statement, generate a severe recession in Germany and Europe. Furthermore the european gas network is not ready for transporting LNG through Europe, SPON:

Forgoing imports of Russian gas and oil in the short term would cause massive damage to European industrial companies, according to the Federation of German Industries (BDI). "The EU is not prepared for a short-term, comprehensive energy embargo," BDI President Siegfried Russwurm told SPIEGEL. “In doing so, it would jeopardize its unity and ability to act economically and politically.” If there were no energy supplies, production stops threatened with unforeseeable consequences for supply chains and employment.

A boycott of Russian gas supplies would threaten the entire EU with a "structural test," Russwurm continued. Because the European gas network has not yet been designed for gas flows from West to East. "It is unclear whether, if Russian gas supplies are stopped, liquefied gas that ends up in the Netherlands or Belgium will find its way to the Czech Republic or Slovakia," said Russwurm. A gas embargo would cause disruption to production, loss of employment and, in some cases, massive damage to production facilities. A number of other business associations had already warned of this.

A boycott of Russian gas supplies would threaten the entire EU with a "structural test," Russwurm continued. Because the European gas network has not yet been designed for gas flows from West to East. "It is unclear whether, if Russian gas supplies are stopped, liquefied gas that ends up in the Netherlands or Belgium will find its way to the Czech Republic or Slovakia," said Russwurm. A gas embargo would cause disruption to production, loss of employment and, in some cases, massive damage to production facilities. A number of other business associations had already warned of this.

"We support the sanctions imposed on Russia by the western allies," said BDI President Russwurm. »We are aware that further harsh and unequivocal reactions may have to follow.«

Germany: Shell is first key account for LNG-terminal in Brunsbüttel

 The LNG-terminal in Brunsbüttel on Germany's north coast is in the planning stage since several years. The russian invasion into Ukraine could accelerate the completion. The operating company can introduce a major customer, the multinational oil and gas company Shell, writes SPON:

The operating company of the German Railway Terminals in Brunsbüttel has a large shopping center in the country. A statement stating that "the shell of a substantial part of the capacity of the terminals in the Brunswüttel for imports from LNG is free of charge", according to the German LNG Terminal GmbH mit. "Beide the pages of the work of the Daran, Umfang and Dauer of the partnership can be highly contracted to be united."

The Terminal is located in 2026 in operation and has a capacity of billions of cubic meters of gas. Long-lived for the import of green water-based derivatives, ammonia is also available.

Sunday, March 13, 2022

Gas: Spain positions itself as gas hub; wants to revitalize MidCat pipeline

 In view of the war in Ukraine and the sudden turnaround in gas procurement Spain positions itself as gas hub. Indeed it has a direct gas pipeline to Algeria (Medgaz) and has also the biggest LNG stocking capacity in Europe. Spanish government suggest the reconsideration of the MidCat pipeline (planned from Portugal, through Spain and the Pyrenees to France) that was abandoned in 2019 to compensate the unwelcomed gas from Russia, Le Monde:

While Europe seeks to reduce its dependence on Russian gas, Spain intends to position itself as a strategic "hub" to diversify the continent's supply sources. "We can be an alternative to Russian gas," insisted the Ministry of Foreign Affairs, from the beginning of February, even before the invasion in Ukraine. The idea has since caught on. “With its great energy capacity and its great experience in renewable energies, Spain can and will play an important role in supplying Europe, finally confirmed the President of the European Commission, Ursula von der Leyen, on a visit to Madrid. , March 5. And, for this, we must work in the interconnections between the Iberian Peninsula and the rest of the European Union [EU]. »

Tuesday, March 1, 2022

Nord Stream 2: operating company lays off all personnel

 The operating company of the contentious pipeline has announced that it discharges all 140 employees, BILD:

Does this mark the end of the Putin pipeline?

According to Swiss Economy Minister Guy Parmelin, the operating company Nord Stream 2 has laid off all employees. The company is based in the tax-efficient Swiss canton of Zug.

As Parmelin explained on Monday evening on French-speaking Switzerland television, 140 people were affected by the dismissal. The company asked for a meeting with representatives of the cantonal authorities this Tuesday, the broadcaster reported.

Last week, the United States imposed sanctions on Nord Stream 2 AG, prohibiting further business with the company. The German federal government has put the approval process for Nord Stream 2 on hold in view of the Russian escalation in Ukraine.

Nord Stream 2 is a subsidiary of the Russian gas company Gazprom and is headquartered in Zug, a good 30 kilometers south of Zurich. The pipeline that was laid and completed through the Baltic Sea was supposed to bring Russian gas to Germany.

The project was also supported by former Chancellor Gerhard Schröder (77), who, as a friend of Russia's warmonger Vladimir Putin, has been lobbying on his behalf for years. He is the head of the supervisory board at the oil giant Rosneft, has a top position at Nord Stream and is actually supposed to become a supervisory board member at the Gazprom group.

On Tuesday it became known that four employees from Schröder's former chancellor's office had quit - including the long-standing office manager Albrecht Funk. The reason: Schröder's failure to distance himself from Putin.

Sunday, February 27, 2022

LNG: Germany preparing for LNG imports

 With Russia as designated gas provider falling out due to the russian invasion of Ukraine and president Putin's unpredictable behaviour, Germany is carrying out a change in gas import, more precisely turning to US LNG (WELT):

On the high seas, in the middle of the Indian Ocean, the "Minerva Chios" suddenly changed course. The ship came from the USA and was almost there, but then it turned 180 degrees, turning from south-east to north-west. The captain had been assigned a new port. He should no longer head for Asia, as originally planned, but for Rotterdam. Apparently someone in Europe was offering more money for their cargo.

The "Minerva Chios" was loaded with liquid gas or "Liquefied Natural Gas", as it is called in the industry, LNG for short. These three letters have been at the center of world politics since the beginning of the Ukraine crisis. It's about the question of where millions of Europeans should get the raw material with which they heat and operate many of their power plants.

Because Russia, the most important gas supplier for Germany and the entire continent, has made itself an outsider by attacking Ukraine. An unpredictable aggressor who can no longer be trusted. Germany must look for alternatives to Russian natural gas, says Federal Minister of Economics Robert Habeck (Greens), otherwise you will become "a pawn".

Germany: chancellor announces construction of two LNG terminals

 In the light of the russian invasion into Ukraine german chancellor Olaf Scholz operates a reversal of the german energy policy. In a government declaration chancellor Scholz announced alongside a considerable raise of the defefense spendung also the construction of two LNG terminals, namely in Wilhelmshaven and Brunsbuttel where terminals never got beyond the project phase. WELT:

Chancellor Olaf Scholz (SPD) has announced a massive increase in German defense spending in response to the Russian attack on Ukraine.

The 2022 federal budget should be provided with a one-time special fund of 100 billion euros for “necessary investments and armament projects”, said Scholz in his government statement on Sunday in the Bundestag. He added: "From now on we will invest more than two percent of the gross domestic product in our defense every year."

To reduce dependence on Russian natural gas, Scholz announced the construction of two liquefied natural gas (LNG) terminals in Germany, naming Brunsbüttel and Wilhelmshaven in Schleswig-Holstein and Lower Saxony as locations. In addition, a coal and gas reserve should be built up.

An LNG terminal that receives gas today can also receive green hydrogen tomorrow, said Scholz. Although there are many terminals for liquefied natural gas in the EU, which comes from the USA or Qatar, for example, there have not been any in Germany so far.

Tuesday, February 22, 2022

Nord Stream 2: german chancellor stops pipeline project in reaction of russian invasion into Ukraine


As a reaction to the Russian actions towards Ukraine, the federal government is stopping the Nord Stream 2 pipeline project. Chancellor Olaf Scholz (SPD ) on Tuesday in Berlin. "And without this certification, Nord Stream 2 cannot go into operation."

Scholz condemned President Vladimir Putin's decision to recognize the self-proclaimed People's Republics of Luhansk and Donetsk as independent states as a serious breach of international law. With his actions in eastern Ukraine, Putin is not only breaking the Minsk Agreement, but also the UN Charter, which provides for the preservation of the territorial integrity and sovereignty of states.

Sunday, February 20, 2022

Nord Stream 2: the curious deals of the mecklenburgian foundation for climate protection

 The state of Mecklenburg-Vorpommern in the north of Germany has created a foundation for climate protection quite accurately one year ago. This foundation, the Stiftung Klima- und Umweltschutz MV, is seen as remedy to handle possible sanctions against operators and involved companies. However the object of the foundation and the backers are obscure. Recently the foundation purchased shares of a limited shipping company, the MAR Agency GmbH. The goals and intentions of this company are more than obscure. Traces lead to puppet-masters of Nord Stream 2, writes WELT:

Siegfried Kempe can look back on an adventurous life. The man from Mecklenburg had already sailed the seven seas as a sailor in GDR times. Later he maneuvered tugboats into the port of Rostock. In August 2018 it was over, retirement at the age of 63.

The local magazine "Der Warnemünder" paid tribute to the captain a. D. as someone who was a very educated man and gave good advice for retirement. But then everything turned out differently, Kempe was suddenly needed again. He should have a role in a play set on the grand stage of world politics.

The sailor is now an actor in the endless drama about Russian natural gas, American sanctions and German fickleness. However, hardly anyone knows, because Kempe acts behind the scenes. It's about the state-owned company Gazprom and its controversial pipeline in the Baltic Sea.

The commissioning of the line, which is now almost complete, was and is in jeopardy: First by punitive measures under the aegis of Donald Trump, now by Vladimir Putin's demonstration of power at the Ukrainian border.

In order to save the project, the state government of Mecklenburg-Western Pomerania and the Gazprom subsidiary Nord Stream 2 AG (NS2), which is responsible for the pipeline construction, have devised a sophisticated construct. And the name Kempe appears in it.

Thursday, February 17, 2022

Germany: high energy prices strain steel industry

 German steel producers complain about high energy prices and the planned new mechanisms of emission trading that will have a negative impact on competitiveness (WELT):

The steel industry in Germany is struggling with high energy costs. "In the last six months alone, our expenditure on electricity and gas has increased by a three-digit million amount," reports Bernhard Osburg, CEO of Thyssenkrupp Steel Europe.

And his company has the advantage of only having to buy a small amount of energy. "We currently produce two thirds of the electricity ourselves," reports Osburg at the "Handelsblatt annual conference on the future of steel". The cost explosion arises only with the remaining third.

For the industry as a whole, the Steel Industry Association puts the additional costs at around 1.7 billion euros at the current high price level for electricity and gas. "This endangers the international competitiveness of electric steel production, which will also play a decisive role in the climate goals of the federal government," warns Association President Hans Jürgen Kerkhoff. Especially since Germany already has one of the highest electricity prices in an international comparison.

But Kerkhoff does not just worry about the here and now. "The high energy prices are also jeopardizing the start of the planned transformation of the steel industry," says the industry representative. Because that requires a lot of energy.

So far, the industry has been one of the biggest climate sinners in Germany. Almost 60 million tons of CO₂ are emitted every year in steel production, which alone corresponds to a third of industrial emissions in Germany. In order to drastically reduce this number and to become almost climate-neutral in the future, manufacturers are planning new production processes.

“Green steel” is the corresponding catchphrase. This means that production is no longer carried out in the classic blast furnace, but in direct reduction plants. In contrast to the usual blast furnace route, so-called reduction gases, which extract the oxygen from the iron ore, are not produced with coking coal, but in the first step with natural gas and then with hydrogen in the future, produced with electricity from renewable energy. "This enables a CO2 reduction of 95 to 97 percent," says the think tank Agora Energiewende, which specializes in the electricity sector.

All major steel producers in Germany have had corresponding pilot plants for a long time. However, the actual conversion will cost a lot of money, estimates in the industry range from 20 to 30 billion euros. And investing in the systems is not enough.

At the same time, the energy requirement increases many times over. "Because the transformation of the steel industry is based on electrification, electrolytically generated hydrogen and natural gas as a low-CO₂ transitional raw material," explains expert Kerkhoff. Due to the high energy prices, there is now a risk of a drastic increase in costs. Because by 2030 alone, the demand for natural gas will increase by two thirds and the demand for green electricity will even triple.

The example of Thyssenkrupp shows how gigantic the quantities are in the final stage. The German market leader currently needs around 4.5 terawatt hours of energy for its plant at the Duisburg site – incidentally the largest steel plant in Europe. "If we produce in a climate-neutral manner, this need will increase tenfold," announces Steel Division boss Osburg. For comparison: According to the company, the 45 terawatt hours required then correspond to 4.5 times the electricity requirements of the city of Hamburg.

That is a gigantic amount. And unlike today, that would have to be bought in completely. "But we will not be able to do this alone, either as a company or as an industry as a whole," says Osburg. Rather, compensation is needed via the climate protection agreements planned by Federal Minister of Economics Robert Habeck (Greens).

Steel President Kerkhoff is also calling for state aid. "Politicians must not just look on, but should develop solutions in dialogue with industry on how gas and electricity prices can be kept at a competitive level for industry," demands the industry representative. Especially since the energy cost problem is by no means the only source of danger for the industry.

Burdens from European emissions trading. The EU is currently discussing a far-reaching revision of this mechanism. And the proposals currently being discussed provide for the gradual abolition of the free allocation of CO₂ certificates. According to the Steel Industry Association, there is a risk of additional costs of 16 billion euros per year - in addition to the investments in systems and the additional costs for energy.

“But that would take away the economic power and investment leeway that companies need for the transformation,” warns association leader Kerkhoff. The companies themselves complain about that. "It takes our breath away," says Thyssenkrupp manager Osburg. "Merging off free allocations and investing in the future at the same time - that can't work."

Geert van Poelvoorde also finds clear words. "You have to ask yourself whether the steel industry still has a future in Europe," says the European boss of ArcelorMittal, the world's largest steel manufacturer. “More pressure will not accelerate the transformation. On the contrary: the steel industry is being deprived of the means to switch production to green.”

Especially in connection with the high energy prices. Van Poelvoorde expects the costs for electricity and gas to normalize step by step. However, the price will not drop to previous levels. And even that has an impact. His company has a plant in Hamburg that will initially produce climate-friendly steel with natural gas and later with green hydrogen. “At the moment, however, we cannot operate this plant competitively. With the current electricity prices, it would stand still.”

However, a constant start-stop mode will not work. And what that can ultimately mean is shown by another example from the ArcelorMittal Group. "We just had to close a plant in Poland, also because the electricity costs are too high," reports van Poelvoorde.

The manager sees Europe as a steel location at a crossroads. "2022 will decide how big or small the European steel industry will still be." The EU must decide whether to support the transformation and thus the decarbonization of the steel industry with subsidies or not.

In any case, the previous plans in Brussels were not sufficient to ensure the future viability of the industry. "There are enough goals, what we need now are decisions to be able to implement projects so that green steel can be produced," van Poelvoorde very clearly demands support.

After all, in the case of ArcelorMittal, a complete conversion to direct reduction plants involves investments in the order of five to six billion euros. "In the current environment, however, a decision on these investments is impossible."

This is also emphasized by the steel trade association. "The political framework for investments worth billions must be created now," says Association President Kerkhoff. “These large-scale industrial investments require a reliable financing basis across legislative periods.

This is not about long-term funding, but about appropriate support in the ramp-up phase and protection against the enormous risks.” And that as quickly as possible. "Every month that goes by costs competitiveness," says Thyssenkrupp man Osburg. The long-established company wants to commission the first plant that can also produce climate-neutrally using hydrogen in 2025.

"It's a facility that's 150 meters high and costs a little over a billion euros. They don't even build them in 14 days. If we don't step on the gas now, that won't happen.” For such a decision, however, the supervisory board needs well-founded data and acceptable framework conditions.

Politicians are under pressure. Because steel is one of the most important materials and also plays a key role in the German industrial mix, after all, car and mechanical engineering are among the core sectors in this country. And their business is closely linked to steel. According to a study by Prognos commissioned by the Steel Industry Association, a drop of 40 percent in steel production in Germany means the loss of 200,000 jobs and 114 billion euros in added value.

LNG: discordance about the export of US LNG

As an appendix to this article oilprice.com writes:

Just as U.S. exports of liquefied natural gas (LNG) serves as the main cog in helping keep the lights on and homes heated in Europe in this windless winter, a group of Democratic senators sends a letter to Energy Secretary Jennifer Granholm urging her and the Biden administration to take action to limit U.S. LNG exports.

In their letter, these 10 senators "...urge the Department to conduct a review of LNG exports and their impact on domestic prices and the public interest, and develop a plan to ensure natural gas remains affordable for American households. Until such a plan is completed, the Department should consider halting permit approvals of U.S. LNG export facilities."

There are several problems with this approach. The first is that, as stated above, Europe is in desperate need of U.S. LNG this winter and likely beyond as its wind industry fails to deliver on its promises. Second is the fact that, despite record levels of LNG exports in recent months, U.S. natural gas production continues to enjoy a steady surplus over demand for it. The U.S. price, currently standing at about $4.80 per Mmbtu at the Henry Hub, is not connected to prices for international natural gas, which in Europe is currently selling for upwards of 6 to 7 times the U.S. price.

The U.S. proven resource of natural gas is equal to hundreds of years of current consumption. Shouldn’t we as a nation should celebrate our ability to pitch in a small sliver of what we produce to help avoid a looming humanitarian catastrophe across the European continent? That crisis was brought on by the wrong-headed energy policies adopted by governments who share the general energy outlook of Granholm, Biden, and this group of senators.

You can read the rest of the piece via the below link:


France: France Braces For Blackouts As Gas Stockpiles Dwindle


The Brits aren't the only European nation to find itself on the verge of a full-blown energy crisis. On Thursday, French natural gas pipeline operator GRTgaz warned that French gas stockpiles are much lower at this point in the year than they have been during years past - and as a result, they run the risk of potentially being depleted before the winter is up, a disaster that could make last year's deep freeze in Texas look tame if a sudden cold snap sends demand soaring.

According to data from Gas Infrastructure Europe, France’s stockpiles were about 34% full as of Feb. 1, which is well below the five-year average of 42%. Inventories are now at the lowest seasonal level since 2018, when a brutal winter cold snap nicknamed "the Beast from the East" left French reserves standing at just 3% when the heating season was over.

"We’ll probably be close to zero toward the end of March, and we remain vigilant on that topic," GRTgaz chief Thierry Trouve said in a presentation in Paris Thursday.

You can read the rest of the piece via the below link:


Nuclear fusion: JET scientists report record energy production

 Scientists of the Joint European Torus (JET), Europe's largest fusion reactor, claim to have produced more than twice the energy than the last record measurement in 1997 in a new experiment (Le Monde):

Scientists working at a European experimental facility in the UK claimed Wednesday (February 9th) that they have produced more energy from nuclear fusion than ever before. An alternative to the nuclear fission used in current power plants, nuclear fusion aims to reproduce what happens in the heart of the Sun and is considered by its supporters to be the energy of tomorrow, in particular because it produces little waste. – and much less radioactive than those from a conventional reactor – and no greenhouse gases.

A team from the Joint European Torus (JET), the world's largest fusion reactor, located near Oxford, has succeeded in generating 59 megajoules of energy from this process, more than doubling the previous record set in 1997, according to the UK Atomic Energy Authority (UKAEA). The results "are the clearest demonstration on a global scale of the potential of fusion to provide sustainable energy," the same source said in a statement.

Netherlands: gas orders from Germany lead to discontent in dutch population

 Residents of the Groningen gas field suffer from earthquakes as a consequence of the year-long gas production. Germany however has ordered a higher amount of gas from the field that was bound to be shut down in 2026. The dutch side blame Germany to shift their problems to the Netherlands, hinting at the stagnating certification process of contentious Nord Stream 2 pipeline (WELT):

When René Paas, the Dutch King's commissioner for the province of Groningen, travels to the seat of government in The Hague, every conversation begins with the question: What's the situation with the gas field? That's how he tells WELT on the phone. "Groningen has been associated with the gas production there and the associated problems for years."

Because of gas production, since the 1990s there have been an increasing number of smaller earthquakes that cause damage to residential buildings. In response to the loud protests of the Groningen population, the Dutch cabinet finally decided to initially reduce the subsidy significantly and then stop it in mid-2022. Gas production in Groningen will only continue until 2026 as an emergency solution for cold winters.

A project that Germany is now thwarting. As the “Spiegel” reported, German suppliers have probably ordered 1.1 billion cubic meters more gas for the 2021/22 financial year than planned. In addition, the commissioning of a nitrogen factory, which is to process imported gas for Dutch households in the future, has been delayed.

Nord Stream 2: questions about the peculiar environmental foundation in Mecklenburg-Vorpommern

 Lawmakers of the oppositional green-party in the northern state of Mecklenburg-Vorpommern contest the official objectives of the myster curious foundation for climate and environmental protection "Stiftung Klima- und Umweltschutz MV" that was founded at the instigation of prime minister Manuela Schwesig, staunch supporter of the contentious pipeline. Anti-corruption organisation Transparency International blames the opacity of the organisation, writes WELT:

And yet he doesn't move. After the meeting with President Vladimir Putin on Tuesday in Moscow, Chancellor Olaf Scholz (SPD) was once again unable to bring himself to clearly name the controversial Nord Stream 2 Baltic Sea pipeline as a possible sanctions instrument against Russia. When asked a question, the chancellor said somewhat casually: "As far as the pipeline itself is concerned, everyone knows what's going on."

By this, Scholz means: If Russia intervenes militarily in Ukraine, Nord Stream 2 will not receive an operating license. The Chancellor does not state this clearly, among other things, because influential Social Democrats have different ideas about what is "going on" with the pipeline, also in view of Russian aggression: Mecklenburg-Western Pomerania's Prime Minister Manuela Schwesig (SPD) said at the New Year's reception of the Eastern Committee of the German economy at the end of January, when the current Ukraine crisis had long been smoldering: "I hope for a speedy, rule-of-law procedure so that the line can go into operation." It still does to this day.

Alongside former Chancellor Gerhard Schröder (SPD), the prime minister is regarded as the strongest champion of the gas pipeline. But in view of Schwesig's increasing doggedness, resistance grew. The Greens in the Schwerin state parliament have now handed the state government a comprehensive package of small inquiries that could put Schwesig and other pipeline supporters in an extremely uncomfortable position.

Wednesday, February 16, 2022

LNG: The US are a new player in the european gas game

 In view of the tensions between Russia and Ukraine and the menace of a natural gas cut off from Russia and the increased will of several european countries to turn away from russian gas, us-american companies take the baton as a supplier of LNG to Europe, writes french newspaper Le Monde:

It was December 2021 when it appeared that Russia was amassing its troops on the doorstep of Ukraine. Suddenly, the Minerva Chios, an LNG carrier from Louisiana, turned around, while it was in the middle of the Indian Ocean. Direction Europe, via the Suez Canal, with its cargo of American liquefied natural gas (LNG). It was the same for the Maran Gas Vergina, coming from Delaware, which was approaching the Strait of Malacca: it turned around to unload in Turkey. The Marvel Crane, which was going to use the Panama Canal for Asia, headed for Spain. The Old Continent, so dependent on Russian gas, suddenly became attractive and shipowners diverted their cargoes to the best buyers.

Friday, January 7, 2022

Northvolt: the new european battery giant

 Former Tesla employees have built the biggest european battery factory in Skelleftea in the north of Sweden, a report by french newspaper Le Monde:

A decade ago, the future looked bleak in Skelleftea. In the town of 71,500 inhabitants, the size of Corsica, 800 kilometers north of the capital, Stockholm, most mines had closed. Those that still produced minerals had replaced men with machines. In search of a brighter future, the young people headed south. In a burst, in 2015, the municipality set itself the goal of reaching 80,000 inhabitants by 2030. "But we knew it would be very hard," admits today the director of municipal services, Kristina Sundin Jonsson.

This was without counting the miracle that occurred in the fall of 2017, when the company Northvolt, created two years earlier in Stockholm, chose Skelleftea, among 40 Swedish municipalities, to set up its “gigafactory” of electric batteries. At first, the locals only half believed it. The hill above the construction site in the east of the city has been renamed "the hill of the skeptics". Locals have gotten into the habit of climbing up to follow the progress of the work. First, we had to cut down trees over an area the size of 280 football pitches, then level the pitch with explosives. On October 15, 2019, construction of the buildings could finally begin.

Renewables: the devastation of nature for sustainable technologies

Deforestation and environmental devastation from mining activities - especially in third world countries - are the little-known downside of the energy shift, explains WELT:

When Ecuador reported a new wood export record, the spokesman for the indigenous association NAE called for an export stop of the coveted balsa wood. "Stop your investments," said the letter to international donors in June. "The loggers are causing a division among the indigenous brothers."

CERN: on the scent of the Big Bang

 Scientists of the European Organization for Nuclear Research (CERN) tried to gain new insights about the Big Bang and gathered fascinating new data, writes WELT:

In search of the origin of our existence, physicists at the European Organization for Nuclear Research (CERN) in Geneva have achieved a record measurement. However, the hope of an explanation for why matter and antimatter did not annihilate each other during the Big Bang has been shattered for the time being, as Stefan Ulmer told the German Press Agency. The physicist is the founder of the Baryon Antibaryon Symmetry Experiment (BASE) at Cern, which deals with the properties of antimatter.

Saturday, January 1, 2022

Germany: is the reactor shutdown a terrible and irreversible mistake?

 A quite interesting insight in the last day of Grohnde Nuclear Power Plant by scientist Anna Veronika Wendland and her criticism of german climate lobby in Salonkolumnisten:

On December 31st, three German nuclear power plants will be forced to shut down, although it is already recognized that the nuclear phase-out was a mistake. Why was it still not possible to save the systems? An insight into what is happening on site - and a search for the causes and the responsible actors.

The Grohnde nuclear power plant goes offline on New Year's Eve. I researched in this nuclear power plant for six years as a long-term observer and wrote parts of my habilitation thesis. And also a number of pieces for the salon columnists. Now I am accompanying the last week in power operation and the transition to post-operation and dismantling.

The facility will be shut down as if one of the more than thirty overhauls that the team had behind them. From 6 p.m. they gradually retract the control rods and go down at 10 megawatts per minute. At 25 percent reactor output, the live steam diversion station opens, and the excess steam that the turbine no longer needs is then fed directly into the condenser. Shortly before midnight we are so low that the reverse power protection triggers the turbine shutdown. The quick-closing valves are closed, the steam flow stops, the generator switch opens and disconnects the system from the mains. From this point in time, our 70 megawatts of own consumption will no longer be produced by us, and Grohnde has met the deadline stipulated in the Atomic Energy Act: shutdown “by December 31 at the latest. 2021 "

EU: EU commission wants to classify nuclear and gas as climate friendly energies

 Right before the release of the EU taxonomy for sustainable activities, also called green taxonomy in january, information got out that the EU commission - pressured by France and Poland - wants to rate nuclear and natural gas as climate friendly energies. Politicians of the Green party are upsed, writes WELT:

The EU Commission wants to classify energy generation from natural gas and nuclear plants as climate-friendly. According to a draft ordinance by the Brussels authority, permits issued for new nuclear power plants by 2045 should come under the so-called taxonomy ordinance and construction should be subsidized accordingly. For new gas infrastructure, this should apply under certain conditions until 2030.

The taxonomy is a kind of classification of sustainable economic activities and is equivalent to a classification as worthy of funding and a recommendation to investors. The EU Commission had already presented the corresponding legal act in April. At the time, however, the authority left out the delicate question of assessing gas and nuclear energy. We should await further expert reports and evaluations.

France: french government is lagging behind EU climate goals

 As France is taking over the presidency of the Council of the EU on january 1st 2022 its climate performances is scrutinized, writes WELT:

Even in normal times France is decisive for the fortunes of the European Union. From January 1st, the country and President Emmanuel Macron will become even more important. Then France will take over the rotating EU Council Presidency, i.e. political leadership and coordination of the 27 member states.

For six months, Paris will play a central role in coordinating negotiations among the member states, formulating strategies and negotiating compromises. It's an important function; The ability of the Council Presidency to determine whether and how legislative proposals progress at European level is crucial.

A lot is expected of politically weighty countries like France during their Council presidencies - not least because they have large civil servants that are necessary to advance the often complex issues.

Germany: consumers hit by high gas and electricity prices; myth of cheap renewables

 As three nuclear power plants have been shut down on new year's eve consumers face skyrocketing prices for gas and elecricity. Consumers pay the price of the energy change in Germany, writes WELT:

Many consumers eager to shop are impatiently waiting for the bargain day called “Black Friday” in the coming week. According to an old tradition, on the last weekend in November you can buy new electricity guzzlers for the household particularly cheaply. But already this week, a completely different “Black Friday” on the energy market may not leave much of the shopping appetite of many shoppers.

Because energy suppliers who want to change their electricity and gas prices on January 1st must, according to the law, announce this six weeks in advance, that is: on the Friday of the week that ends. The announced price increases are likely to trigger a real energy price shock for many.