Essay by Eric Worrall
UK Prime Minister Liz Truss and EU plan to impose Energy Price Cap on Putin – but with China’s hydroelectricity is exhaustedand Russia sends gas to China via pipelineThe EU has no leverage to negotiate discounts.
Putin warns the West will ‘continue to freeze’ if energy price caps are in place – and Russia will stop supplying gas and oil
- Putin says Western efforts to cap Russian oil and gas prices are ‘stupid’
- The Russian leader, 69, warned EU leaders that Russia will abandon supply contracts if the EU imposes price caps on its gas and oil exports.
- If the supply of gas and energy is stopped, there will be dire consequences
Via RACHAEL BUNYAN FOR MAILONLINE
PUBLISHED: 19:33 AEST, September 7, 2022 | UPDATED: 05:36 AEST, September 8, 2022Russian President Vladimir Putin today warned that the West will ‘continue to freeze’ if price caps are imposed on Russia’s oil and gas exports.
Putin told an annual economic forum in the far eastern port city of Vladivostok that Russia would stop supplying gas and oil if these prices continued.
The Russian leader, 69, said Europe’s call to cap the price of Russian gas was ‘stupid’, and would lead to higher global prices and economic problems in Europe.
However, EU head Ursula von der Leyen this morning refused to back down and suggested that member states agree on price limits on Russian gas imports.
‘The goal here is very clear. We must cut the Russian revenue that Putin uses to finance the devastating war against Ukraine,’ the European Commission President told reporters.
…
This is a crisis that could have been avoided. Putin is responsible for shutting down the gas faucet, but European and British leaders are responsible for reckless green energy policies that leave their countries very vulnerable to the games of Putin.
Why do British Prime Minister Liz Truss and the European Union take such an unhelpful stance?
My theory is that they are making a mistake in the new negotiation, because as far as I can tell the leaders of the EU and UK have never run a business. PM UK Liz Truss went straight from an employee to a member of parliament. EU President Ursula von der Leyen worked as a doctor before entering politics.
Running a business is a tough lesson in the dynamics of negotiation. If you want to negotiate a discount on an important item or deny someone a price increase, you need to have a backup plan, in case the other party tells you to go down and disrupt the conversation. judge. That’s what Putin just did.
Europe and Britain have no leverage over Russia, and no backup plan, because Russia no longer needs their business. Russia can sell as much gas as it wants to China, through a pipeline opened in 2019 (another will be completed in 2025). Russia has also used gas used to generate electricity in Europe, shipped to China via Russian HVDC connector.
Britain and Europe may have worked on a contingency plan, but they simply ignored the problem instead of trying to find a solution. Had the UK and Europe started issuing mining permits last February, when Russia invaded Ukraine, some of that gas would now be online. Even if they have delayed a few months, there is still a chance to increase supply before February.
But Europe and the UK are running out of time – even if a large amount of jailbreaking devices were loaded onto a ship on the US East Coast today, it would still take at least a week to arrive, and months for installation and connection to gas supply lines. There is currently no possibility of a significant increase in domestic energy supplies in the UK and Europe before next winter.
Europe claims its gas storage facilities are almost full – but they are still talking about energy allocationin the context that Russia stopped supplying gas completely.
Biden promised to ship more U.S. gas, but the United States itself is in short supply right now. Biden recently told US exporters to cut, because the Northeast is running short of energythanks to all those US pipelines that have been canceled and fossil fuel projects canceled.
Australia is supplying some coal, but it certainly won’t be enough – Asia needs energy just as much as Europe, and Asia is much closer to Australia. In the time it takes to send a shipment of coal to Europe, the same ship could have carried two loads of coal to Asia, making it very expensive to divert coal to Europe for its suppliers. Australia.
Even if Australia does send more coal, due to the hostility of regulations to coal and coal plant closures, Europe and the UK may not have the capacity to use the additional coal that Australia has. transport or additional coal that they dug themselves. Gas plants can be converted to coal burning, by installing a Scuba – but it takes months, possibly years, to fabricate the necessary equipment and install it correctly. Air purifiers produce deadly amounts of carbon monoxide, which needs to be managed correctly, so installing an air purifier isn’t something you can rush.
Australia can send more liquefied natural gas, but Australia’s gas exporters are already at full capacity, tied to long-term contracts with Asian countries. Similar long-term contracts that Putin advises European leaders to consider.
Britain’s and Europe’s last hope can buy enough refined diesel from India and China to continue operations. Europe and the UK have access to substantial emergency diesel generator capacity. India is killing people, bypassing sanctions and processing Russian crude into distillates, and selling their products on the world market. But someone will have to cover the cost of burning diesel to get electricity, emergency backup generator operators charge larger orders for their electricity than conventional energy suppliers. In any case, it is doubtful that enough oil was shipped to Europe in time to make a difference.
The price cap will fail, and ordinary British and European people will have to endure the stupidity of their leaders.
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