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Europe’s energy armageddon is coming from Berlin and Brussels, not Moscow

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William F. Engdahl, 2 September 2022, Information Clearing House.

On 22 August, the market price of natural gas, sold on the natural gas exchange in the German gas hub THE (Trading Hub Europe), was more than 1000% higher than a year ago. The Scholz regime tells most citizens that the cause is Putin and Russia’s war in Ukraine. The truth is quite different. EU politicians and large financial interests are using Russia to cover up what is an energy crisis created by Germany and Brussels. The consequences are not accidental.

It is not because politicians like Scholz, the German Green Economy Minister Robert Habeck, or the European Commission’s Vice-President Frans Timmermans, are stupid or ignorant. Corrupt and dishonest, perhaps. They know exactly what they are doing. They read from a script. It’s all part of the EU’s plan to de-industrialize one of the most energy-efficient industrial concentrations on the planet. This is the UN’s Green Agenda 2030, otherwise known as Klaus Schwab’s Great Reset.

The EU’s deregulated gas market

What the European Commission and government ministers in Germany and in the rest of the EU are carefully hiding is the transformation they have created in how the natural gas price is determined today. For almost two decades, the European Commission, supported by the mega-banks, such as JP MorganChase or large, speculative hedge funds, has laid the foundations for what is today a complete deregulation of the market for natural gas. It was promoted as the “liberation” of the EU’s natural gas market. What “liberation” now allows is for unregulated free market trading to fix prices in real time instead of long-term contracts.

From around 2010, the EU began to push for a radical change in the rules for the pricing of natural gas. Before this, most gas prices were fixed in long-term contracts for delivery through pipelines. The largest supplier, Russia’s Gazprom, supplied gas to the EU, especially to Germany, in long-term contracts linked to the price of oil. Until recent years, almost no gas was imported by LNG ships. With a change in US laws to allow the export of LNG from the vast shale gas production in 2016, US gas producers began a major expansion of the construction of LNG gas export terminals. The terminals take an average of 3 to 5 years to build. At the same time, Poland, the Netherlands and other EU countries started building LNG import terminals to receive LNG from abroad.

The Anglo-American oil giants emerged from World War II as the world’s leading suppliers of oil, they were then called the Seven Sisters, who created a global oil price monopoly. Henry Kissinger noted during the oil shocks of the 1970s: “Control the oil and you control entire nations.” Since the 1980s, Wall Street banks, led by Goldman Sachs, created a new market in “paper oil”, or futures and derivatives trading in future barrels of oil. It created a huge casino of speculative profits that was controlled by a handful of giant banks in New York and the City of London.

The same powerful financial interests have been working for years to create a similar globalized “paper gas” market in futures, which they could control. The European Commission and its Green Deal agenda to “decarbonize” the economy by 2050, eliminating oil, gas and coal fuels, sprung the ideal trap that has led to the explosive increase in EU gas prices since 2021. To create this ” simple’ market control, the EU was ‘lobbied’ by the globalist interests to impose draconian and de facto illegal rule changes against Gazprom to force the Russian owner of the various gas distribution (pipeline) networks in the EU to open them to competitors’ gas.

The big banks and energy interests that control EU policy in Brussels had created a new independent pricing system parallel to the long-term, stable prices of Russian pipeline gas, which they did not control.

By 2019, the series of bureaucratic energy directives from the Brussels European Commission allowed fully deregulated gas market trading to de facto set the prices of natural gas in the EU, despite Russia still being by far the largest source of gas imports. A number of virtual trading centers were established to trade futures contracts for gas in several EU countries. In 2020, the Dutch TTF (Title Transfer Facility) was the dominant trading center for EU gas, the so-called EU gas standard. In particular, TTF is a virtual platform for trading in futures gas contracts between banks and other financial investors, “Over-The-Counter”. This means that this trade is de facto unregulated, outside of any regulated exchange. This is crucial to understanding the game being played in the EU today.

In 2021, only 20% of all natural gas imports into the EU were LNG gas, whose prices were largely determined by futures trading in the TTF hub, the EU’s de facto gas standard, owned by the Dutch government, the same government that destroys the farms in the country for a false nitrogen pollution claim. The largest import share of European gas came from Russia’s Gazprom, which supplied more than 40% of the EU’s imports in 2021. The gas was via long-term pipeline contracts whose price was far lower than today’s TTF speculation price. In 2021, EU states paid an estimated additional cost of around $30 billion for natural gas in 2021 than if they had adhered to Gazprom’s oil price pricing. The banks loved it. American industry and consumers did not. Only by destroying the Russian gas market in the EU could financial interests and the Green Deal advocates create their LNG market control. )

Illustration: Shutterstock

Shuts down EU pipeline gas

With full EU support for the new gas wholesale market, Brussels, Germany and NATO began to systematically cut off stable, long-term gas to the EU.

After Algeria severed diplomatic ties with Morocco in August 2021 over disputed territories, the country announced that the Maghreb-Europe (MGE) gas pipeline, launched in 1996, would cease operations on October 31, 2021, when the contract period ended.

In September 2021, Gazprom completed its multibillion dollar project, the undersea Nord Stream 2 gas pipeline from Russia, across the Baltic Sea to northern Germany. It would double the capacity of Nord Stream 1 to 110 billion cubic meters annually, allowing Gazprom to be independent of disruptions in gas supplies via the Soyuz pipeline that runs through Ukraine. The European Commission, supported by the Biden administration, blocked the opening of the pipeline with bureaucratic sabotage, and finally German Chancellor Scholz imposed sanctions on the pipeline on 02/22/22. Since then, the growing gas crisis has increased in scope. Despite the crisis, the German government has refused to open Nord Stream 2, even though the pipeline is finished.

In May 2022, although Gazprom supplies to the Soyuz gas pipeline through Ukraine were uninterrupted for nearly three months of conflict, despite Russia’s military operations in Ukraine, the NATO-controlled Zelensky regime in Kyiv shut down a major Russian pipeline through Lugansk, which brought Russian gas both to his own Ukraine, as well as to EU states, Zelensky declared that it would remain closed until Kyiv gains full control of the pipeline system that runs through the two Donbass republics. That part of the Ukraine-Soyuz line, cut a third of the gas via Soyuz to the EU. It certainly did not help the EU economy at a time when Kyiv was begging for more weapons from the same NATO countries. Soyuz opened in 1980 under the Soviet Union and brought gas from the Orenburg field.

Then the Russian gas pipeline Jamal, through Belarus and through Poland, came to Germany. In December 2021, two months before the Ukraine conflict, the Polish government closed the Polish part of the pipeline and cut Gazprom’s gas supply, with its low prices to Germany, as well as Poland. Instead, Polish gas companies bought Russian gas from the warehouses of German gas companies, via the Polish-German section of the Jamal pipeline, at a higher price in a reverse flow. The German gas companies obtained their Russian gas via long-term contracts at a very low price and resold the gas to Poland at a large profit. This madness was deliberately downplayed by the green economy minister Habec, Chancellor Scholz and the German media, even though it forced German gas prices even higher and worsened the German gas crisis. The Polish government refused to renew the gas contract with Russia, and instead buys gas on the free market at much higher prices. As a result, no more Russian gas flows to Germany via Jamal.

Illustration: Shutterstock

Finally, the gas supply via the submarine pipeline, Nord Stream 1, was interrupted due to the necessary repair of a Siemens-manufactured gas turbine. The turbine was sent to Siemens’ special facility in Canada where the anti-Russian Trudeau regime withheld the turbine for several months before it was finally released at the request of the German government. Yet they deliberately refused to give the delivery to its Russian owner, but instead to Siemens Germany, where it is now located, as the German and Canadian governments refuse to grant a legally binding sanctions waiver for the transfer to Russia. In this way, Gazprom gas through Nord Stream 1 is also dramatically reduced to 20% of normal.

In January 2020, Gazprom began sending gas from the TurkStream pipeline through Turkey and on to Bulgaria and Hungary. In March 2022, Bulgaria unilaterally, with NATO support, cut off its gas supplies from TurkStream. Hungary’s Viktor Orban, on the other hand, still secured TurkStream gas from Russia. Today, Hungary has no energy crisis and imports Russian gas at very low, fixed, contract-fixed prices.

By systematically sanctioning or shutting down gas supplies from long-term, affordable pipelines to the EU, gas speculators via the Dutch TTP have been able to use any obstacle or energy shock in the world, whether it is a record drought in China or the conflict in Ukraine, to export restrictions in the US – to offer EU wholesale prices beyond all borders. From mid-August the forward price on TTP was 1000% higher than a year ago and was rising daily.

Germany’s biggest price madness

The deliberate energy and electricity price sabotage becomes even more absurd. On August 28, German Finance Minister Christian Lindner, the only member of the government from the Liberals (FDP), revealed that under the opaque terms of the complex electricity market reform measures of the EU, producers of electricity from solar or wind automatically receive the same price for their “renewable » electricity they sell to the power companies, for the electricity grid, as the highest cost, i.e. natural gas!

Lindner called for an “urgent” change in the German energy law to be able to disconnect different markets. The fanatical green economy minister Robert Habeck immediately replied that “We are working hard to find a new market model”, but warned that the government must be careful not to intervene too much: “We need functioning markets, and at the same time we must set the right rules so that positions in the market are not abused.”

Habeck is actually doing everything to build the green agenda and eliminate gas, oil and nuclear power, the only reliable sources of energy at the moment. He refuses to consider reopening three nuclear facilities that were closed a year ago, or to reconsider the closure of the remaining three in December. While declaring in a Bloomberg interview that “I don’t want to approach this issue ideologically,” he declared in the next breath, “Nuclear power is not the solution, it’s the problem.” Habeck and European Commission President Ursula von der Leyen have repeatedly declared that more investment in unreliable wind and solar is the answer to a gas price crisis that their policies have deliberately created. To all intents and purposes, the suicidal energy crisis ongoing in Europe has been “Made in Germany”, not Russia.


F. William Engdahl is a strategic risk consultant and lecturer, he has a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”. (https://journal-neo.org/ )

The article is taken from:

http://www.informationclearinghouse.info/

Translated into Norwegian for steigan.no by Hans Snøfjell.

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The article is in Norwegian

Tags: Europes energy armageddon coming Berlin Brussels Moscow

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