Gas and light prices in Europe are breaking records, and gas shortages even threaten food shortages.
Europe is having serious gas problems. Gas prices are at an all-time high and gas reserves are running low. Gas prices in Europe have more than tripled since the start of the year.
What will happen next?
There are several reasons for the rise in gas prices and the shortage of gas in Europe. Last winter was unusually cold in Europe, the heating was too harsh and gas reserves in storage were exhausted. The summer heat spurred up the demand for electric power (due to air-conditioning), but it dried up reservoirs and reduced the generation of hydroelectric power plants. Turbines were followed by wind turbines — Europe had its windiest summer since the middle of the last century. All this has spurred demand for gas. But we are short of it too, worldwide.
Europe’s own natural gas production is shrinking. In addition to dwindling reserves in the North Sea, several Norwegian gas fields are shut down for planned maintenance.
Europe is switching to green energy, shutting down nuclear and coal-fired power plants. But renewables are an unstable resource, and gas is in short supply.
The Europeans did not read the unpleasant news about gas prices in the newspapers but in their utility bills. They went to complain to the authorities, but the authorities have almost no possibility to limit the price increase on the extremely deregulated and competitive market. The authorities resorted to the traditional recipe, tried after the two crises of this century — douse the fire with money.
France promised to pay a lump sum of 100 euros to 5.8 million low-income families. Spain, much to the annoyance of the European Commission, promised to take 2.6 billion euros of extra profits from energy companies in the next six months and give them as subsidies to the population.
Italy started a reform of public utility payments and allocated up to 3 billion euros for temporary subsidies. Greece promised compensation of 9 euros a month for everyone and even more for the poor, as well as preferential rates for state-owned company customers. Portugal decided not to raise the ceiling on regulated electricity prices in 2022, despite the rising cost of raw materials for its production.
German authorities, on the other hand, saw no need to intervene.
The British experience shows how a gas shortage can turn into a food crisis.
It all started with the fact that the American owners stopped both British mineral fertilizer plants until spring. Expensive gas made their output unprofitable. Not only that, farmers were left without nitrate and urea. It turned out that carbon dioxide, a byproduct of their production, was much more needed.
The shutdown of the mills deprived Britain of 60% of its carbon dioxide. The carbon dioxide that is used as a preservative in food packaging, bubbles in lemonades and sodas, stuns cattle during slaughter, and is used for cooling in everything from shipping to medicine to nuclear power plants.
The shortage of carbon dioxide has proved such a serious problem for the food industry and farmers that the British government has given money to the American owners of two fertilizer plants to get them running. Christmas has not yet been canceled.
But only part of the problem has been solved. The greenhouses and stalls are still heated by gas and lit by expensive lights. Let the food not disappear, but it will definitely get more expensive, farmers and supermarkets warn.