Friday 22 July 2022

Germany not so sure-footed

We are no fans of Russian aggression here, but sadly do recognise that Putin is better at Realpolitik than the West.

As Russia sells ever more gas to China, it is starting to turn the taps down substantially to Europe. Italy, Poland and Germany will be the main victims. As a result, the German President of the EU, Ursula Van de Leyen, has demanded all EU countries reduce gas consumption by 15%.

This has not gone unnoticed by Spain and others that are not reliant on Russian gas. Germany is also closing its nuclear power stations and burning more coal to reduce its reliance on gas. There is little appetite to tag along to German needs. 

Putin is showing again how the virtue signalling of Western governments is so contradictory to their needs. The West is going to find it very hard to stay united this coming winter. The US is not keen on riding to the rescue, either, due to its own inflationary problems, even though there is plenty of gas for export. 

Sad to admit that Russia has the upper hand in geopolitics at the moment, but they planned this for a long time and are executing this well, even if the war in Ukraine is much harder than they anticipated. 


dearieme said...

Oh well, time to summon American "soft power", eh?

Ha bloody ha.

Blockades work, as the Royal Navy showed in the Napoleonic Wars and the Great War. Putin knows it. The bozos who run The West seem to be as ignorant as they are arrogant, as they are foolish.

P.S. Is his "Covid" the first step to the Dems easing Brandon out?

Anonymous said...

Reading Ursula Van de Leyen's statement regarding this:

She mentions the EU have set up a joint gas storage that is now 64% full, which sounds impressive but will having this have any meaningful impact if Russia switches off the gas taps completely?

Caeser Hēméra said...

Worse still for Germany, the Greeks, Spaniards and Portugese all remember all too well the po-faced lectures from Germany over fiscal rectitude. They've not forgotten, and the Spanish have already batted the 15% cut back to Berlin.

Sympathy will be even shorter supply than the gas.

With the Italian elections due, I've no doubt Rome will join Berlin in wanting to cave to Putin.

January might be a good time to place an amended NI Protocol document in front of someone, at that point the EU ought to have several bigger fishes to fry.

Nick Drew said...

@ 64% full, which sounds impressive but will having this have any meaningful impact

In a word, no.

In three words: better than nothing.

Further: there is no EU-owned gas storage, it's country-by-country, owner-by-owner, and not at all evenly distributed. So "sharing this around" would be a difficult task even logistically, and that's before individual nations decline to play ball. She'd be invoking totally untried EU "procedures"; and protectionist nationalism tends to find ways around such things.

That said, the West did manage something of the sort under OECD auspices during the OPEC embargo of 1973-74 (which I've written about here several times, drawing various conclusions). The organisation that coordinated this was a small unit in Paris that later became established formally as the IEA. It was mostly run by oil company secondees, who truly knew what they were doing, including the use of what was then the world's most powerful commercial computer rig, Exxon's at Florham Park, NJ.

So let's see.

DJK said...

The German refusal to share PPE when it seemed important two years ago has also not been forgotten. AEP in the Telegraph seems to say that all will be well if we just turn the thermostat down this Winter, and take shorter showers --- that, and shut down most of the German chemical industry.

Come the Winter, we'll find ourselves living in interesting times. Britain won't be the only country to undergo regime change as a result of sanctions blowback.

Jan said...

We knew it was a good idea to leave the EU and by their subsequent actions we've been proved right. People moan there have been no benefits to Brexit. Well here is one then. No mandated 15% reduction in gas use for us (although we probably will use less because of the coming price rises).

Putin is running rings round the west and has openly stated he wants to destroy dollar hegemony and is encouraging India/China etc paying for Russian gas/oil in their own currencies. I notice no-one is saying he's ill any longer. He never was and appears to be one of the sanest of the current crop of leaders. He must have been plotting for years and waited for his moment to strike.

It's a pity the west painted him as their arch enemy instead of attempting to accommodate his viewpoint. Ukraine might still be intact.

Elby the Beserk said...

Seems to me that everything that the EU and Germany are being hammered by are the direct result of unbelievable stupidity and consequent damaging policies.

Paul Gosselin, a German, has been recording the unrolling disaster of "Energiewende" for years. Help yourself. I'd say the state he is now in reminds me of the classic Fawlty Towers scene in which Sybil reduces Basil (oh God, remember when the BBC actually made FUNNY comedies) to banging his head on the reception desk.

What sort of ****wit closes down Nuclear plants in apart of the world where their is no seismic activity as a result of the Japanese building there's on the wrong coast.

Merkel. Everything she did was a disaster. So they kept re-electing here.

Elby the Beserk said...

Quillette (excellent as ever) on the catastrophe of Merkel's "Energiewende"

Mostly concentrates o Putin and gas, but it is the obsession with renewables (haha) that is the root of the problem. And refusal to countenance reality, which usually ends in madness. As we are seeing

Anonymous said...

"And refusal to countenance reality, which usually ends in madness"

Quite. It's not the Russians who think men can get pregnant.

dearieme said...

Time to rerun a favourite anecdote? We were aboard a train crossing the North European Plain. We looked out at an array of German wind turbines which appeared to be stationary, every one.

On closer inspection I noticed that occasionally one would briefly start to turn and then stop.

The penny dropped. They were responding to the passing of our train, specifically to the vortices it was shedding. In other words if they generated any electricity that day it was parasitically, drawing the energy indirectly from the grid via our train.

There's a good metaphor in there.

Nick Drew said...

you know that many of said turbines wouldn't be connected to the grid at all?

they get the subsidies just for building them. Operating them is optional, providing they've made a half-hearted attempt to connect them. (But sir, sir, the Greens and NIMBYs objected to the connection cable, so we couldn't ...)

That's Energiewende for you!

dearieme said...

Ihr Götter und kleine fische!

Elby the Beserk said...

Oh look! A Catherine Wheel!

rwendland said...

ND> you know that many of said [German] turbines wouldn't be connected to the grid at all? they get the subsidies just for building them. Operating them is optional

ND, isn't that effectively like the Regulated Asset Base (RAB) contract for Sizewell C our govt is agreeing?

As the RAB consultation says "A potential challenge with this approach is that it would expose suppliers and their consumers to the risk that they provide construction-phase funding for a plant that is never completed."

Also, according to the consultation, there is a "Government Support Package" that covers "low probability but high impact risks that the private sector would not be able to bear". National Grid failing to provide a grid connection on time (as I assume is the German issue) seems to me like such a risk, where the govt would cough up for operator losses while it is resolved.

So aren't we getting into the same territory here with RAB for nuclear?

In the past we've used RAB for lower risk construction projects, eg big sewerage projects, which we are more familiar with and smaller. But the track record with nuclear new build is littered with horrendous overruns and some cancellations, so we seem to be buying into a whole higher tier of risk here.

Ironically, the previous CfD financing model for Hinkley Point C might not be so bad for the consumer in the end, now that electricity prices have rocketed. So the £92.50 + CPI since 2012 per MWh could actually turn out to be a small win for the consumer, rather than triple the price of alternatives. Which would be to my amazement!

Anonymous said...

"Putin is better at Realpolitik than the West" + "Russia has the upper hand in geopolitics at the moment, but they planned this for a long time and are executing this well"



Check again in December.

Nick Drew said...

Mr W - yes, RAB territory. I'll post on RAB / SZC in a day or two

Don Cox said...

"It's not the Russians who think men can get pregnant."

No, but it's Putin who thought (a) that he had a right and duty to invade Ukraine and (b) that it would be a walkover. Folly and ignorance are widespread.

Don Cox

Curious said...

Only came here for the energy stuff but thanks to @rwendland for his comments and explanation of RAB (more please)

If, as explained, RAB has an important place in infrastructure planning, could it not have a place in event planning such as pandemics or shortages (other than energy shortages)

Or does RAB exist elsewhere but it is not publicised.

Nick Drew said...

Curious - see @ 1:55 pm above

Thud said...

I was not aware this site had such a man crush on Putler, I am now.