New strains hit Europe’s energy systems while the US fights to invest in next generation solutions, and struggles at the upstream. Plus, we have a breakthrough in nuclear fusion, hope that inflation might be easing (kind of), Japan’s new defense strategy, and a growing chip export curb alliance.
Falling temperatures and rising demand are adding strains to Europe’s energy systems. Earlier this week, France avoided outages by relying on a ramp up in supply from nuclear and hydro, as well as imports from nearby countries including Germany and Belgium. And while Europe has enough energy to make it through the year, the risk of shortfalls of as much as 30 billion cubic meters of natural gas will continue to loom over the continent into 2023, say the International Energy Agency and European Commission.
Complicating matters is the fact that Qatar, which Europe has turned to for LNG supplies to replace Russian gas, is now embroiled in a corruption probe rocking the European Parliament. The Parliament’s president, Roberta Metsola, has made it clear that the bloc would consider spurning Qatari energy as a result of the bribery scandal. “We are Europeans, we would rather be cold than bought,” she said this week. Germany, perhaps predictably, wants to maintain gas supplies from Qatar, saying energy and corruption are “two different things.”
Meanwhile, the EU this week again delayed a decision on a natural gas price cap. Member states are split: Those desperate for a cap say it would shield their economies from sky-high energy prices, while Germany, Austria, and the Netherlands fear that a cap could divert cargoes away from Europe, disrupting the bloc’s energy markets.
One piece of good news is that some countries have managed to curtail energy use. France, for example, cut its gas consumption by 10.5 percent year-on-year in the August to December period. But there’s a long way to go: According to the European Environmental Bureau, a network of citizens’ organizations, eight out of 27 EU member states haven’t introduced any measures to cut gas and electricity use in households, businesses, and public bodies.
Another incoming curveball: Switzerland’s cabinet is mulling curbs on electric vehicle usage in the event of energy crunches. Auto-schweiz, the country’s car importers lobby, this week warned that such a measure would only crimp EV sales and incentivize consumers to opt for internal combustion engine cars — further entrenching the country’s dependence on fossil fuels.
EU imports of LNG from Qatar, monthly