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The only short-term solution to Europe's worsening gas and energy crisis is a widespread reduction in gas consumption, a top executive of Norway’s major Equinor told Reuters on Tuesday.
Norway, which supplies the EU and UK with 20%-25% of their needed gas supplies, is expecting record natural gas sales via pipelines to Europe this year and has already overtaken Russia as the EU’s biggest gas supplier.
This summer, Norway approved plans for three gas field developments that will further increase production from the Norwegian Continental Shelf in the short to medium term after having approved applications from operators to boost production from several operating gas fields.
Despite Norway’s efforts to help its allies in the EU with more gas supply, its exports and resources cannot offset the reduced supply to Europe via pipelines from Russia. Gazprom halted last week all gas flow via the Nord Stream pipeline to Germany, and the Kremlin said on Monday that Russian supply via Nord Stream would remain shut until the Western sanctions that impede gas turbine repairs are lifted.
“In case the Russian volumes halt completely, the demand reduction needs to be even larger than what we so far have experienced, and no price cap or anything like that can solve the underlying problem,” Helge Haugane, Equinor’s senior vice president for gas and power, told Reuters in an interview published on Tuesday.
Many EU governments have already drafted plans for a reduction in gas consumption, and the EU has a (still voluntary) target for member states to cut demand by 15% in order to survive the coming winter without power outages
Reducing demand “is very hard political work for those who can do something about that....but there is no other fix in the short term,” Equinor’s executive told Reuters.
Later this week, the energy ministers of the European Union are set to discuss price caps on natural gas as one of the measures to fight excessive energy prices across the bloc.
By Michael Kern for Oilprice.com
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Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com,