Exports from Russia, which typically supplies the E.U. While China has gotten a fair amount of media attention for this practice, Bradshaw noted that other Asian countries, including Japan, India, and South Korea, have been doing the same.Īll of that has left Europe and the U.K. natural gas export market is small, a steadily growing volume of the LNG we send overseas is being bought up by China. It signed short-term contracts for liquified natural gas (LNG) with countries including Russia and Myanmar, bringing its overall imports to a record high in August. enshrined 2035 emissions targets into law and launched record subsidies for renewables, all while reckoning with the 2017 shut down of its largest gas storage site in the North Sea (the country now has enough gas stored to meet the demand of four to five winter days, The Guardian reported last month.)Īs part of this endeavor, the country has taken to buying up liquified natural gas stocks from other countries in a “ buying spree” that has left much of the U.K. set its sights on increasing renewables’ share in the energy mix to 40 percent by 2030 the U.K. passed federal tax incentives for wind and solar, reducing demand for natural gas and disincentivizing both production and financing for producers the E.U. In that time, a few things happened to exacerbate the problem: growing recognition of the gravity of the climate crisis led individual nations and jurisdictions within them to place greater emphasis on building out renewables while phasing out coal and natural gas the U.S. The U.K.’s natural gas futures also grew by nearly 800 percent in the same period. Europe has seen natural gas follow a similar, but much starker trajectory: In April, of 2020, Dutch natural gas futures were around 13 euros per megawatt hour they now cost around nine times that. Now at $6.2 USD per metric million British Thermal Unit (mmBTU), the value of natural gas is the highest it’s been since 2008. The U.S., for example, has seen natural gas futures grow to around six times what they were in June of 2020. Here, Motherboard explains everything you need to know about the surge in natural gas prices. The web of actors in the global natural gas crisis are many and complicated-the impacts of a shortage even moreso. “But there's also, I think, an underlying story about this is the beginning of the problem of not managing the energy transition.” “There's a storyline that this current thing is a sort of perfect storm of a set of circumstances that weren't anticipated and probably won't be repeated,” said Michael Bradshaw, professor of global energy at the University of Warwick Business School. This is concerning, because as winter approaches in the northern hemisphere and countries rally around renewable energy and emissions goals, securing the grid is proving increasingly crucial. The common denominator between all of these strained industries is a crucial, yet perhaps unexpected commodity: natural gas.Ī confluence of factors, and political entities (governments of China, Russia, the U.S., the U.K., and the E.U., to name a few) have coalesced and caused global natural gas prices to surge to record highs.
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