COTW: Europe Finds Alternative Gas

At the beginning of the war on Ukraine, the EU was dependent on Russian natural gas supplies.  Putin knew this, so began using natural gas as weapon against the west for its support of Ukraine's fight against aggression.  Northern European nations began searching for alternative supplies last summer to replace Russian cutbacks.  This chart of the benchmark Dutch natural gas futures, shows how they are performing:

From a spike in August,  futures are now trading at €82/MWh, down 77%.  The plunge in price is caused by two factors, a reduction in demand (conservation) and new sources of gas supply.  LNG imports from the US have surged. Norway has increased its production by 8% over last year to record levels.  The NATO nation supplies the most natural gas to Europe.  New infrastructure has also been constructed.  In an amazing engineering feat, Germany built an LGN terminal and 26 miles of pipeline in 5 months.  Storage facilities are close to capacity:  Germany, France, Belgium, and Denmark are all over 80% full.  Austria is at 90%.  Russia is loosing a lot of money in the face of European resolve.  It cannot sell its supply to other customers because the distribution network is fixed, and there are no LGN export facilities linked to the production sites.  

This is good news for Ukraine.  Europe is not feeling pressured to abandon its support because of a manufactured energy crisis.  Ukraine continues to win on the battlefields. Its forces on are on the verge of retaking another major Donbas town, Kreminna.  Observers say if the town is recaptured, the entire Russian front line could collapse since it offers a direct path to the industrial cities of Sievierodonetsk and Lysychansk.  Ukraine's courageous soldiers continue to hold on to Bakhmut despite what both sides describe as a "meat-grinder" in the bitter cold.  President Zelinsky should be careful not to overplay his hand, however. Retaking the Crimea by force will be a Herculean task.  Putin indicated that he was ready to talk now that his army has suffered devastating losses in men and material.  Zelensky will do well to call his bluff.