Natural Gas Chatter

 There is an excellent piece in Focus this morning, which talks to the natural gas crisis in Germany, and the trade-situation with Russia. 

For those who haven't grasped it....Germany brings about 37-percent of it's natural gas requirement into the country from Russia....via a pipeline that is around fifty years old. Back a decade ago....lot of talks occurred, and several companies (German and Russian) put the money up to build Nord Stream II....a pipe that would run under the Baltic Sea....to the German northern coast.  

Somewhere around the 80-percent done level....President Trump made a number of comments that Germany would be in a dire situation if relations went sour.  A lot of German political figures got hyped-up....angry, and it just added to the long list of reasons why they hated Trump.

Without any state money from Russia or Germany....the project wrapped up about six months ago.  The Russians wanted the Germans to just certify it, and be done.  Well...something came on the paperwork.  The Germans noted that it wasn't a German company submitting the paperwork....it was coming out of Switzerland.  They said no.....you need to submit this under a German company.  Things kinda stalled then.

Around two months ago....this rumor of a Russian invasion into the Ukraine started up.  That didn't really help matters.

The fact that Trump was completely right (at this point)?  It's best not to bring this up.

Is a crisis brewing?  I would recommend a read of the Focus piece.  There is additional natural gas coming in from the US, and extra gas flowing from Africa to southern Europe.  If you asked me about pricing?  I'd say prices are currently escalating.

If a severe cold snap came in for four weeks?  It'd be a major problem for Germany....the reserves simply aren't there.

Are the Russian natural gas oligarchs worried?  I would suggest that they are huddled there and looking at the income levels.....they aren't making the same profit that they did from 2021, and this Nord Stream II project is a big chunk of investment which may fail now.  

Over the next six to eight weeks, this is probably a bigger problem than Covid, and will shock a few Germans on how fragile the system really is.  It'll also shock some to be reminded that Trump was right on this one occasion.