Appalling prices for oil and natural gas will guarantee Europe’s status as a dark, frozen hell this winter. Manufacturers big and small will fail – are failing already. Unemployment will rise. Countries with gruesome bills for energy imports will sink into recession. And the euro will keep sinking.
This scenario is pretty much accepted as gospel, and most of the data and anecdotal evidence suggests the economic pain will intensify as cold weather boosts energy demand. Almost half the households in the European Union depend on gas for heating, and gas is in short supply as pipelines to Central and Western Europe are cranked shut by the Kremlin in retaliation for the West’s sanctions against President Vladimir Putin’s war machine.
But wait. There is some indication that maybe – just maybe – Europe has already reached peak crisis and that it, not Russia, will have the last laugh. Exhibit A: Europe’s gas reserves. They are building remarkably fast.
Europe is full of underground gas storage sites – generally salt and hard-rock caverns and depleted aquifers and gas fields. The biggest ones are in Germany and Italy. They are slowly filled in the summer, when demand is low, and are depleted in the winter, when demand is high.
For the rest of this column: https://www.theglobeandmail.com/business/commentary/article-the-european-energy-crisis-may-not-be-as-severe-as-advertised/