LNG: Germany preparing for LNG imports

 With Russia as designated gas provider falling out due to the russian invasion of Ukraine and president Putin's unpredictable behaviour, Germany is carrying out a change in gas import, more precisely turning to US LNG (WELT):

On the high seas, in the middle of the Indian Ocean, the "Minerva Chios" suddenly changed course. The ship came from the USA and was almost there, but then it turned 180 degrees, turning from south-east to north-west. The captain had been assigned a new port. He should no longer head for Asia, as originally planned, but for Rotterdam. Apparently someone in Europe was offering more money for their cargo.

The "Minerva Chios" was loaded with liquid gas or "Liquefied Natural Gas", as it is called in the industry, LNG for short. These three letters have been at the center of world politics since the beginning of the Ukraine crisis. It's about the question of where millions of Europeans should get the raw material with which they heat and operate many of their power plants.

Because Russia, the most important gas supplier for Germany and the entire continent, has made itself an outsider by attacking Ukraine. An unpredictable aggressor who can no longer be trusted. Germany must look for alternatives to Russian natural gas, says Federal Minister of Economics Robert Habeck (Greens), otherwise you will become "a pawn".

Germany: chancellor announces construction of two LNG terminals

 In the light of the russian invasion into Ukraine german chancellor Olaf Scholz operates a reversal of the german energy policy. In a government declaration chancellor Scholz announced alongside a considerable raise of the defefense spendung also the construction of two LNG terminals, namely in Wilhelmshaven and Brunsbuttel where terminals never got beyond the project phase. WELT:

Chancellor Olaf Scholz (SPD) has announced a massive increase in German defense spending in response to the Russian attack on Ukraine.

The 2022 federal budget should be provided with a one-time special fund of 100 billion euros for “necessary investments and armament projects”, said Scholz in his government statement on Sunday in the Bundestag. He added: "From now on we will invest more than two percent of the gross domestic product in our defense every year."

To reduce dependence on Russian natural gas, Scholz announced the construction of two liquefied natural gas (LNG) terminals in Germany, naming Brunsbüttel and Wilhelmshaven in Schleswig-Holstein and Lower Saxony as locations. In addition, a coal and gas reserve should be built up.

An LNG terminal that receives gas today can also receive green hydrogen tomorrow, said Scholz. Although there are many terminals for liquefied natural gas in the EU, which comes from the USA or Qatar, for example, there have not been any in Germany so far.

Nord Stream 2: german chancellor stops pipeline project in reaction of russian invasion into Ukraine

 WELT:

As a reaction to the Russian actions towards Ukraine, the federal government is stopping the Nord Stream 2 pipeline project. Chancellor Olaf Scholz (SPD ) on Tuesday in Berlin. "And without this certification, Nord Stream 2 cannot go into operation."

Scholz condemned President Vladimir Putin's decision to recognize the self-proclaimed People's Republics of Luhansk and Donetsk as independent states as a serious breach of international law. With his actions in eastern Ukraine, Putin is not only breaking the Minsk Agreement, but also the UN Charter, which provides for the preservation of the territorial integrity and sovereignty of states.

Nord Stream 2: the curious deals of the mecklenburgian foundation for climate protection

 The state of Mecklenburg-Vorpommern in the north of Germany has created a foundation for climate protection quite accurately one year ago. This foundation, the Stiftung Klima- und Umweltschutz MV, is seen as remedy to handle possible sanctions against operators and involved companies. However the object of the foundation and the backers are obscure. Recently the foundation purchased shares of a limited shipping company, the MAR Agency GmbH. The goals and intentions of this company are more than obscure. Traces lead to puppet-masters of Nord Stream 2, writes WELT:

Siegfried Kempe can look back on an adventurous life. The man from Mecklenburg had already sailed the seven seas as a sailor in GDR times. Later he maneuvered tugboats into the port of Rostock. In August 2018 it was over, retirement at the age of 63.

The local magazine "Der Warnemünder" paid tribute to the captain a. D. as someone who was a very educated man and gave good advice for retirement. But then everything turned out differently, Kempe was suddenly needed again. He should have a role in a play set on the grand stage of world politics.

The sailor is now an actor in the endless drama about Russian natural gas, American sanctions and German fickleness. However, hardly anyone knows, because Kempe acts behind the scenes. It's about the state-owned company Gazprom and its controversial pipeline in the Baltic Sea.

The commissioning of the line, which is now almost complete, was and is in jeopardy: First by punitive measures under the aegis of Donald Trump, now by Vladimir Putin's demonstration of power at the Ukrainian border.

In order to save the project, the state government of Mecklenburg-Western Pomerania and the Gazprom subsidiary Nord Stream 2 AG (NS2), which is responsible for the pipeline construction, have devised a sophisticated construct. And the name Kempe appears in it.

Germany: high energy prices strain steel industry

 German steel producers complain about high energy prices and the planned new mechanisms of emission trading that will have a negative impact on competitiveness (WELT):

The steel industry in Germany is struggling with high energy costs. "In the last six months alone, our expenditure on electricity and gas has increased by a three-digit million amount," reports Bernhard Osburg, CEO of Thyssenkrupp Steel Europe.

And his company has the advantage of only having to buy a small amount of energy. "We currently produce two thirds of the electricity ourselves," reports Osburg at the "Handelsblatt annual conference on the future of steel". The cost explosion arises only with the remaining third.

For the industry as a whole, the Steel Industry Association puts the additional costs at around 1.7 billion euros at the current high price level for electricity and gas. "This endangers the international competitiveness of electric steel production, which will also play a decisive role in the climate goals of the federal government," warns Association President Hans Jürgen Kerkhoff. Especially since Germany already has one of the highest electricity prices in an international comparison.

But Kerkhoff does not just worry about the here and now. "The high energy prices are also jeopardizing the start of the planned transformation of the steel industry," says the industry representative. Because that requires a lot of energy.

So far, the industry has been one of the biggest climate sinners in Germany. Almost 60 million tons of CO₂ are emitted every year in steel production, which alone corresponds to a third of industrial emissions in Germany. In order to drastically reduce this number and to become almost climate-neutral in the future, manufacturers are planning new production processes.

“Green steel” is the corresponding catchphrase. This means that production is no longer carried out in the classic blast furnace, but in direct reduction plants. In contrast to the usual blast furnace route, so-called reduction gases, which extract the oxygen from the iron ore, are not produced with coking coal, but in the first step with natural gas and then with hydrogen in the future, produced with electricity from renewable energy. "This enables a CO2 reduction of 95 to 97 percent," says the think tank Agora Energiewende, which specializes in the electricity sector.

All major steel producers in Germany have had corresponding pilot plants for a long time. However, the actual conversion will cost a lot of money, estimates in the industry range from 20 to 30 billion euros. And investing in the systems is not enough.

At the same time, the energy requirement increases many times over. "Because the transformation of the steel industry is based on electrification, electrolytically generated hydrogen and natural gas as a low-CO₂ transitional raw material," explains expert Kerkhoff. Due to the high energy prices, there is now a risk of a drastic increase in costs. Because by 2030 alone, the demand for natural gas will increase by two thirds and the demand for green electricity will even triple.

The example of Thyssenkrupp shows how gigantic the quantities are in the final stage. The German market leader currently needs around 4.5 terawatt hours of energy for its plant at the Duisburg site – incidentally the largest steel plant in Europe. "If we produce in a climate-neutral manner, this need will increase tenfold," announces Steel Division boss Osburg. For comparison: According to the company, the 45 terawatt hours required then correspond to 4.5 times the electricity requirements of the city of Hamburg.

That is a gigantic amount. And unlike today, that would have to be bought in completely. "But we will not be able to do this alone, either as a company or as an industry as a whole," says Osburg. Rather, compensation is needed via the climate protection agreements planned by Federal Minister of Economics Robert Habeck (Greens).

Steel President Kerkhoff is also calling for state aid. "Politicians must not just look on, but should develop solutions in dialogue with industry on how gas and electricity prices can be kept at a competitive level for industry," demands the industry representative. Especially since the energy cost problem is by no means the only source of danger for the industry.

Burdens from European emissions trading. The EU is currently discussing a far-reaching revision of this mechanism. And the proposals currently being discussed provide for the gradual abolition of the free allocation of CO₂ certificates. According to the Steel Industry Association, there is a risk of additional costs of 16 billion euros per year - in addition to the investments in systems and the additional costs for energy.

“But that would take away the economic power and investment leeway that companies need for the transformation,” warns association leader Kerkhoff. The companies themselves complain about that. "It takes our breath away," says Thyssenkrupp manager Osburg. "Merging off free allocations and investing in the future at the same time - that can't work."

Geert van Poelvoorde also finds clear words. "You have to ask yourself whether the steel industry still has a future in Europe," says the European boss of ArcelorMittal, the world's largest steel manufacturer. “More pressure will not accelerate the transformation. On the contrary: the steel industry is being deprived of the means to switch production to green.”

Especially in connection with the high energy prices. Van Poelvoorde expects the costs for electricity and gas to normalize step by step. However, the price will not drop to previous levels. And even that has an impact. His company has a plant in Hamburg that will initially produce climate-friendly steel with natural gas and later with green hydrogen. “At the moment, however, we cannot operate this plant competitively. With the current electricity prices, it would stand still.”

However, a constant start-stop mode will not work. And what that can ultimately mean is shown by another example from the ArcelorMittal Group. "We just had to close a plant in Poland, also because the electricity costs are too high," reports van Poelvoorde.

The manager sees Europe as a steel location at a crossroads. "2022 will decide how big or small the European steel industry will still be." The EU must decide whether to support the transformation and thus the decarbonization of the steel industry with subsidies or not.

In any case, the previous plans in Brussels were not sufficient to ensure the future viability of the industry. "There are enough goals, what we need now are decisions to be able to implement projects so that green steel can be produced," van Poelvoorde very clearly demands support.

After all, in the case of ArcelorMittal, a complete conversion to direct reduction plants involves investments in the order of five to six billion euros. "In the current environment, however, a decision on these investments is impossible."

This is also emphasized by the steel trade association. "The political framework for investments worth billions must be created now," says Association President Kerkhoff. “These large-scale industrial investments require a reliable financing basis across legislative periods.

This is not about long-term funding, but about appropriate support in the ramp-up phase and protection against the enormous risks.” And that as quickly as possible. "Every month that goes by costs competitiveness," says Thyssenkrupp man Osburg. The long-established company wants to commission the first plant that can also produce climate-neutrally using hydrogen in 2025.

"It's a facility that's 150 meters high and costs a little over a billion euros. They don't even build them in 14 days. If we don't step on the gas now, that won't happen.” For such a decision, however, the supervisory board needs well-founded data and acceptable framework conditions.

Politicians are under pressure. Because steel is one of the most important materials and also plays a key role in the German industrial mix, after all, car and mechanical engineering are among the core sectors in this country. And their business is closely linked to steel. According to a study by Prognos commissioned by the Steel Industry Association, a drop of 40 percent in steel production in Germany means the loss of 200,000 jobs and 114 billion euros in added value.

LNG: discordance about the export of US LNG

As an appendix to this article,  oilprice.com writes:

Just as U.S. exports of liquefied natural gas (LNG) serves as the main cog in helping keep the lights on and homes heated in Europe in this windless winter, a group of Democratic senators sends a letter to Energy Secretary Jennifer Granholm urging her and the Biden administration to take action to limit U.S. LNG exports.

In their letter, these 10 senators "...urge the Department to conduct a review of LNG exports and their impact on domestic prices and the public interest, and develop a plan to ensure natural gas remains affordable for American households. Until such a plan is completed, the Department should consider halting permit approvals of U.S. LNG export facilities."

There are several problems with this approach. The first is that, as stated above, Europe is in desperate need of U.S. LNG this winter and likely beyond as its wind industry fails to deliver on its promises. Second is the fact that, despite record levels of LNG exports in recent months, U.S. natural gas production continues to enjoy a steady surplus over demand for it. The U.S. price, currently standing at about $4.80 per Mmbtu at the Henry Hub, is not connected to prices for international natural gas, which in Europe is currently selling for upwards of 6 to 7 times the U.S. price.

The U.S. proven resource of natural gas is equal to hundreds of years of current consumption. Shouldn’t we as a nation should celebrate our ability to pitch in a small sliver of what we produce to help avoid a looming humanitarian catastrophe across the European continent? That crisis was brought on by the wrong-headed energy policies adopted by governments who share the general energy outlook of Granholm, Biden, and this group of senators.

You can read the rest of the piece via the below link:

https://oilprice.com/Energy/Natural-Gas/Democrat-Senators-Are-Trying-To-Limit-US-LNG-Exports-For-All-The-Wrong-Reasons.html

France: France Braces For Blackouts As Gas Stockpiles Dwindle

Oilprice.com: 

The Brits aren't the only European nation to find itself on the verge of a full-blown energy crisis. On Thursday, French natural gas pipeline operator GRTgaz warned that French gas stockpiles are much lower at this point in the year than they have been during years past - and as a result, they run the risk of potentially being depleted before the winter is up, a disaster that could make last year's deep freeze in Texas look tame if a sudden cold snap sends demand soaring.

According to data from Gas Infrastructure Europe, France’s stockpiles were about 34% full as of Feb. 1, which is well below the five-year average of 42%. Inventories are now at the lowest seasonal level since 2018, when a brutal winter cold snap nicknamed "the Beast from the East" left French reserves standing at just 3% when the heating season was over.

"We’ll probably be close to zero toward the end of March, and we remain vigilant on that topic," GRTgaz chief Thierry Trouve said in a presentation in Paris Thursday.

You can read the rest of the piece via the below link:

https://oilprice.com/Energy/Natural-Gas/France-Braces-For-Blackouts-As-Gas-Stockpiles-Dwindle.html

Nuclear fusion: JET scientists report record energy production

 Scientists of the Joint European Torus (JET), Europe's largest fusion reactor, claim to have produced more than twice the energy than the last record measurement in 1997 in a new experiment (Le Monde):

Scientists working at a European experimental facility in the UK claimed Wednesday (February 9th) that they have produced more energy from nuclear fusion than ever before. An alternative to the nuclear fission used in current power plants, nuclear fusion aims to reproduce what happens in the heart of the Sun and is considered by its supporters to be the energy of tomorrow, in particular because it produces little waste. – and much less radioactive than those from a conventional reactor – and no greenhouse gases.

A team from the Joint European Torus (JET), the world's largest fusion reactor, located near Oxford, has succeeded in generating 59 megajoules of energy from this process, more than doubling the previous record set in 1997, according to the UK Atomic Energy Authority (UKAEA). The results "are the clearest demonstration on a global scale of the potential of fusion to provide sustainable energy," the same source said in a statement.

Netherlands: gas orders from Germany lead to discontent in dutch population

 Residents of the Groningen gas field suffer from earthquakes as a consequence of the year-long gas production. Germany however has ordered a higher amount of gas from the field that was bound to be shut down in 2026. The dutch side blame Germany to shift their problems to the Netherlands, hinting at the stagnating certification process of contentious Nord Stream 2 pipeline (WELT):

When René Paas, the Dutch King's commissioner for the province of Groningen, travels to the seat of government in The Hague, every conversation begins with the question: What's the situation with the gas field? That's how he tells WELT on the phone. "Groningen has been associated with the gas production there and the associated problems for years."

Because of gas production, since the 1990s there have been an increasing number of smaller earthquakes that cause damage to residential buildings. In response to the loud protests of the Groningen population, the Dutch cabinet finally decided to initially reduce the subsidy significantly and then stop it in mid-2022. Gas production in Groningen will only continue until 2026 as an emergency solution for cold winters.

A project that Germany is now thwarting. As the “Spiegel” reported, German suppliers have probably ordered 1.1 billion cubic meters more gas for the 2021/22 financial year than planned. In addition, the commissioning of a nitrogen factory, which is to process imported gas for Dutch households in the future, has been delayed.

Nord Stream 2: questions about the peculiar environmental foundation in Mecklenburg-Vorpommern

 Lawmakers of the oppositional green-party in the northern state of Mecklenburg-Vorpommern contest the official objectives of the myster curious foundation for climate and environmental protection "Stiftung Klima- und Umweltschutz MV" that was founded at the instigation of prime minister Manuela Schwesig, staunch supporter of the contentious pipeline. Anti-corruption organisation Transparency International blames the opacity of the organisation, writes WELT:

And yet he doesn't move. After the meeting with President Vladimir Putin on Tuesday in Moscow, Chancellor Olaf Scholz (SPD) was once again unable to bring himself to clearly name the controversial Nord Stream 2 Baltic Sea pipeline as a possible sanctions instrument against Russia. When asked a question, the chancellor said somewhat casually: "As far as the pipeline itself is concerned, everyone knows what's going on."

By this, Scholz means: If Russia intervenes militarily in Ukraine, Nord Stream 2 will not receive an operating license. The Chancellor does not state this clearly, among other things, because influential Social Democrats have different ideas about what is "going on" with the pipeline, also in view of Russian aggression: Mecklenburg-Western Pomerania's Prime Minister Manuela Schwesig (SPD) said at the New Year's reception of the Eastern Committee of the German economy at the end of January, when the current Ukraine crisis had long been smoldering: "I hope for a speedy, rule-of-law procedure so that the line can go into operation." It still does to this day.

Alongside former Chancellor Gerhard Schröder (SPD), the prime minister is regarded as the strongest champion of the gas pipeline. But in view of Schwesig's increasing doggedness, resistance grew. The Greens in the Schwerin state parliament have now handed the state government a comprehensive package of small inquiries that could put Schwesig and other pipeline supporters in an extremely uncomfortable position.

LNG: The US are a new player in the european gas game

 In view of the tensions between Russia and Ukraine and the menace of a natural gas cut off from Russia and the increased will of several european countries to turn away from russian gas, us-american companies take the baton as a supplier of LNG to Europe, writes french newspaper Le Monde:

It was December 2021 when it appeared that Russia was amassing its troops on the doorstep of Ukraine. Suddenly, the Minerva Chios, an LNG carrier from Louisiana, turned around, while it was in the middle of the Indian Ocean. Direction Europe, via the Suez Canal, with its cargo of American liquefied natural gas (LNG). It was the same for the Maran Gas Vergina, coming from Delaware, which was approaching the Strait of Malacca: it turned around to unload in Turkey. The Marvel Crane, which was going to use the Panama Canal for Asia, headed for Spain. The Old Continent, so dependent on Russian gas, suddenly became attractive and shipowners diverted their cargoes to the best buyers.