Soaring energy prices - how to react?

States must avoid sending the message that they will protect their citizens from rising prices forever, Handelsblatt warns:

“Because they're planning the opposite. ... Energy prices must be high - and continue rising. But they should be as predictable as possible. That would enable consumers to make an informed decision when they invest many thousands of euros in a new car or a new heating system. And it would allow governments to precisely manage the social equilibrium - via higher welfare payments, lower taxes and lower non-wage labour costs, or even via an energy allowance paid out as a lump sum to every citizen.”

Last week, the European Commission presented a toolkit that states can use to regulate prices without violating European competition rules. Večer comments:

“Until now, the Commission has relied exclusively on competition and the market, where price is determined by supply and demand. The neoliberal ideology, according to which everything is regulated by the market, has now officially collapsed in the energy sector as well. To ensure that a large proportion of households even in the richest EU member states don't freeze in their homes this winter and that companies are not forced to restrict production, 'Mother State' must come to the rescue.”

The green energy transition is robbing the economically disadvantaged of their civil rights, former Portuguese MP Joana Amaral Dias argues in Diário de Notícias:

“If this continues, soon only the rich and the thrifty will be able to drive. ... Only those who have plenty or lots of money will be able to either pay these unaffordable fuel prices or change cars, opting for a different technology. That's how it is now: the energy transition has been forced through without considering alternatives. And without guaranteeing that those who need a car will not be deprived of a vital means for their existence, mobility and independence; that they will not be robbed of an important civil right.”

Diena is surprised that Latvia's government has no plans to react to the rising prices:

“The Minister of Economics says there is no need to talk about the increase in prices or a lack of energy sources. No doubt his family isn't threatened by the crisis. But for a typical family in Riga the situation is different. Gas rates have gone up by 42 percent since July 1, and electricity prices by 10 to 42 percent. Heating costs have risen by 26.6 percent since September 1, and will rise again by 16 percent by November 1. ... It cannot be ruled out that as a result of the high prices traders will have drained the underground gas reservoir in Inčukalns by January, leaving only a fixed reserve for short-term crises. ... Then the economy minister will also feel the cold in his home.”

Lithuania's government wants to freeze energy prices for residents and spread the increased costs over the next five years. Delfi objects:

“If the Energy Minister's prediction that the price increase is only temporary is not confirmed, the higher costs will catch up with people later on. If we cap the prices now, taxpayers will have to support Vilnius's ineffective central heat and power station later on [which still relies heavily on natural gas]. And such price-cutting will also have another future component: it means passing the bill on to the next government. Heat today, pay tomorrow. Let others deal with the cost problem.”

The price of natural gas shot up to record levels on Wednesday, only to drop again drastically - allegedly after an offer by Putin to help stabilise the market. Russia's president holds all the trumps in this crisis, writes NRC Handelsblad:

“If he closes the gas tap even further, everyone knows who's boss. But if he opens it again he's a hero - and he makes money as well. ... European leaders talked for hours on Tuesday about Europe's independence in security and economic matters. It is wise to continue this conversation. While there is panic in the EU about an imminent energy shortage, all it took was a nod from Putin and prices dropped. In the long run there is only one way to break free from this grip: promote alternative energies.”

Energy independence is central for Europe, Jutarnji list explains:

“At a time when the EU is discussing 'strategic autonomy' in order to be less dependent on others in the political as well as defence and security spheres, many within the EU warn that all this will be for nothing if it doesn't increase its energy independence too. As much as the EU has worked on this in recent years, dependence on external factors, especially Russia and the Middle East, is still too high.”

Corriere della Sera doesn't believe that the EU will find a common solution at the European Council meeting at the end of October:

“A group formed by France, Spain, Greece, the Czech Republic and Romania is pushing for a quick response from the Commission and coordinated solutions on topics ranging from energy market reform to joint gas purchases and storage. The countries of the north, but also Germany, Belgium and the Netherlands, are more cautious, as became clear at yesterday's meeting of environmental ministers from several EU states. The German minister Svenja Schulze explained that attempts to influence the free market meet with much scepticism in her government.”

Iltalehti stresses:

“Investments in renewable energies and energy efficiency are necessary, but at the same time the EU will need nuclear power for many years to come. This is the only way to implement climate measures without putting excessive pressure on people's finances. Currently, a quarter of Europe's electricity and almost half of its CO2-free electricity comes from nuclear power. However, there is the danger that nuclear power will be considered an evil that should no longer be invested in simply for political reasons . ... The EU must be careful not to create a system in which citizens' electricity bills rise while emissions and political instability increase for ideological reasons.”

To protect both private households and businesses from bills they can't pay, Athens should take its cue from Sofia, writes the web portal In.gr:

“Heating allowances are one solution for households. They could bring great relief for the average Greek family provided the criteria for granting them are expanded. But the question is how businesses will obtain aid to ensure that the increased energy costs are not passed on to consumers. Some countries are already considering measures to help businesses. The most recent example is Bulgaria, where the transitional government has offered them 330 million euros in subsidies to alleviate the pressure of high electricity prices.”

The rising prices for dirty energy are a deliberate strategy, De Standaard explains, warning against easing the burden on private households as the Belgian government now plans to do:

“Higher prices for fossil fuels are the path the world has chosen to make greener energy more competitive and reduce CO2 emissions. ... The question is how sensible it is to simply let the extra money [collected via the energy tax] flow back into all the citizens' pockets, and whether it wouldn't be better and more cost-effective to use it as leverage for lower and greener consumption. That's the direction in which the Green Deal is pointing all EU countries anyway: use taxes on fossil fuels to boost green energy.”

The soaring natural gas prices pose a threat to the climate targets, explains Novi list:

“In China, energy consumption is suddenly much higher than energy production, which is why the government has already started cutting off power to industry and a smaller percentage of households. Beijing, however, is ordering utilities to provide enough energy for this winter at any cost. Since China is one of the world's largest consumers, prices for natural gas, coal and oil are likely to continue to rise around the world in the coming weeks. In addition, large consumers in Asia and Europe are switching to oil and reactivating coal-fired power plants because of the high price of natural gas. In the short term, this will disrupt countries' plans to switch to clean energy and could also hinder the success of the climate conference in Glasgow.”

De Volkskrant laments that the world has lapsed into a fatal dependency:

“Fossil fuels keep reprehensible regimes in power. They have created a climate crisis whose scale appears to be paralysing politicians. They have led to a destructive race. ... Meanwhile, the Western world has closed down nuclear power plants, the most stable sources of energy, or refuses to build new ones citing the potential dangers of nuclear technology. The real damage of consuming fossil fuels was seen as a lesser evil. The outbreak of the umpteenth energy crisis raises the question of whether the risks should not be weighed against each other again.”

In Spain, gas supply shortages are causing major problems on several fronts, explains El Economista:

“The problem is that the ships [bringing methane gas from the US to Europe] are in high demand right now because of the hoarding policies of large Asian economies like Japan and China. ... As a result, fewer US tankers will reach the Spanish coast, and Spanish imports via this route will drop by a third. This is a substantial reduction that coincides with a perfect storm: the Maghreb gas pipeline is being shut down due to disagreements between Algeria and Morocco, and Russia is refusing to supply more gas to Europe via Ukraine. ... It's too early to tell whether that will lead to shortages in Spain.”

Europe must become more independent of gas imports, demands Jutarnji list:

“Can one really assume that Russia will cooperate in Europe's great energy transition, the ultimate goal of which is to eliminate precisely the need for one of Russia's main exports? In this context it makes little sense to demonize Gazprom; it would be more pragmatic to analyze all the wrong steps that have brought Europe into such a situation. The most important conclusion for European governments - including the Croatian one - would be to accelerate all projects aimed at creating local gas reserves. The quantities are very limited and cannot come close to satisfying European needs. But every cubic meter of gas produced in Europe means one less that has to be imported.”

The Frankfurter Rundschau draws two conclusions from the soaring prices:

“First, the expansion of renewable energies must speed up. Secondly, a we need a natural gas strategy. The fossil fuel will play an important role for another decade and a half. After that, its use must be rapidly reduced if zero CO2 emissions are to be achieved. In other words, we need an expansion strategy coupled with an exit strategy. But so far there's little sign of this.”

Maaleht recommends that Estonia and the Estonians finally make serious investments in wind energy:

“The day each of us has a share in a wind turbine in our pocket could be a signal that we've understood where the world is going and why. Right now all we're arguing about is whether a wind turbine situated ten kilometres from the beach should be banned because it spoils the view. The one thing everyone ultimately agrees on is that we should pollute the environment less: Produce electricity without clouds of smoke - from wind, for example. And looking at Denmark, which is about the size of Estonia, the world pioneer of wind energy. It's always worth learning from neighbours.”

For Kommersant, the outlook for this energy source is unclear despite the high prices:

“Very few new gas production projects or long-term supply contracts have been announced this year. One can understand the buyers (who would sign a contract at current prices). But the hesitation of the producers clearly shows that the global gas industry either has little faith in the stability of current prices or no faith in the future of the industry. How could it, when gas has officially been branded a 'transition fuel', with 20 years left at most? And when Western politicians - and increasingly shareholders - expect companies to radically reduce their carbon footprint.”

Rzeczpospolita is delighted that Poland is better prepared than Western Europe:

“The record gas prices on European exchanges, which are climbing higher every day, are the result of measures taken by Gazprom. ... Russia is trying to impose further exemptions from EU rules and create a loophole in the Gas Directive so that more natural gas can be pumped via the recently completed Nord Stream 2 pipeline. Whereas Western Europe is worried about winter and its storage facilities are still not filled, Poland can sleep soundly. Our tanks were full even before the price hike, and we can buy gas from other sources because we have the necessary infrastructure. Not with us, Vladimir!”