FuggleyBrew t1_j9bqvmj wrote

> The EU hasn’t increased its LPG storage facilities. That will take years.

The EU increased it's gas storage, not it's capacity but total amount stored. Including storing compressed gas, enabled by purchasing LNG. Had it not been purchasing LNG it would not have been able to fill its storage, had it not decreased consumption it would not have been able to fill its storage.

>LPG is held at ports, converted into natural gas then piped into the distribution grid.

It's pipelines are part of the storage, as are the storage facilities connected to those pipelines.

>Dear god, why are you are tripling down on not knowing the least about the subject, it’s like having a conversation with the dunning–kruger effect.

You're ignoring official sources about what the EU did from the European Union itself.

>Some time in the past 12 months you clearly came up with the idea that the EU had no gas or oil fields. That they were 100% shipping all gas and oil in. I corrected you and you’re upset. Just deal with it

I never claimed that, and you know it. You're plainly ignorant of the very fundamentals of natural gas production and consumption in Europe and are actively spreading misinformation.

  • Europe decreased consumption while maintaining production through high prices, rationing consumption and mandating high storage reserves.
  • Europe simultaneously brought in LNG, because it would not meet it's requirements if it did not
  • The increases in output of some fields are not enough to meet it's full requirement.
  • The Continental EU does not produce enough natural gas
  • Norway increasing production 8% doesn't make up for a 25% shortfall.
  • To meet their requirements they cut back consumption, purchased a massive amount at a premium through the summer, and increased production
  • Next summer they will have to continue the rationing, imports of LNG, and continue looking for new sources

This year we had a mild winter, that's no reason to assume there will be another mild winter next year. Refilling the storage will require ongoing high prices and ongoing rationing (either explicit or driven by the prices), although likely without the peaks being quite as high this time.

It is going to take time for the US and other countries to meet the requirements of Europe. Some LNG terminals are coming online but not enough soon enough and not enough tankers soon enough. Until that works itself out things prices are going to need to stay high and emphasis in North America needs to be on expanding export capacity and building up internal shipping capacity.

Nordstream 1 was 60 bcm/year, Norway increased production 8-10bcm/year. Where do you think the rest of the gap was? A decent chunk of it came from slicing around 10% of consumption back from April to September (note: this is not the benefit of winter).

That consumption cut will likely have to remain for the near future.


FuggleyBrew t1_j9bf1hn wrote

> That’s 15% of consumption at most, and it’s simply giant tanks that are filled from the existing gas and oil fields. Holding areas

Also filled from LNG imports, and not just storage tanks, also placing gas back into continental formations. When Europe was increasing it's natural gas storage, this is what they were doing.

>You’re confusing the capacity of the distribution network with it being the source. The reason for the increased retention in the network was to force utility companies to buy at the market rate, and not run at low capacity hoping the price would drop.

The increase in reserves was to ensure that volume was purchased and brought local to Europe because during the winter demand would exceed production and imports, so they needed to store it. They could only achieve this through a combination of lowering consumption and increasing production and import capacity. Europe does not produce enough natural gas to meet its own demand.

>Gas reserves is absolutely not the right term. You clearly have no idea what you’re talking about and instead are google shit to try and back up your error.

You're clearly upset over the distinction between proven reserves and the amount they have in their current storage (the reserve they increased). You know the distinction between the geological reserves and their current storage reserves. You're engaging in this semantics argument solely to cover your own ignorance of the European market.

Want to call it storage? Don't care. You're wrong about the fundamentals.


FuggleyBrew t1_j9ahtmy wrote

Natural gas storage is a thing which exists. In fact you even use old, now defunct formations for storage. Quite literally placing natural gas back into old formations building them up again.

>The regulation has been swiftly implemented. In September 2022, the EU had its storage facilities filled by 80% on average. In October 2022, filling level reached 90%. In December 2022, gas reserves started to be used up due to the weather, but as of January 2023, the filling level remains above 80%.


Gas reserves is the appropriate nomenclature here.


FuggleyBrew t1_j9agnx5 wrote

>I have no idea what your point it.

You are celebrating far too early

> It was an extremely mild winter across Europe, so consumption was less than forecast

That decrease was through the first 8 months of 2022, that curtailment was due to decreased demand in the face of sky high natural gas prices. That allowed Europe to build the reserves it needed. Through next summer it needs to rebuild those reserves, which means ongoing elevated prices.

>The EU does not need LNG facilities, that’s simply a cheaper import than the existing EU fields provide. An alternative, not a necessity.

LNG is absolutely a necessity, without it Europe would basically give up being a modern economy. 40% of their gas comes from LNG

>The EU's overall LNG import capacity is significant (around 157 bcm in regasified form per year) – enough to meet around 40% of total gas demand. However, access to LNG infrastructure is uneven across the EU

For reference Norway is looking at 122 bcm and that's what it can produce for the next four years. The existing EU fields are running at near their maximum throughout to Europe, if the Netherlands empties out their remaining on shore reserves they will literally sink into the sea. Pipelines which were operating last year are gone, likely never to operate again. Your celebration is woefully misinformed and way too early.

>But to go back to your original point, Europe did not ‘build up reserves’. The reserves were formed 10 between 180 million years ago.

Europe bought gas on the market and placed it into storage facilities. It literally involves compressing gas into empty formations and storage vessels from overseas imports such as LNG, as a result Europe built reserves. Even the Norwegian gas, getting it from the formation to the continental reserves is a necessary activity each year, because natural gas in a formation offshore does nothing if the line from the North Sea is at full capacity.

They built line pack, all involved in taking gas from all of its sources and putting it into continental reserves.


FuggleyBrew t1_j9aalt1 wrote

>European natural gas prices and Asian spot LNG prices spiked to record highs in the third quarter of 2022. This reduced gas demand and incentivised switching to other fuels such as coal and oil for power generation. In some emerging and developing economies, the price spikes triggered shortages and power cuts. Europe’s gas consumption declined by more than 10% in the first eight months of this year compared with the same period in 2021, driven by a 15% drop in the industrial sector as factories curtailed production.


By contrast Norway increased, but less than the decrease in demand:

>The official gas export level for 2022, which has not yet been released, is estimated to be 8% higher than in 2021 (113 bcm), and similar to the record high of 122 bcm exported in 2017.


>It was only the logistics and cost of increasing extraction from the existing fields that was a problem.

Logistics isn't a trivial thing, many gas projects take years to complete. Further, with the demand decreases and the supply increases Europe has largely made it through this winter. You shouldn't take next year's price as the low point as the rationing seems to have worked, but to expect closer to the average of the last year, and both the low and the average are significantly above the long term average.

An LNG Tanker takes 2.5 years to build and shipyards we're already backlogged it is going to take sustained effort from the US and Canada to build gas pipelines, build export terminals and flow gas internationally to offset the impacts. The reorientation will take years.


FuggleyBrew t1_iy6y54q wrote

But instead of the Canadian making 134 and the American making 100, for a skilled worker you're more likely to have the Canadian making 100 CAD and the American making 130 USD, then factor the taxes onto and exchange rate. You cannot assume that its just a difference of exchange rate. Typically you will get a lower offer in Canada even before the exchange rate is factored in.

The government is currently running on the explicit policy that it needs to suppress wages and the central bank is seeking a recession for the express purpose of undermining worker negotiation power.