Here’s what we need to know first.
Russia is the world’s second-largest producer of natural gas (the first in the United States). It has the world’s biggest gas reserves.
Also, Russia is the world’s largest gas exporter, and a lot of countries in Europe, especially Germany depend on Russian gas.
Now, you may know that Russia Invaded Ukraine in February this year. When that happened, many western countries supported Ukraine and also imposed sanctions (penalties) on Russia – in an effort to get it to withdraw.
That didn’t really happen – and now Russia is getting back by cutting the gas supplied to Europe, which is shooting up prices of everything in parts of Europe.
Has Russia cut off all the gas?
No, Russia has shut the main pipeline called Nord Stream 1.
The reduction in Russian gas exports has sent global prices soaring, but Moscow has denied using energy as a political weapon.
Let’s start with the basics
Why is gas needed?
Gas is needed for the following :
- Electricity. We can generate electricity with gas
- Transportation & production (industrial use)
- Water heating
- Air conditioning.
- Lighting a fire.
Gas is an essential requirement in households and industries hence a rise in its price also increases the prices of goods and services.
What is Nord Stream 1?
The Nord Stream 1 pipeline stretches 1,200km under the Baltic Sea from the Russian coast near St Petersburg to north-eastern Germany.
The pipeline is owned and operated by Nord Stream AG, majorly owned by the Russian state-owned company – Gazprom
Germany had also previously approved the construction of a parallel pipeline – Nord Stream 2 – but the project was halted after Russia invaded Ukraine.
How has Russia cut supplies?
Starting from May, Gazprom has either been closing or bringing down the supplies, giving various reasons, from the need for maintenance to faulty equipment. Now it has completely halted the gas supply.
Why has the pipeline shut?
The latest reason for closing the Nord Stream pipeline, says Russia, is a leak that has been detected in a turbine.
Russian President Vladimir Putin’s spokesman has said that western sanctions (in simple words – a penalty or punishment imposed by foreign countries on Russia for the invasion of Ukraine) have played a part in the gas pipeline interruptions.
Gazprom has said missing documents have prevented certain gas turbines from being maintained.
How is it hurting Europe?
Europe – and in particular Germany – depends on Russian gas to meet its energy needs.
When Russia announced that it was going to cut supply in July, the wholesale price of gas in Europe went up by 10% in one day. This in turn will affect the economy of Europe, and prices of goods and services will go up. People will end up losing their jobs and unemployment will increase.
Can the European countries cope with the cut off ?
- The EU ( European Union) has worked out a deal in which member states cut usage by 15%.
- The German government hopes to reduce gas usage by 2% by limiting the use of lighting and heating in public buildings this winter.
- Spain has already brought in similar rules and Switzerland is considering doing the same.
- Many European citizens are also taking steps themselves.
- In Germany, people are buying wood stoves and installing solar panels. Everyone is taking action to reduce their use of gas.
That’s what’s happening now. It’s going to be a hard winter for parts of Europe.
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