The CEO of oil and gas giant Shell has warned that gas shortages across Europe may last for several winters and that energy rationing may be required.
“It may well be that we have a number of winters where we have to somehow find solutions through efficiency savings, through rationing, and as a very, very quick build out of alternatives,” he continued. “That this is going to be somehow easy or over, I think is a fantasy we should put aside—we should confront the reality.”
His comments come as Europe is facing an energy crisis prompted by its decision to reduce dependence on Russian gas combined with Russia reducing supplies to the EU.
Russian gas giant Gazprom will also be shutting down the Nord Stream 1 pipeline, which brings Russian gas to Europe via Germany, for three days of maintenance starting Aug. 31. Gazprom previously shut down the pipeline for 10 days of “annual maintenance” in July.
‘Emergency Interventions’ to Be Rolled Out
Overall storage was at 82.74 percent capacity as of Aug. 29, according to the Federal Network Agency’s latest report. According to government regulation, storage must be at 95 percent capacity by Nov. 1.Soaring gas prices are driving the bulk of inflation across EU countries and weighing heavily on households which are now set to fork out much more just to stay warm during the winter.
However, EU member states in July agreed to voluntarily cut consumption of natural gas by 15 percent at a minimum until next spring. Under that agreement, a “union alert” could be triggered mandating cuts in gas consumption if the supply crisis worsens.
“Skyrocketing electricity prices are now exposing, for different reasons, the limitations of our current electricity market design,” she said during an address at the Bled Strategic Forum.
“[The market] was developed under completely different circumstances and for completely different purposes. It is no longer fit for purpose. That is why we, the Commission, are now working on an emergency intervention and a structural reform of the electricity market. We need a new market model for electricity that really functions and brings us back into balance,” von der Leyen said.