GWPF Newsletter: Russia Hints At Squeeze On Europe’s Gas Supplies

US Shale Cargo Turns Towards UK As Spat With Russia

In this newsletter:

1) Russian Sabre-Rattling: Putin Hints At Squeeze On Europe’s Gas Supplies
The Australian, 16 March 2018
 
2) ‘Britain At The Mercy Of Russian Gas Giants’ As Reserves In Europe Reach Record Lows
Daily Mail, 15 March 2018

 
3) US Shale Cargo Turns Towards UK As Spat With Russia 
Financial Times, 15 March 2018
 
4) British Govt Seeks Alternatives For Russian Natural Gas After Relations Deteriorate
Bloomberg, 14 March 2018
 
5) Thanks To The Anti-Fracking Lobby, Britain Depends On Russia’s Gas
The Spectator, 15 March 2018
 
6) Wrong Rain: Wind Turbines Are Wearing Too Fast At The World’s Largest Offshore Farm 
The Times, 15 March 2018  

Full details:

1) Russian Sabre-Rattling: Putin Hints At Squeeze On Europe’s Gas Supplies
The Australian, 16 March 2018
Jacquelin Magnay

The Kremlin last night promised to retaliate in kind for Britain’s expulsion of 23 Russian spies masquerading as diplomats over the poisoning of double agent Sergei ­Skripal and his daughter, Yulia.

Foreign Minister Sergei Lavrov said Russia would “certainly” expel British diplomats. He said that the move would come “soon”.

Vladimir Putin’s spokesman Dmitry Peskov said the President’s retaliatory steps would soon follow and he would choose the option that “most suits Russia’s interests”. “The position of the British side appears to us absolutely irresponsible,” he said.

Britain is bracing for the Russian backlash, including a squeezing of Europe’s gas supplies. Foreign Secretary Boris Johnson said Moscow targeted Mr Skripal to make it clear those who defy the ­Russian state deserve to “choke on their own 30 pieces of silver”.

British Prime Minister Theresa May garnered support from Australia, Europe, NATO and the US yesterday in condemning Russia for the brazen “unlawful use of force” in poisoning the Skripals with the chemical novichok and putting others in danger.

US ambassador to the US Nikki Haley gave Britain “absolute solidarity’’ in “this defining moment”, calling for immediate measures.

The White House said the March 4 attack in Salisbury, England, “fits into a pattern of behaviour in which Russia disregards the international rules-based order, undermines the sovereignty and security of countries worldwide, and attempts to subvert and discredit Western democratic institutions and processes”.

NATO allies expressed their support for Britain following the first use of a nerve agent in Europe since World War II.

But France undermined Mrs May’s international consensus by accusing her of “fantasy politics’’. President Emmanuel Macron’s spokesman Benjamin Griveaux said France wanted to wait for evidence of Russian involvement before condemning the Kremlin.

“Once the elements are proven then the time will come for decisions to be made.” he said. Later in the UN Security Council, France backed the British investigation, expressing “full confidence’’.

And Mr Macron said last night there was “no other plausible explanation”….

Mrs May sought to calm fears that Russia could target gas for household heating — with snow and temperatures below zero expected in Britain on Sunday and Monday.
Britain gets most of its gas from the North Sea, but a ruptured pipe in Aberdeen has affected supplies. European countries get more than a third of their gas from Russia, some of which is on-sold to Britain.

“When we are looking to our gas supplies, we are indeed looking to other countries,” Mrs May said.

“The extent to which Russia uses its energy as a means to influence and have an impact on those countries that are in receipt of it and also the finances that it provides is an important one.

“We will be continuing to discuss with the European Union not just our energy security but that wider energy security issue.”

The Russian embassy in London hinted about the gas immediately after Mrs May’s speech.

“The temperature of Russia-UK relations drops to minus 23, but we are not afraid of cold weather,’’ the embassy tweeted.

Full story
 
2) ‘Britain At The Mercy Of Russian Gas Giants’ As Reserves In Europe Reach Record Lows
Daily Mail, 15 March 2018

A cold snap next week could leave the country at the mercy of Russian gas suppliers, experts have warned.

Plunging temperatures on Sunday and Monday are likely to send demand for gas soaring across the UK and Europe to heat and light homes.

A report from the analysts S&P Platts warns that relying on Russia may be the only option for European nations if they suddenly need more as other suppliers are already running at or near capacity.

Gas reserves across the continent are at record lows after cold spells and the closure of British storage facilities.

But the report said: ‘Gas demand is set to rise again from the end of the week across north-western Europe, bringing potential large-scale gas withdrawals back into play and prompting a likely increase in nominations for Russian gas imports.

‘Given the surge in demand, Russian gas supplies are considered the only swing source of gas under current conditions. Domestic production and other import sources are effectively maxed out.’

Campaigners fear the growing reliance on imports leaves the UK vulnerable at a time of heightened political tension with Russia in the wake of the row over the poisoning of former double agent Sergei Skripal and his daughter in Salisbury.

Official figures suggest only a small proportion of Britain’s gas comes from Russia directly. But many major pipelines across Europe start in Russia. This allows state-backed giants such as Gazprom effective control of European gas supplies.

Gazprom claims it sold just over 16billion cubic metres of gas to the UK last year – around 20 per cent of the country’s total demand. Russia’s gas exports to Europe rose to a record 194billion cubic metres last year



The UK imports around 44 per cent of its gas from Europe and Norway. In turn, Europe imports around 35 per cent of its gas from Russia.

Experts say the UK would struggle to balance its own supplies if there were not enough available on the continent. And they warn that the only nation capable of increasing supplies in times of high demand is Russia.

Gazprom claims it sold just over 16billion cubic metres of gas to the UK last year – around 20 per cent of the country’s total demand. Russia’s gas exports to Europe rose to a record 194billion cubic metres last year.

Britain also bought a shipment of liquefied natural gas from Russia to cope with demand during the Beast from the East weather front at the end of February.

Tory MP Stephen Crabb said: ‘We know Russia deliberately uses its energy resources to create relationships of dependency across Europe and I don’t think we should be putting ourselves in that position. There are lots of options.’

The Prime Minister told the Commons yesterday Britain is looking to other countries to supply gas as it ramps up measures against Russia in response to the Skripal affair.

The UK has become far more reliant on imports in recent years due to the dwindling supply of gas from the North Sea and the closure last year of the Rough storage facility, which at its peak accounted for 70 per cent of the UK’s gas storage.

‘This is one of those positions where there is an event and the situation could degenerate to the position where Russia does look to reduce the amount of gas it supplies to the West. It loses money if it does, but as a retaliatory measure, it’s conceivable.’

Tim Roache, of the GMB union, said: ‘There is a real danger here. We need a serious strategy and investment in UK energy to make sure we can stand on our own two feet.’

Full story
 
3) US Shale Cargo Turns Towards UK As Spat With Russia 
Financial Times, 15 March 2018

The first tanker of liquefied natural gas to depart a new facility on the US east coast has changed course mid-Atlantic and is heading for the UK, the day after questions were raised in Westminster about rising UK imports of Russian LNG.



The Gemmata LNG tanker, which left the newly opened Cove Point terminal in Maryland roughly 10 days ago, has turned north east 1,500km off the coast of Suriname and is said to be heading for the Dragon LNG terminal in south Wales.

The FT reported this week that of the six LNG tankers that have made deliveries into the UK so far in 2018 three have carried cargoes originally from Russia, leading to questions about whether Moscow was gaining a foothold in the UK gas market after starting up the Yamal LNG facility in Siberia late last year.

With tension between the UK and Russia at the highest level since the cold war, following the alleged nerve agent attack by Russia on a former spy in Salisbury, prime minister Theresa May said on Wednesday that “in looking at our gas supplies we are indeed looking at other countries”.

Rising US exports of LNG have been dubbed “liquid freedom” by US congressman Pete Olson from Texas, and President Donald Trump has openly spoken of pursuing a policy of “US energy dominance”.

The shipment, however, is likely primarily chasing higher gas prices in the UK.

Full story (subscription required)
 
4) British Govt Seeks Alternatives For Russian Natural Gas After Relations Deteriorate
Bloomberg, 14 March 2018

Prime Minister Theresa May responded to a chemical weapon attack against a former spy on British soil with a range of measures against Russia such as asset freezes and the biggest diplomatic expulsions since the Cold War. The U.K. will also look at getting natural gas from sources outside Russia.

While Europe as a whole gets about a third of its gas from Russia, that fraction is lower in the U.K., which gets the bulk of its fuel from North Sea fields and Norway. Britain buys some Russian gas through links with mainland Europe and has also been getting more by ship from a new liquefied natural gas plant in northern Siberia.

“The extent to which Russia uses its energy as a means to influence and have an impact on those countries that are in receipt of it and also the finances that it provides is an important one,” May said. “We will be continuing to discuss with the European Union not just our energy security but that wider energy security issue.”

Russia’s state-run Gazprom PJSC, which holds a monopoly on gas exports by pipeline, sold fuel to the U.K. worth $2.85 billion last year, according to data provided by the press office of Russia’s customs service. While the volume decreased 9.2 percent from a record in 2016, Gazprom sees sales rising this year after recent cold snaps.

Novatek PJSC contributed to U.K. supply this winter with LNG cargoes from Russia’s Arctic, where the company started a $27 billion plant in December. London is also home to Gazprom’s biggest energy trading unit. 

Full story
 
5) Thanks To The Anti-Fracking Lobby, Britain Depends On Russia’s Gas
The Spectator, 15 March 2018
Ross Clark

Who stands between the government and a proper, effective sanctions regime against Russia? Not Jeremy Corbyn, though he might wish he could. Putin is going to get away with the Salisbury attack, suffering little more than a token expulsion of diplomats, thanks to anti-fracking protesters.

They didn’t mean it, of course. When they stood before the bulldozers in the Sussex village Balcombe, jumped up and down about mini-Earth tremors in Lancashire they thought they were doing the Earth a favour. They saw UK-produced shale gas as a dirty alternative to clean, carbon-free energy. But they were wrong. In the short to medium term at least the alternative to UK-produced shale gas was imported gas, an increasing proportion of which comes from Russia.

Anyone surveying the wind turbines and solar panels sprouting across the British countryside could be forgiven for thinking that we are rapidly building self-sufficiency in energy – and clean energy at that. But it isn’t true. By far the bigger story is the decline in North Sea oil and gas production, which has taken up back to a level of energy-dependence last seen in the mid 1970s. As recently as 1999, the UK was producing 20 per cent more energy than it consumed. But the last year we enjoyed energy self-dependence was in 2003. By 2015, a net 38 per cent of energy consumed here was imported.

As for gas, which accounts for just under 40 per cent of total energy consumed in Britain, 43 per cent currently comes from UK production, 44 per cent comes from European pipelines (of which a third is ultimately supplied by Russia). The remaining 13 per cent is imported in the form of liquified natural gas (LNG) – either from Qatar, the US or, since of this year, the Yamal LNG project in Russia’s Arctic. Putin’s sale of this gas to the UK, when Russia is still under EU sanctions following the annexation of Crimea, is something of a PR coup for him. It sends the message that however much we would like to retaliate against him economically, we are constrained by our dependence on Russian energy.

It could have been different had the UK’s shale gas industry been properly supported. Instead, it was put at the mercy of Lancashire councillors and the anti-fracking lobby was left to win public support largely unchallenged. The result is that the government’s tough words against Putin cannot be followed up by action which would genuinely hurt him. For the anti-fracking lobby it is a prime lesson in the law of unintended consequences.
 
6) Wrong Rain: Wind Turbines Are Wearing Too Fast At The World’s Largest Offshore Farm 
The Times, 15 March 2018 
Emily Gosden

Hundreds of offshore wind turbines in UK waters need emergency repairs after they started eroding within a few years of being installed.

Owners of the 175-turbine London Array wind farm off Kent, the biggest offshore farm in the world, and the 108-turbine West of Duddon Sands wind farm off Cumbria have applied to the Marine Management Organisation for permission to carry out urgent repairs.

The London Array was completed in 2013 and West of Duddon Sands a year later. Both use a type of turbine made by Siemens Gamesa, which has admitted that the leading edge of the blades — the part that slices through the air when the turbine turns — is being eroded much faster than expected on some of the machines. A spokesman said that various factors including the “wind speed, the rotor configuration, the amount of rain, and even the size of raindrops” were thought to be behind the problem.

The UK has more offshore wind farms than any other country after supporting their construction with generous renewable energy subsidies to help to meet climate change targets. More than 1,600 turbines operate in UK waters, but critics have long questioned how reliable they will prove in the harsh conditions offshore.

If the issue with the Siemens Gamesa turbines proves symptomatic of a wider problem, it could undermine the economics of building wind farms.

The type of turbine known to be affected has blades spanning a 120-metre diameter. When installed they were among the biggest used offshore. The tips of the giant blades move more quickly through the air than in earlier, smaller models, which may have contributed to the erosion.

Siemens Gamesa said that it had installed more than 950 of the affected model worldwide, but was unable to confirm the number in the UK. Orsted, the Danish company that co-owns both London Array and West of Duddon Sands, said that it was also assessing four other wind farms that used a similar specification of turbine.

Far bigger turbines are now being installed but Siemens Gamesa said that they should not be affected because the potential for the leading edges to erode was identified in 2014 and all machines installed since had extra protection.
Siemens Gamesa said that it would carry out “performance upgrades”.

The affected blades were made in Denmark with glass fibre and balsa. The repair involves glueing a 3mm rubber-like shell onto the damaged areas. The blades are likely to be removed to carry out the repairs.

Work on both wind farms is due to start next month and could take from one to three years. The companies refused to disclose the costs of the repairs, expected to stretch to tens of millions of pounds. They said that consumers would not face any costs.

John Constable, a long-term critic of wind farm costs who writes for the climate-sceptic Global Warming Policy Forum, said: “If this is a part of a general phenomenon, then the implications for the economic viability of wind power in general are very serious.”

A spokesman for Orsted said the problem would not result in any “noticeable impact on the continuing production of clean, green electricity”.

The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.