Reign of confusion

Will Europe survive winter? This has become the question of the year and perhaps the hottest topic for most popular media. Yet those same media have been repeatedly accused — by people of no significance on social media but a lot of them — of writing propaganda rather than reporting news.

I will forgo sharing my opinion in the matter I will point out that genuine reporting is not completely dead. And because of that, the coverage of Europe’s winter experience has been quite confusing.

Take this column by Reuters’ John Kemp, for example. In it, Kemp cites figures showing that there is still plenty of gas in European storage and there is a good chance levels will remain comfortable until the end of heating season.

To be honest, Kemp also says that Europe is a third of the way towards this end of heating season, which I disagree with, based on decades-long personal experience, which suggests it’s more of a fifth along the way in mid-December but those are petty details. The overall picture looks good.

If we are to believe EC President Ursula von der Leyen — I leave this choice to each and every one of you because I can’t force you either way, sad as this makes me — things are indeed looking swell. In fact, Europe has, according to her, already “passed the winter test”. As if it’s April and not December. Chalk it to down to politicians’ eccentricities.

So far so good and no confusion whatsoever. Until we come to this report by the Wall Street Journal: Europe Cold Snap Tests Gas Reserves After Russian Supply Cut. Dated six days before Kemp’s column, the report says that gas demand in Europe and the UK together had soared by 44% during the first full week of December, according to data from ICIS, and that the UK’s demand could rise by 65% from mid-November by the end of that week.

That’s quite a significant increase in gas demand, however you look at it, so Kemp’s figures begin to sound even better, with gas in storage levels 23% higher than the seasonal average for the past decade. That surely sounds wonderful. It sounds especially wonderful when you learn, from that column and other reports, that energy conservation has been a big contributor to this state of affairs. But it may not have been big enough.

The WSJ report cites a tweet by the head of Germany’s energy regulator, Klaus Mueller, saying that “In week 48, far too little #Gas was saved,” and that “this shouldn’t continue.” Do you feel the confusion? Because I certainly do.

On the one hand, gas inventories are above the average for this time of the year, which pretty literally means Europe has more gas than it usually has in mid-December. Which is good, however you look at it.

On the other hand, people appear to be consuming more gas than they should be consuming because despite higher than usual inventories, gas needs to be conserved. Which is not so good, however you look at it.

On the third hand, if you’d kindly lend me one, gas conservation has contributed to the higher-than-usual inventories. Which is good, etc. But it’s not enough, so we must conserve more. Yet Europe has passed its winter test, per its unelected president. So why do we need conserving, one might wonder.

Of course, the confusion stems from the spin that is being put on most news reporting. That spin for Europe is that it will prevail and survive winter, even possibly stronger than when it went into it, and also solidarity, and unity, and stuff to make us feel warmer if the weather won’t.

But because the media that I follow retain some sense of self-respect, the spin is not total and constant, as evident in this Reuters report: Germany's half-a-trillion dollar energy bazooka may not be enough.

In it, the author, Christoph Steitz, offers us a peek behind the spin and the unity and solidarity on stage. And what’s behind them is a gas import bill that’s seven times higher than what it used to be until this year. It’s nauseatingly higher electricity prices for households. And it’s the truth about that energy conservation that government officials have been praising or, in the case of Mueller, the joy-killer, criticising.

The truth, which will surprise no one, is that people were forced to use less energy. People are complaining about only being able to heat one room in their house or flat because they cannot afford to heat the whole place. And people are sharing their fears that they might not be able to keep paying their electricity bills despite their reduced consumption.

Germany alone has spent 440 billion euro on tackling the energy crisis, according to Reuters calculations, which translates into 5,400 euro per person. And that’s on top of the expensive electricity although, in fairness, some of that money should be returned in the form of energy aid. But gas in storage levels are great and Europe’s passed the winter test.

And that’s not all. Per Reuters, “Germany's energy import bill will grow by a combined 124 billion euros this year and next, up from growth of 7 billion for 2020 and 2021, according to data provided by the Kiel Institute, presenting a major challenge for the country's energy-intense industries.”

I’d say this is more of a dirge than a challenge but that would constitute a serious deviation from the spin, which I care so much about, so I won’t pursue it. What I will do is link this opinion piece by Bloomberg’s Javier Blas, which cites the results of a survey among industry executives, policymakers, and consultants on whether the EU will return to its dependency on Russian gas.

Those results would only be surprising to someone who subsists entirely on EU propaganda: opinions were split pretty evenly, Blas reports and then goes on to explain why he’s in the “yes” crowd. I won’t dwell on his argumentation because it rests on certain assumptions that I find charming if a little naive, but I will quote this:

“Europe will probably never go back to the same long-term contracts of the past with Russia, and likely would need to import less gas as time goes by, thanks to renewable energy. But if it is going to keep its chemical, food and heavy industries competitive, it will need some cheap gas. And there is no cheaper gas for Europe than Russia’s.”

The above statement of fact would probably give the collective European Commission piles but it doesn’t make it any less of a fact. It is a seriously uncomfortable fact right now, of course, and a big reason for the large-scale spinning exercise on the European gas topic.

It is the middle of December, the start of winter heating season in Europe. Gas inventories are above the seasonal average for the past ten years and gas prices are above the seasonal average for the past ten years as well. By a lot.

So, people are conserving energy because they have to but they are not being praised for it. Instead, they are being prepared for more conservation because one thing that facts tend to do is interfere with spin.

One fact that was pointedly ignored for most of this year but eventually surfaced about a couple of months ago is that next winter will be much worse than this one. Because Europe will not have the usual flows of Russian gas that it had during the first six months of 2022.

It will, in the best-case scenario, have what it has now, which is about 40 billion cu m, shipped via the Ukraine. For context, last year’s gas imports from Russia were about 150 billion cu m.

In the worst-case scenario, Europe will lose those 40 billion cu m, too. It’s great that gas inventories are at such comfortable levels, despite what Reuters’ Kemp referred to as “the current cold snap”, which in my experience normally lasts until about early March in this part of the world.

Because no matter how much the news media — and the governments they effectively work for — try to convince people that temperatures in Europe are now colder than usual and this will pass, the truth is that even if it’s minus five instead of minus seven, it’s cold and people will want heat to counter that cold. I really don’t know how to put it more simply than this. Europe’s winter test is just beginning.