This week began with the European Commission’s President Ursula von der Leyen celebrating the early filling of gas storage facilities across Europe. The 80% target set for end-October was hit early! Europe now has enough gas for the winter! Except it doesn’t.
"greenbies" - What a great descriptive word for the EV "Cultists" folks that snub their nose at anyone who does not drive one. Irina Strikes Again can be another Star Wars Movie!
These political elites ( and a lot of the sheep) in Europe and most of the western OECD are becoming so detached from reality that they now believe their own propaganda and have lost the ability to challenge consensus views and work out what is real. They are, it seems, cheering them selves down a path of energy suicide which leads to a collapse of civil society.
Great read Irina. Add Finland and Norway to the disgruntled list! I almost fell out of my chair when the CA gov. announced the new law and two days later you must refrain from charging them LOL. What people do not know is lithium mining and production is a serious polluter of our environment. More so than ICV's. Go take a look at the poisons that do not go away nor can be converted to a safer substance. The water it takes to mine and manufacture the batteries is astronomical.
“price caps would only stimulate more gas demand.” Yes, and punishing energy producers (windfall taxes) will only limit supply. Stimulating demand and limiting supply is suicidal.
I agree with those who say your wit is in overdrive today!
I will add a comment in regard the electricity prices in Finland. Only about 15 percent of the energy comes from fossil fuels. The rest are from domestic sources (with hydro power partially imported from Sweden and Norway). If the expense of production of this energy and a small profit for the companies are included, the final price ought to be much less than today's prices. The reason for the high prices is linked to the futures markets. The cause ultimately can be traced to market fundamentalism. Earlier in various countries Public Utilities provided electricity by the above mentioned formula and prices were determined by audited reports of the profitability of the utilities. This was deemed an inefficient way as markets supposedly would be a better way to determine the price. Unfortunately the futures markets became the play ground for big money interest that were neither involved in production of electricity nor in the consumption, be they factories, businesses, or households. The end result is now for everyone to see.
The incompetence of our governments is sickening. European Commission Commissioner for Energy, Kadri Simson, has a degree in political science and one in history. German Energy & Climate minister, Robert Habeck, has degrees in language studies. Real qualified to make logical and rational energy policy. When they do have a highly qualified engineer usually they relegate them to the back bench or if they are senior in the party they will give them some title like "minister of pensions". In actual fact they REALLY HATE engineers. They don't like been told that their silly fantasies won't work.
"...It is not because politicians like Scholz or German Green Economy Minister Robert Habeck, nor EU Commission Green Energy Vice President Frans Timmermans are stupid or clueless. Corrupt and dishonest, maybe yes. They know exactly what they are doing. They are reading a script. It is all part of the EU plan to deindustrialize one of the most energy-efficient industrial concentrations on the planet. This is the UN Green Agenda 2030 otherwise known as Klaus Schwab’s Great Reset..."
But the article does point out that the cure for higher prices is, in fact, higher prices. That is leading to demand destruction. So, what explains this amazing phenomenon of a hyperbolic rise in the gas price amidst soaring gas pipeline system inventories?
The futures market, and in this case an extremely thin futures market in European gas. If speculators, manipulating merchants, and panicked consumers decide they want to buy gas futures because the price is soaring, and they think it will soar more, we can get a situation in a thin market where futures buying overwhelms selling by hedgers and skyrockets the price.
Bubbles in extremely thin derivatives markets can become so detached from fundamentals that they can burst as explosively as they came about. The natural hedgers who hold the physical in this case are the pipeline companies in Europe. The explosive rise in the price of gas this summer says they are not hedging. It may be that by practice or precedent they don’t hedge on a large enough scale. And if the narrative of a future shortage, despite inventories above the 5-year average and rising rapidly, is so widely believed, buying in a thin derivatives market can scare off commercial hedgers, creating a bubble in the futures price.
I think this is exactly what has been happening to European gas. Today's European gas price is totally detached from the physical fundamentals. It is a product of a state of mind in the players in a very thin derivatives market and an Armageddon shortage narrative which is promulgated by the bulls and the media despite obvious rapidly rising physical inventories.
Many precipitating events can prick the gas derivatives bubble.
I think it is beginnng to happen between now and year end. And many other markets – especially the Euro and the European equities – may reverse violently. But so might perceptions about Russia's leverage in the energy markets.
Another side note: Today the French utility Engie SA said that Gazprom will reduce gas deliveries.
It is a futile exercise that smacks of desperation. Engie has already secured the volumes necessary to meet its commitments to customers.
France has already surpassed 90% of full gas storage. Engie says France should have enough fuel to cope with a winter with average temperatures.
Gazprom’s deliveries to Engie have already decreased to a monthly supply of 1.5 terawatt-hours. That is a mere 0.3% of Engie’s total annual supplies in Europe of above 400 terawatt-hours.
Irina, boy do you hit it correctly on the entire energy situation and the mention of Oklahoma and Californias Governors statements this week is something else. You call it here, “ I don’t know about you but I find such straightforward honesty simply deplorable. It is also potentially dangerous. People have been making money off these tax credits for years. What if someone important hears Stitt? Worse, what if someone hears him and understands what he’s saying? The fallout could be devastating.”. The woke left I’m sure did not like the Oklahoma leaders truth. Even more interesting was the hypocrisy presented where I live in California on EVs, chargers and now wishing to fund and extend our last remaining Nuclear plant (Diablo Canyon) which produces roughly 10% of our power and its synchronous power at that. The true woke leftists are rolling in their graves (and they are not dead yet except in their heads) about having to back Nuclear Power over Earth Saving Wind, Solar and BESS. It’s an interesting time where we expect 109F this Sunday here in my part of Los Angeles County (12 miles from DTLA) and people are panicking. The mantra is we’ve never had it this hot here but we have it was just back in the 80s, 60s and 20s of the last century. But to point out this weather pattern goes against the feeling and desire to save the planet from Global warning by 2030 or is it 2035 or is it 2045, I’m so confused.
"greenbies" - What a great descriptive word for the EV "Cultists" folks that snub their nose at anyone who does not drive one. Irina Strikes Again can be another Star Wars Movie!
These political elites ( and a lot of the sheep) in Europe and most of the western OECD are becoming so detached from reality that they now believe their own propaganda and have lost the ability to challenge consensus views and work out what is real. They are, it seems, cheering them selves down a path of energy suicide which leads to a collapse of civil society.
Great read Irina. Add Finland and Norway to the disgruntled list! I almost fell out of my chair when the CA gov. announced the new law and two days later you must refrain from charging them LOL. What people do not know is lithium mining and production is a serious polluter of our environment. More so than ICV's. Go take a look at the poisons that do not go away nor can be converted to a safer substance. The water it takes to mine and manufacture the batteries is astronomical.
Same goes for solar.
Good to see Irina back in snarky Friday form!
Great stuff Irina Slav. My guess is Switzerland, as opposed to Oklahoma, will game the tax credits.
Don't fear the Reaper.
Lol
“price caps would only stimulate more gas demand.” Yes, and punishing energy producers (windfall taxes) will only limit supply. Stimulating demand and limiting supply is suicidal.
I agree with those who say your wit is in overdrive today!
Oh what an appropriate choice of music! How I love Blue Oyster Cult
I will add a comment in regard the electricity prices in Finland. Only about 15 percent of the energy comes from fossil fuels. The rest are from domestic sources (with hydro power partially imported from Sweden and Norway). If the expense of production of this energy and a small profit for the companies are included, the final price ought to be much less than today's prices. The reason for the high prices is linked to the futures markets. The cause ultimately can be traced to market fundamentalism. Earlier in various countries Public Utilities provided electricity by the above mentioned formula and prices were determined by audited reports of the profitability of the utilities. This was deemed an inefficient way as markets supposedly would be a better way to determine the price. Unfortunately the futures markets became the play ground for big money interest that were neither involved in production of electricity nor in the consumption, be they factories, businesses, or households. The end result is now for everyone to see.
The incompetence of our governments is sickening. European Commission Commissioner for Energy, Kadri Simson, has a degree in political science and one in history. German Energy & Climate minister, Robert Habeck, has degrees in language studies. Real qualified to make logical and rational energy policy. When they do have a highly qualified engineer usually they relegate them to the back bench or if they are senior in the party they will give them some title like "minister of pensions". In actual fact they REALLY HATE engineers. They don't like been told that their silly fantasies won't work.
Good article by William Engdahl on the Real Goal of European Energy Policy.
Europe’s Energy Armageddon From Berlin and Brussels, Not Moscow:
http://www.williamengdahl.com/englishNEO31August2022.php
"...It is not because politicians like Scholz or German Green Economy Minister Robert Habeck, nor EU Commission Green Energy Vice President Frans Timmermans are stupid or clueless. Corrupt and dishonest, maybe yes. They know exactly what they are doing. They are reading a script. It is all part of the EU plan to deindustrialize one of the most energy-efficient industrial concentrations on the planet. This is the UN Green Agenda 2030 otherwise known as Klaus Schwab’s Great Reset..."
Great tune.
But the article does point out that the cure for higher prices is, in fact, higher prices. That is leading to demand destruction. So, what explains this amazing phenomenon of a hyperbolic rise in the gas price amidst soaring gas pipeline system inventories?
The futures market, and in this case an extremely thin futures market in European gas. If speculators, manipulating merchants, and panicked consumers decide they want to buy gas futures because the price is soaring, and they think it will soar more, we can get a situation in a thin market where futures buying overwhelms selling by hedgers and skyrockets the price.
Bubbles in extremely thin derivatives markets can become so detached from fundamentals that they can burst as explosively as they came about. The natural hedgers who hold the physical in this case are the pipeline companies in Europe. The explosive rise in the price of gas this summer says they are not hedging. It may be that by practice or precedent they don’t hedge on a large enough scale. And if the narrative of a future shortage, despite inventories above the 5-year average and rising rapidly, is so widely believed, buying in a thin derivatives market can scare off commercial hedgers, creating a bubble in the futures price.
I think this is exactly what has been happening to European gas. Today's European gas price is totally detached from the physical fundamentals. It is a product of a state of mind in the players in a very thin derivatives market and an Armageddon shortage narrative which is promulgated by the bulls and the media despite obvious rapidly rising physical inventories.
Many precipitating events can prick the gas derivatives bubble.
I think it is beginnng to happen between now and year end. And many other markets – especially the Euro and the European equities – may reverse violently. But so might perceptions about Russia's leverage in the energy markets.
Another side note: Today the French utility Engie SA said that Gazprom will reduce gas deliveries.
It is a futile exercise that smacks of desperation. Engie has already secured the volumes necessary to meet its commitments to customers.
France has already surpassed 90% of full gas storage. Engie says France should have enough fuel to cope with a winter with average temperatures.
Gazprom’s deliveries to Engie have already decreased to a monthly supply of 1.5 terawatt-hours. That is a mere 0.3% of Engie’s total annual supplies in Europe of above 400 terawatt-hours.
Wickedly funny, Irina. It is interesting that Europe is trying to think and talk its way out the way it use to think and talk.
Irina, boy do you hit it correctly on the entire energy situation and the mention of Oklahoma and Californias Governors statements this week is something else. You call it here, “ I don’t know about you but I find such straightforward honesty simply deplorable. It is also potentially dangerous. People have been making money off these tax credits for years. What if someone important hears Stitt? Worse, what if someone hears him and understands what he’s saying? The fallout could be devastating.”. The woke left I’m sure did not like the Oklahoma leaders truth. Even more interesting was the hypocrisy presented where I live in California on EVs, chargers and now wishing to fund and extend our last remaining Nuclear plant (Diablo Canyon) which produces roughly 10% of our power and its synchronous power at that. The true woke leftists are rolling in their graves (and they are not dead yet except in their heads) about having to back Nuclear Power over Earth Saving Wind, Solar and BESS. It’s an interesting time where we expect 109F this Sunday here in my part of Los Angeles County (12 miles from DTLA) and people are panicking. The mantra is we’ve never had it this hot here but we have it was just back in the 80s, 60s and 20s of the last century. But to point out this weather pattern goes against the feeling and desire to save the planet from Global warning by 2030 or is it 2035 or is it 2045, I’m so confused.
Nice sound track. Well chosen.