Gass prices ( big deal)

this was 2007 now it is 35 TBath for a liter diesel , so who cares, this would be high given the crisis , in Thailand

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Desperate times need radical solutions. Even Churchill knew when it was time to tax the rich

Torsten Bell

The emergency created by soaring energy prices is so grave that normal politics doesn’t apply. Our leaders must wise up – and fast

 Illustration: Dominic McKenzie/The Observer

Sun 28 Aug 2022 07.00 BST

The world has changed on energy prices, so our policy response must also change. That is what every politician should understand after the confirmation that typical bills are heading for £3,600 in October and £5,000-plus in January. Whatever they thought they came into politics for, whatever pet projects or prejudices they have, must be set aside. Their task is to avert the winter of discontent ahead.

Gas prices are shooting up just as we need it to keep our homes warm: half of annual gas consumption happens between January and March. The result will be average winter bills of £500 a month, three times those of last year. Monthly energy costs will peak at more than £700 in January. Anyone who thinks low- and middle-income Britain can afford this hasn’t noticed the living standards stagnation of the last 15 years that has left low-income households spending 59% of their budgets on essentials (up from 52% in 2006).

Alongside energy, the cost of food is on the rise. This is a heating and eating squeeze the like of which none of us has seen before. Thousands will turn off their heating or have it shut off. Millions will run up arrears, dragging down their mental health and credit ratings.

The government’s approach has been to let prices rise (incentivising people to cut consumption) while providing £30bn of support, including via the benefits system, to help pay rising bills. This is what economic textbooks and the IMF recommend and it was the right answer when we faced bills of £2,000. But we are no longer living in that world. The scale of the coming catastrophe means we will need a different policy response. Both Conservative leadership candidates, and opposition parties, have recognised that more will need to be done but their plans fall well short. Scrapping VAT on energy or shifting green levies off bills – as proposed by Rishi Sunak and Liz Truss respectively – will help, but only in the amount of £100 this winter. This is not serious stuff.

Thousands will turn off their heating or have it shut off. Millions will run up arrears

The tax cut focus of the leadership campaign is a distraction. Scrapping the recent national insurance rise would see twice the benefit going to the top 5% as the entire bottom half, who must be our priority this winter. While energy bills are rising everywhere, this would benefit Londoners twice as much as those in the north-east.Freezing everyone’s bills – as proposed by most opposition parties – tackles the core problem of surging prices, but because it’s not targeted has a huge price tag: £36bn this winter and £64bn next year. The richest households would gain more from Labour’s bill freeze over six months than from scrapping the national insurance rise over a year.

Sunak wants to repeat the lump-sum payments to those on benefits that he introduced as chancellor. This focuses support on those most in need, but its problems grow the more we rely on it. With only 45% of the poorest half of the population receiving benefits, the cliff edge between those receiving support and those missing out would become too big. And lump-sum payments don’t fit with the reality that energy bills vary hugely given family sizes and home types. So it’s time to accept that we are going to need more radical policy options, involving capping the costs of energy at below-market rates. Concerns that this will limit incentives to cut energy use are important but lack perspective, especially for poorer households; 62% of them rent and surging bills do nothing to incentivise landlords to invest in insulation. We also do not want ever stronger incentives for people to turn off the heating: cold homes lay behind 8,500 excess deaths in 2019.

One way is a radical social tariff to cut bills for low- and middle-income households. A 30% reduction for households on benefits or without a higher earner would cost £15bn, targeting those with lower incomes and the biggest bill rises. Putting it in place would be hard, but not impossible. Those on benefits could be automatically enrolled, while others would apply to their energy company with the government confirming eligibility using tax data. The administratively easier, but politically more difficult, route is to cut everyone’s bills and claw back the gains from higher income households via a temporary tax rise. Well over a third of the £23.5bn cost of a 30% bill cut for everyone could be offset by a 1% increase in all income tax rates.

Tax cuts, not rises, are the fashion and clearly borrowing will do most of the work of paying for lower bills this winter, but there are good reasons for asking those able to contribute to do so. It avoids putting more pressure on the Bank of England to raise interest rates further and recognises the huge uncertainty about how long this will last. Prices could fall quickly, but we should plan an approach that the government can afford to sustain into next year if necessary.

There’s nothing free about a market being manipulated by Putin to further his war aims

Imposing windfall taxes, including on renewable generators making huge profits where the price they charge for electricity is linked to gas prices, is a no-brainer. But we must be honest: windfall taxes can’t cover this. Too many windfalls accrue outside the UK, beyond our tax grasp. That’s why solidarity taxes on those able to contribute more come into play in situations where geopolitics requires huge sacrifices of ordinary people. Churchill wasn’t a communist but taxes on the top rose a lot during the Second World War.

It’s crucial that we avoid distractions from working through these hard policy choices and putting in place the longer-term answers to today’s nightmare: accelerating new renewable and nuclear generation capacity, reforming our energy market and making energy efficiency (especially of our leaky housing stock) a policy priority. So, ignore the debate about nationalising energy suppliers (which is irrelevant to the costs of delivering below-market prices) or calls from those same suppliers for expensive and complex government guarantees. Those distracting us with their anxieties about intervening in the free market should remember that there’s nothing free about a market being manipulated by Putin to further his war aims.

We live in the world as it is, not as we would like it to be. Energy bills have risen so far that they have changed the nature of the problem facing us. It’s time for politicians to understand that that means changing the nature of the answers they are offering.

 Torsten Bell is chief executive of the Resolution Foundation

Putin / Russia earns 2.5x more than in 2019 and punishes the EU at the same time, in UKraine they are advancing slowly, I don’t see them getting into trouble there yet

NOS Nieuws•Vandaag, 22:05

Today, 22:05
Gazprom can no longer supply gas to major European customers due to ‘force majeure’

most imprtant gas pipelines to EU

The Russian state-owned company Gazprom has reported to several customers that gas supplies can no longer be guaranteed due to ‘force majeure’. Among those customers are the large German gas importer Uniper, which is already in serious trouble, and RWE, a German energy company that operates internationally.

An unnamed source confirms to Reuters that deliveries are made through the Nord Stream 1 pipeline. It is currently down for maintenance. There were already fears that Russia would use this meeting to further limit or stop the gas supply to Europe.

Thirtieth move of the chess game
“I think it is too early to say hard that Nord Stream 1 will really close, but it is becoming increasingly likely,” said Jilles van den Beukel, energy analyst at The Hague Center for Strategic Studies. “Putin is playing a game of chess and out of forty moves, this is about the thirtieth. I can’t see inside his head, but it’s a pattern that less and less gas is coming out of Russia.”

Invoking force majeure, also known as force majeure, is a way out of contracts in order not to have to fulfill obligations in exceptional circumstances. In this way, Gazprom may already try to cover itself against possible compensation demands if they no longer supply gas.

NOS
Experts place little faith in this appeal to force majeure. “My firm belief is that if Russia wants to export, it really is possible,” says Van den Beukel. “For example, there are other pipelines that could take over, such as the Yamal pipeline.”

Deliver less, earn more
About 40 percent of all gas that Europe imports arrives in Germany via Nord Stream 1 from Russia, from where it is transported further. Gazprom has recently reduced these deliveries considerably, partly because, according to the Russian state-owned company, there were problems with a turbine.

In the meantime, Russia earns a lot from the gas supplies that still go to Europe. “At the moment, Putin gives about a quarter of the volume of 2019, for ten times the price,” says Van den Beukel. “So he earns 2.5 times more than in normal times.”

Nevertheless, after the news about the appeal to force majeure, the gas price has not risen much further. “The market had already priced in to a large extent that the gas will no longer flow through the Nordstream 1 pipeline next Thursday, when maintenance is complete,” says Van den Beukel. Earlier today, the International Energy Agency warned that it is code red for Europe.

Gas straks op, en dan in combi met strenge winter . . hout/kolen kachel weer actueel

NOS Nieuws•Vandaag, 18:15•Aangepast vandaag, 20:37

Internationaal energieagentschap: het is code rood voor Europa

Europese landen moeten zo snel mogelijk het gasverbruik minderen en de gasvoorraden aanvullen. Daarnaast moeten de landen hun noodplannen op elkaar afstemmen voor het geval er tekorten ontstaan, schrijft het Internationaal Energieagentschap (IEA) in een brandbrief. “Deze winter kan een historische test voor de Europese solidariteit worden”, zegt directeur Fatih Birol. Het IEA adviseert de 29 aangesloten landen over ontwikkelingen op de energiemarkt en strategie bij tekorten.

Volgens het IEA heeft Europa wel al vooruitgang geboekt, maar is het niet genoeg. “Het is code rood voor Europa omdat Rusland steeds meer de gastoevoer afknijpt, gecombineerd met andere leveringsproblemen”, schrijft Birol. “De komende maanden zijn cruciaal.”

Hier zie je de gastoevoer van Rusland naar de Europese Unie vanaf januari 2019 tot nu:

De IEA gaat ervan uit dat de gasvoorraden van Europese landen tot 90 procent moeten zijn gevuld om de winter goed door te komen. Om dat te bereiken, moet volgens de berekeningen komende drie maanden zo’n 12 miljard kubieke meter gas extra worden opgeslagen.

De Europese Unie kwam vandaag nog een intentieverklaring met Azerbeidzjan overeen om de gasleveringen in de komende jaren te verdubbelen. Maar dat is volgens het IEA een druppel op een gloeiende plaat: zonder Russische gasleveringen wordt het heel moeilijk om de benodigde reserves te behalen.

En zelfs als het dan lukt om de voorraden tot 90 procent te vullen, is het volgens het IEA nog maar de vraag of het lukt om de winter te komen als Rusland de gasleveringen in oktober alsnog stopt:

Birol roept daarom Europese leiders op zo snel mogelijk maatregelen te nemen om zich voor te bereiden op de winter. Hij wil onder meer dat bedrijven gecompenseerd worden als ze minder energie gebruiken. Ook roept hij op om kolen-, olie- en kerncentrales zoveel mogelijk te laten draaien. Nederland heeft al besloten om kolencentrales weer op volle kracht te laten draaien om gasgestookte centrales te ontzien.

Nord Stream 1 van cruciaal belang

Van cruciaal belang is uiteindelijk hoeveel gas Rusland komende tijd door de Nord Stream 1-gaspijpleiding naar Duitsland pompt. Op dit moment stroomt er niks doorheen vanwege onderhoud en de angst is groot dat Rusland dit moment aangrijpt om de gastoevoer verder te beperken of zelfs te stoppen.

Die tekenen zijn er: volgens persbureau Reuters heeft Gazprom meerdere grote Europese klanten in een brief laten weten dat door ‘overmacht’ geen gas via de Nord Stream 1 meer geleverd kan worden. Onder meer Uniper, de grootste Duitse importeur van Russisch gas, en energiebedrijf RWE hebben die boodschap van Gazprom gekregen.

Met het beroep op overmacht zou het Russische staatsgasbedrijf zich kunnen indekken tegen eventuele compensatie-eisen als het gas niet meer geleverd wordt.

Noodkrediet voor Uniper

Uniper heeft intussen aanspraak moeten maken op de 2 miljard noodkrediet van de Duitse overheid en om nog meer steun gevraagd. Doordat er afgelopen weken al minder gas via de Nord Stream 1 stroomde, moet het bedrijf het ergens anders veel duurder inkopen. Dat levert miljoenen verlies per dag op.

Daarnaast levert Uniper op dit moment gas uit eigen reserves om klanten te kunnen bedienen. Daardoor raken de Duitse gasvoorraden eerder leger dan voller voor komende winter.

De IEA maakt zich dus grote zorgen, maar de Gasunie Transport Services in Nederland liet onlangs een ander geluid horen. De gasnetbeheerder verwacht dat er deze winter geen gastekort zal ontstaan als Rusland niet meer levert, mits wordt voldaan aan een aantal voorwaarden. Zo moet de gasopslag voor 80 procent zijn gevuld. Nu is dan nog zo’n 57 procent.