Analysts are warning of civil unrest in Germany due to exploding natural gas costs. Reuters. Natural gas costs could triple due to Russia cutting of supplies. People are being warned to set aside money and reduce energy consumption in an effort to weather the coming storm. Some are calling for price caps to keep gas prices low. The fuel crisis is starting to change German opinions on the Russia-Ukraine war with fewer people supporting a boycott on German natural gas. With exploding prices it is feared that Germans will not be able to pay their bills and that could lead to civil unrest.
The news comes as Germany has been forced to draw down on their natural gas supplies that they had begun to store for winter. Reuters. The market conditions have forced them to draw down on their natural gas. They were at 64.4% yesterday, which was 0.1% less than on Wednesday.
My Comment:
Though this article is about Germany, the same hard choices are going to be made throughout Europe until either the war in Ukraine or the sanctions against Russia end. As long as either of those things are not the case then Russia will continue to draw down natural gas supplies in Europe.
And why wouldn't they? They view Ukraine as an existential threat and know that they have Europe by the throat here. Much of Europe is almost totally dependent on cheap Russian natural gas and even though they are attempting to move away from it, it won't be done in time before winter hits, if it ever even happens at all. Russia knows this and also knows that people will put up with a lot from their governments but will not tolerate freezing to death.
And people are already saying that enough is enough. Support for sanctions against Russia are falling as people realize the devastating economic impact the sanctions are having on their own countries. Sanctions are easy when they are against a country that doesn't provide all that much, but when they are your biggest and sometimes only source of the lifeblood of your country? That's a huge deal and not one that people will support long term as the pressure ramps.
What is utterly shocking about Germany specifically is that they had an out that would have made these sanctions bearable. I would still think they are misguided but they would have the ability to keep the lights on at least over this winter. I am, of course, talking about nuclear power. Germany has shut down almost all of their nuclear plants in what was an extreme and self-defeating overreaction to the Fukushima disaster. Though nuclear power wouldn't have solved everything as many Germany homes run on natural gas boilers, it would have at least reduced demand from power plants, making those prices lower than they will be this winter.
Is civil unrest likely? Of course it is! We are already seeing backlash in Europe against the governments their, most notably in The Netherlands due to their foolish green farming initiative that would leave farmers out of work. And we just saw an entire government fall, albeit a 3rd world one, in Sri Lanka when that entire country ran out of fuel.
But the situation in Germany could be worse than that. If people can't afford their natural gas to heat their homes then some people are going to die. Even worse, Germany could simply run out of gas so even the people that could still somehow afford it could not get it. Once grandma freezes to death because there is no gas to heat her home than all bets are off. People would have nothing to lose at this point and would take it out on the government they rightly blame for getting them into this mess in the first place. That could lead to riots, coups, insurgency or even all out civil war.
And the proposed solution to this mess isn't trying to end the war diplomatically, or admitting that Russia has the advantage here and lifting sanctions. No, it's price caps! It's a terrible idea because Russia would be insane to sell the little fuel they are still providing to a country that caps the profit they can make. They would simply sell the fuel elsewhere or produce less. Plus, I am no economist, but I do know that they almost universally say that price caps are a bad idea because they inevitably lead to shortages. They will only make a bad problem into a terrible one.
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