Posted on 02/13/2025 10:31:11 AM PST by SeekAndFind
European Union officials are considering the potential introduction of a cap on natural gas prices as part of discussions on a clean industrial deal policy to boost Europe’s industry.
Europe is losing competitiveness due to the European gas prices which are up to four times higher than those in the United States.
A cap on prices is being discussed at the European Commission ahead of next month’s release of the so-called Clean Industrial Deal or the related Action Plan on Affordable Energy Prices, sources familiar with the talks have told the Financial Times.
The EU currently has a cap on gas prices, the so-called “market correction mechanism,” from 2022. But its ceiling is $187 (180 euros) per MWh for TTF,
Europe’s key benchmark, and was never needed as prices have not reached that level.
While debates of a new temporary cap are ongoing, the energy industry and market participants and exchanges expressed their “strong concerns regarding the potential inclusion of a price cap” in the clean industrial deal, energy companies, banks, liquidity providers, exchanges, and clearing houses wrote in a joint letter to European Commission President Ursula von der Leyen.
“We believe this measure, if announced, could have far-reaching negative consequences for the stability of European energy markets and the security of supply across the continent,” the associations and trade groups said.
“Implementing an artificial price cap would not address the underlying changes in global gas valuations driven by evolving supply and demand dynamics. Instead, it would likely harm the trust in TTF and prompt the global gas community to shift towards other, unrestrained and therefore more representative reference prices, which are primarily located outside of the EU.”
(Excerpt) Read more at oilprice.com ...
When the central planners are all out of answers - what’s next?
Price controls!
That’s what they get for cutting off Russian gas.
Before piped natural gas became common, companies made gas from coal. Maybe Germany should reopen some coal mines and build some coal gasification plants to make syngas.
They can get instructions from AI or Wikipedia.
(reserves column in millions of tons)
Countries Coal reserves, Global rank
Russia 178757.2 1 2008 - 2022
Germany 39572.93 2 2008 - 2022
Ukraine 37891.91 3 2008 - 2022
Poland 31450.18 4 2008 - 2022
Turkey 12704.12 5 2008 - 2022
Serbia 8282.76 6 2008 - 2022
Belgium 4519.47 7 2008 - 2022
High priced gas or no gas, what do you chose?
When I first heard about this plan, my initial fear was that it might cause shortages.
But then I realized they can just make shortages illegal and that should solve the problem.
Nearly every fracked well produced natural gas, and until the pipes can be built to bring it to market, it’s just flared off - burned on site.
In effect, in the US, natural gas is a waste product of oil drilling. That’s why it’s so cheap.
Of course, liquifying it, and shipping it it LNG tankers isn’t cheap.
Cap the prices, cap the wells. Then see what happens.
RE: they can just make shortages illegal
While they’er at it, why not make sickness illegal as well?
Doom loop.
Europe has quite a lot of frackable gas which of course they won't frack, and Britain has a lot of gas in the North Sea for which they refuse to drill.
Right now, just about all of Europe's security and economic policies are clearly shown to be illusions, but they will simply refuse to do anything until catastrophe strikes.
Having been promised a unicorn filled future where you have the riches of an industrialized society but a pre-industrial environment, they insist on producing more unicorns.
..and human suffering too!
“Maybe Germany should reopen some coal mines ...”
Or restart some nuclear reactors.
Why don’t governments/politicians learn?
“WIN”
5.56mm
Price controls are fun.
I know! When all else fails. Communism! Get in goose-step, comrades! Forward!
No, that would take some common sense. And they can always buy electricity from France - they’ve kept theirs running.
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