Friday, 21 November 2014

Why do you still doubt that there is a connection between the paintings of old European artists and the Ukrainian underground gas storages?

Typical distinguishing features of classic winter landscape pictures by old European artists such as Hendrick Avercamp and Andreas Schelfhout are an icy expanse, frosty atmosphere and a lot of people on skates. It seems that all of that is far back in the past, and now our Europe is seriously concerned about global warming. Moreover, as if confirming this peculiarity of modern North Europe flocks of wild tropical parrots are flying everywhere in Belgium, the Netherlands, Germany and other countries for a whole year but no one is surprised with that any more. According to the ornithologists' research, the population of parrots only in Brussels consists of 5 to 6 thousand birds.

The irony of it is that in accordance with a study of Japanese researchers from the University of Tokyo published in Nature Geoscience just a global warming could cause severe winters in Europe and Asia. In fact melting of ice in the Arctic Ocean area since 2004 has made more than twice as likely atmospheric circulations that suck cold Arctic air to European continent.

However, as you might imagine, I am primarily interested in how such changes can affect a "circulation" of natural gas streams at global energy market necessary to compensate for cold winters.
Although most of us in Europe do not like it, so long as ice in Greenland and other parts of the Polar world is melting, there is a high probability that soon we will  get an opportunity to see winter landscapes of old European artists in reality.

Apparently, our politicians in Brussels have not disregarded such an unpleasant climate change as well. The European Commission took into account the influence of "cold winter" as one of key risk factors in conducting stress tests on the resilience of the European gas system Preparedness for a possible disruption of supplies from Russia during the fall and winter of 2014/2015.

The results of stress tests published on October 16 indicate that Europe may face harsh challenges. Especially it concerns energy weakest countries of South East Europe. In particular, these documents revealed what can happen in case of a 6-month disruption of gas supplies from Russia. According to ENTSOG modelling, gas shortage by February 2015 in five EC member countries of South East Europe, including Bulgaria, Croatia, Greece, Hungary and Romania in the worst scenario - especially in the coldest spell and in the absence of cooperation between these countries - will range from the highest in Bulgaria (66%) to the lowest in Croatia (12%).

Thus, in relative terms, there will be the most negative impact on Bulgaria, whose position in provision of gas will be more precarious.

Nevertheless, it is obvious that in the present situation with regard to gas supplies the cold winter predicted for Europe is not the only one and, what is more, a major risk factor. For those familiar with my previous posts it should not be a hard task to identify actually a major factor or source of risk to our energy well-being in the coming winter. Now we are talking about a neighboring country, which itself is already on verge of energy collapse, when the authorities are urging citizens to gather firewood and straw on the eve of winter. It happens, unfortunately, not in old artists' themes of paintings, but in real life of Ukraine, which, by the way, declared its desire to acquire associate membership in the EU!

While here in Europe despite of lack of time there are attempts to implement recommendations based on stress tests in order somehow to overcome the threat of gas hunger, early in November Ukrainian state company "Naftogaz" announced that a major supplier of gas to Ukraine would remain ... Europe?

So what should we do in Europe: either to supply gas to Ukraine protecting them against winter cold and their huge economic failures or to search for additional energy resources for themselves not to freeze up in this winter season?

In response, dear readers, I must say that in Ukraine let this gas be called European or anyhow else, even Chilean ... But everybody has to understand that there is no other gas instead of Russian gas on the Slovak-Ukrainian or on the Polish-Ukrainian border!

That is why, for example, Ukraine refuses to reveal the conditions of the contract concluded recently with Norwegian gas supplier Statoil, because otherwise they would have to admit that there is no technical possibility for supplying gas from Scandinavia to the Ukrainian border, and it would be much more expansive. Actually, this Ukrainian-Norwegian transaction, as all in other cases, envisages reversing the gas delivered from Russia.

Realizing this, we need to recognize that the most thorough stress test should be performed particularly in Ukraine, since this country is responsible for ensuring transit of about 50 per cent of total volume of EC gas imports from Russia.

Of course, everybody in Brussels should be aware of it and our respected policy makers had been negotiating for many months in a trilateral format, encouraging at least a temporary agreement between Ukraine, which did not pay the debt for gas, including delivered in November and December 2013 and Russia, which in response shut off gas in June this year.

After seven rounds of gas talks the EU, Russia and Ukraine finally signed an agreement on October 30, which regulates gas deliveries until March 2015. Meanwhile the signing of this so-called "winter package" of trilateral documents is unlikely can cover a looming energy gap in Ukraine in the coming winter. The country has no money for gas. But what is much worse that termination of coal supplies from Donbass significantly aggravates the current energy recession.

In such a critical situation instead of purchasing gas in Russia Kiev has actively started using gas from underground gas storages (UGS) to meet significantly growing internal demand. It is very important that UGS are primarily intended for providing peak volumes of transit to Europe. Therefore, their main goal is to ensure a prompt technical support in case of increase in gas demand in EC countries caused by fall of temperature in winter. This means that in fact Ukraine does not observe key conditions for reliable transit without which the gas agreements signed by Russia and Ukraine with the mediation of the European Commission will not guarantee us an adequate energy security in Europe.

As you can see on the threshold of the predicted harsh winter these Ukrainian underground storages have become a subject of special concern and attention for Europeans. It is hardly possible to imagine paintings illustrating how these UGS look like.

Deteriorating capacities of these UGS and a total connivance of Ukrainian authorities trying to solve their problems at the expense of Europe and at the expense of Russia can result in an unpleasant surprise for all of us in the coming winter when frost-bound landscapes of the old European artists after two hundred years will occur again in reality.

Would you like to speculate still further who and how much will feel cold this winter, why?

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