IEA boss accuses the deliberate policies of energy producers of soaring prices

[ad_1]

By John Ainger on 11/29/2021

(Bloomberg) – Power producers – not the transition to a greener economy – are one of the main reasons for soaring natural gas and electricity prices in Europe, according to the executive director of the International Energy Agency, Fatih Birol.

The spike in prices is the result of factors such as growing demand, supply blackouts and extreme weather events, but also – I want to stress – some of the deliberate policies of energy producers, said Birol. during the European Hydrogen Week conference in Brussels. . He did not name specific producers.

Birols’ comments come as colder weather threatens to exacerbate a tight supply of natural gas that has pushed prices to record highs in recent months. European storage sites are seasonally low, and the main supplier, Russia, has indicated that it has little appetite for increasing gas flows to the continent. At the same time, competition for liquefied natural gas is fierce due to demand from Asia.

Earlier this month, Belarus threatened to shut down a key pipeline carrying Russian gas to the European Union amid a migration dispute. In September, a group of European lawmakers urged the European Commission to investigate Gazprom PJSC’s role in raising gas prices.

Meanwhile, Nord Stream 2, a pipeline project connecting Russia to Germany, remains stuck in the approval process in the run-up to US sanctions. Qatar, a major gas exporter, says it is producing what it can.

The energy crisis comes as the EU tries to shift its economy away from dependence on fossil fuels with the aim of becoming the first climate neutral continent by mid-century. A legislative package that would reduce emissions has yet to be approved by Member States. Some countries have warned that the pace of the transition could leave the continent more exposed to price spikes.

Birol said it was wrong to say that the high prices are the result of the transition to clean energy.

The IEA leader added that the policies of some producing countries do not make sense, given that gas has been touted as a fuel to help alleviate any possible price hiccups during the transition. He warned that if the problem is not addressed and assessed in the right way, it could become an obstacle to other climate policies.

The recent spikes in natural gas prices have not received high marks from millions of consumers around the world, including in Europe, Birol said. I am not sure that current gas prices are to the advantage of gas producers.

[ad_2]