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Natural gas suppliers in recent days have increased their stocks at a time when they're usually being drawn down - an unexpected boost that has relieved fears of gas used to heat homes, generate electricity and power factories running out by winter's end.

Here are key facts about Europe's energy struggles:

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WHY IS EUROPE FACING LESS RISK OF GAS SHUTOFFS?

Warm weather has allowed Europe's storage facilities to remain 83% full since Jan. 1, with levels even rising on some days. That's extraordinary. Gas reserves are usually drawn down starting in October and refilled the next spring.

"We have prevented the worst that we were threatened with in summer ... a complete economic meltdown for German and European industry," said German Energy Minister Robert Habeck told reporters last week.

Simone Tagliapietra, energy policy expert at the Bruegel think tank in Brussels, put it this way: "The energy crisis per se is not over, but the peak of the emergency has been avoided."

WHAT DOES THIS MEAN FOR UTILITY BILLS?

Consumers may avoid further extreme price spikes, but bills will stay higher than usual because gas prices are still far above where they were in early 2021.

That has been key for small businesses that use a lot of energy, such as Andreas Schmitt's chain of 25 Cafe Ernst bakeries in the region around Frankfurt.

The price caps "have helped calm down the worst expectations" from this summer, said Schmitt, also vice chairman of the baker's guild in the Hesse region of southwestern Germany.

At the peak of energy prices in August, he faced an 800,000-euro ($858,120) increase in gas and electric costs to run his ovens and light his stores for 2023. Now, he's looking at a jump of 300,000 euros.

"That is not nice but it's survivable," Schmitt said.

Even with the energy caps, 8.8 million households in Germany are facing an average price increase of 38%, or 586 euros for a family of four, this year, according to price comparison website Check24.

Without the price relief, it would have been a 58% increase, or 911 euros more out of pocket.

Such support raises budget deficits, and not all 27 European Union countries are as strong financially as Germany, which could afford a 200 billion-euro rescue package.

"My worry is that it's not sustainable," said Agata Loskot-Strachota, senior fellow at the Center for Eastern Studies in Warsaw. "And the other thing is differences between member states regarding the level of state financing that can be granted in longer terms. And these differences may fuel political differences in Europe."

WHAT HAPPENED TO PUTIN'S ENERGY WAR AGAINST EUROPE?

Europe's success in filling storage means Putin has lost much of his energy leverage over Europe, analysts and politicians say.

Surprisingly, some Russian gas is still flowing to Europe through pipelines crossing Ukraine to Slovakia and under the Black Sea to Turkey and on to Bulgaria.

"I think this supply is a sign of weakness," Tagliapietra said. With global oil prices low and Russia being a major exporter, "they need the cash."

Oil prices have been slack due to fears of slowdowns in major economies such as the U.S. and Europe as inflation and higher interest rates hold back growth.

President Vladimir Putin has said Russia will cut off oil to countries obeying the cap. But because it was set above the current price of Russian oil, it hasn't led to Moscow slashing production. Much of the Russian oil shunned by Western buyers has been shipped to India and China at a steep discount.

WHAT COULD STILL GO WRONG?

Europe is vulnerable to unexpected events, such as an accident or technical problem at a major pipeline or LNG export terminal, extreme weather, or low levels of wind or hydroelectric power.

In that case, Europe would face higher costs to acquire gas, and the losers would be poorer countries in Asia and Africa that don't have the money to compete.

While Putin's response to the oil price cap was muted, he may still have energy cards to play given Russia is a major oil supplier and is still sending some gas to Europe, said Loskot-Strachota from the Center for Eastern Studies.

"In general, the response has been rather weak, but will that be it?" she said. "The energy crisis is not gone. We are not experiencing the worst-case scenario, but the factors of uncertainty are not gone."

Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Europe Has Avoided Energy Collapse. but Is the Crisis Over?

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FRANKFURT, Germany (AP) - Europe has dodged an energy apocalypse this winter, economists and officials say, thanks to unusually warm weather and efforts to find other sources of natural gas after Russia cut off most of its supply to the continent.

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The energy crisis provoked by the war in Ukraine may prove so economically destructive to both Russia and the European Union that it could eventually diminish both as great powers on the world stage. The implication of this shift-still dimly understood-is that we appear to be moving swiftly to a bipolar world dominated by two superpowers: China and the United States.

If we consider the post-Cold War moment of unipolar U.S. dominance as lasting from 1991 to the financial crisis of 2008, then we can treat the period from 2008 to February of this year, when Russia invaded Ukraine, as a period of quasi-multipolarity. China was rising fast, but the EU's economic size-and growth prior to 2008-gave it a legitimate claim as one of the world's great powers. Russia's economic resurgence since about 2003 and continued military strength put it on the map as well. Leaders from New Delhi to Berlin to Moscow hailed multipolarity as the new structure of global affairs.

The ongoing energy conflict between Russia and the West means that period of multipolarity is now over. Though Russia's arsenal of nuclear weapons will not go away, the country will find itself a junior partner to a Chinese-led sphere of influence. The relatively small impact of the energy crisis on the U.S. economy, meanwhile, will be cold comfort for Washington geopolitically: The withering of Europe will ultimately degrade the power of the United States, which has long counted the continent as a friend.

The energy crisis provoked by the war in Ukraine may prove so economically destructive to both Russia and the European Union that it could eventually diminish both as great powers on the world stage. The implication of this shift-still dimly understood-is that we appear to be moving swiftly to a bipolar world dominated by two superpowers: China and the United States.

If we consider the post-Cold War moment of unipolar U.S. dominance as lasting from 1991 to the financial crisis of 2008, then we can treat the period from 2008 to February of this year, when Russia invaded Ukraine, as a period of quasi-multipolarity. China was rising fast, but the EU's economic size-and growth prior to 2008-gave it a legitimate claim as one of the world's great powers. Russia's economic resurgence since about 2003 and continued military strength put it on the map as well. Leaders from New Delhi to Berlin to Moscow hailed multipolarity as the new structure of global affairs.

The ongoing energy conflict between Russia and the West means that period of multipolarity is now over. Though Russia's arsenal of nuclear weapons will not go away, the country will find itself a junior partner to a Chinese-led sphere of influence. The relatively small impact of the energy crisis on the U.S. economy, meanwhile, will be cold comfort for Washington geopolitically: The withering of Europe will ultimately degrade the power of the United States, which has long counted the continent as a friend.

Cheap energy is the bedrock of the modern economy. Though the energy sector, in normal times, accounts for only a small fraction of total GDP for most advanced economies, it has an outsized impact on inflation and input costs for all sectors because of its ubiquity in consumption.

European electricity and natural gas prices are now close to 10 times their historical average in the decade leading up to 2020. This year's massive uptick is almost entirely due to Russia's war in Ukraine, though it was exacerbated by extreme heat and drought this summer. Until 2021, Europe (including the United Kingdom) depended on Russian imports for about 40 percent of its natural gas as well as a sizable share of its oil and coal needs. Months before its invasion of Ukraine, Russia began manipulating energy markets and driving up prices for natural gas, according to the International Energy Agency.

Europe's energy costs approximately 2 percent of GDP in normal times, but it has soared to an estimated 12 percent on the back of surging prices. High costs of this magnitude mean that many industries across Europe are scaling back operations or shutting down completely. Aluminum manufacturers, fertilizer producers, metal smelters, and glassmakers are especially vulnerable to high natural gas prices. This means Europe can expect a deep recession in the coming years, though economic estimates of exactly how deep vary.

To be clear: Europe will not get poor. Nor will its people freeze this winter. Early indicators suggest the continent is doing a good job cutting consumption of natural gas and filling its storage tanks for the winter. Germany and France have each nationalized major utilities-at considerable expense-to minimize disruptions to energy consumers.

Instead, the real risk the continent faces is loss of economic competitiveness because of slow economic growth. Cheap gas depended on a false faith in Russian reliability, and that's gone forever. The industry will gradually adjust, but that transition will take time-and could lead to painful economic dislocations.

These economic woes have nothing to do with the clean energy transition or the EU's emergency response to market disruptions caused by the war in Ukraine. Instead, they can be traced to Europe's past decisions to develop an addiction to Russian fossil fuels, especially natural gas. Though renewables like solar and wind can eventually replace fossil fuels in providing cheap electricity, they cannot easily supplant natural gas for industrial uses-especially since imported liquified natural gas (LNG), a frequently touted alternative to pipeline gas, is considerably more expensive. Attempts by some politicians to blame the clean energy transition for the ongoing economic storm are thus misplaced.

The bad news for Europe compounds a preexisting trend: Since 2008, the EU's share of the global economy has declined. Though the United States recovered from the Great Recession relatively swiftly, European economies struggled mightily. Some of them took years to regrow just to pre-crisis levels. Meanwhile, economies in Asia were continuing to grow at eye-popping rates, led by China's massive economy.

Between 2009 and 2020, the EU's GDP annual growth rate averaged just 0.48 percent, according to the World Bank. The U.S. growth rate over the same period was almost three times higher, averaging 1.38 percent per year. And China grew at a blistering pace of 7.36 percent annually over the same period. The net result is that, while the EU's share of global GDP was larger than those of both the United States and China in 2009, it is now the lowest of the three.

As recently as 2005, the EU accounted for as much as 20 percent of global GDP. It will account for just half that amount in the early 2030s if the EU economy shrinks by 3 percent in 2023 and 2024 and then resumes its tepid pre-pandemic growth rate of 0.5 percent per year while the rest of the world grows at 3 percent (the pre-pandemic global average). If the 2023 winter is cold and the coming recession proves to be severe, Europe's share of global GDP could fall even faster.

Worse still, Europe lags far behind other powers in terms of military strength. European countries have skimped on military spending for decades and cannot easily make up for this lack of investment. Any European military spending now-to make up for lost time-comes at an opportunity cost for other parts of the economy, potentially creating further drag on growth and forcing painful choices about social spending cuts.

Russia's situation is arguably graver than the EU's. True, the country is still raking in huge revenues from its export sales of oil and gas, mostly to Asia. In the long run, however, the Russian oil and gas sector is likely to go into decline-even after the war in Ukraine comes to an end. The rest of the Russian economy is struggling, and Western sanctions will deprive the country's energy sector of the technical expertise and investment finances it desperately needs.

Now that Europe has lost faith in Russia as an energy provider, Russia's only viable strategy is to sell its energy to Asian customers. Happily, Asia has lots of growing economies. Unhappily for Russia, almost its entire network of pipelines and energy infrastructure is currently built for exports to Europe and cannot easily pivot east. It will take years and billions of dollars for Moscow to reorient its energy exports-and it is likely to find that it can only pivot on Beijing's financial terms. Energy sector dependence on China is likely to carry over to broader geopolitics, a partnership where Russia finds itself playing an increasingly junior role. Russian President Vladimir Putin's Sept. 15 admission that his Chinese counterpart, Xi Jinping, had " questions and concerns " about the war in Ukraine hints at the power differential that already exists between Beijing and Moscow.

Europe's energy crisis is unlikely to stay in Europe. Already, demand for fossil fuels is driving up prices around the world-especially in Asia, as Europeans outbid other customers for fuel from non-Russian sources. The consequences will be especially hard on low-income energy importers in Africa, Southeast Asia, and Latin America.

Shortages of food-and high prices for what is available-could pose even more of a problem in these regions than energy. The war in Ukraine has spoiled the harvests and transportation routes of vast amounts of wheat and other grains. Major food importers like Egypt have reason to be nervous about the political unrest that often accompanies rising food costs.

The bottom line for world politics is that we are moving toward a world where China and the United States are the two paramount world powers. The sidelining of Europe from world affairs will hurt U.S. interests. Europe is-for the most part-democratic, capitalist, and committed to human rights and a rules-based international order. The EU has also led the world in regulations pertaining to safety, data privacy, and the environment, compelling multinational corporations to upgrade their behavior worldwide to match European standards. The sidelining of Russia might seem more positive for U.S. interests, but it carries the risk that Putin (or his successor) will react to the country's loss of stature and prestige by lashing out in destructive ways-possibly even catastrophic ones.

As Europe struggles to stabilize its economy, the United States should support it when possible, including by exporting some of its energy resources, such as LNG. This may be easier said than done: Americans have not yet fully woken up to their own rising energy costs. Natural gas prices in the United States have tripled this year and could go higher as U.S. companies try to access lucrative LNG export markets in Europe and Asia. If energy prices increase further, U.S. politicians will come under pressure to restrict exports to preserve energy affordability in North America.

Faced with a weaker Europe, U.S. policymakers will want to cultivate a wider circle of like-minded economic allies at international organizations like the United Nations, World Trade Organization, and International Monetary Fund. This could mean a greater courting of middle powers like India, Brazil, and Indonesia. Still, Europe seems hard to replace. The United States has benefited for decades from shared economic interests and understandings with the continent. To the extent that the economic heft of Europe now declines, the United States will face stiffer resistance to its vision for a broadly democracy-favoring international order.

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Europe's Energy Crisis Is Destroying the Multipolar World

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The energy crisis provoked by the war in Ukraine may prove so economically destructive to both Russia and the European Union that it could eventually diminish both as great powers on the world stage. The implication of this shift-still dimly understood-is that we appear to be moving swiftly to a bipolar world dominated by two superpowers: China and the United States.

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Europe is scrambling to find alternatives to Russian energy amid the war in Ukraine. With consumers facing the highest energy prices on record and potential gas rationing or blackouts this winter, there are fears of an even worse crisis next year.

European Union (EU) countries are pursuing a range of replacements, but some of these have environmental drawbacks, while others could take years to be put into use. Here are four ways EU countries are reducing dependence on Russia.

Returning to Coal Temporarily

In an effort to limit natural gas usage, some European countries are burning more coal this winter, slowing previous agreements to phase it out. Coal is the dirtiest energy source, accounting for around 40 percent of global greenhouse gas emissions from fossil fuel use. However, it remains widely available and can be used immediately in existing power plants.

Germany, which has vowed to stop using coal by 2030, is shifting some power plants back to coal. Economy minister Robert Habeck called the move " bitter but indispensable" for Berlin's goal of ending all Russian gas imports by mid-2024. Likewise, France has reopened a recently closed coal plant, the Netherlands removed a production cap on coal power, and many other EU countries are similarly embracing coal.

Accessing New Sources of Gas

Nearly 40 percent of Europe's natural gas, some 155 billion cubic meters (bcm), came from Russia last year. With European homes and businesses set to be dependent on gas for at least the next decade, the search is on for other sources.

North Sea energy has already filled some of the gap. Norway overtook Russia as Europe's largest piped gas supplier after increasing output to 122 bcm this year, an 8 percent increase compared to 2021, and it opened a new pipeline to Poland in October. Denmark, the Netherlands, and the United Kingdom (UK) are also boosting production and green-lighting new gas projects, though many of these will take years to come online. Analysts say there is a ceiling to this strategy, as supplies in the North Sea are running out.

Another avenue is liquefied natural gas (LNG). The United States has said it will increase its LNG exports to the EU from fifteen bcm this year to fifty bcm annually by 2030, or about one-third of the gas supply previously provided by Russia. The increased demand has also set off a " dash for gas " from African countries with significant reserves, such as Egypt and Nigeria. Eastern Mediterranean gas production is being expanded as well. But there are difficulties: more LNG, which is shipped by sea, will require new coastal import terminals and distribution pipelines. The construction of such facilities generally takes two to three years.

Meanwhile, the EU has fast-tracked some pipeline projects, including a deal with Azerbaijan that aims to eventually double the country's current eight bcm per year of gas exports. But other accelerated pipeline plans have faced legal challenges from conservation groups. Environmental advocates worry that investing in new natural gas infrastructure will disincentivize the switch to renewables.

Renewing Nuclear

There remains no consensus on nuclear energy among EU countries; about half currently produce any. France leads the bloc, using nuclear for nearly 70 percent of its electricity needs. At the other extreme is Germany, which had planned to shut down its last plants this year. In the 1990s, it was getting one-third of its power from nuclear sources.

Russia's war has shifted the debate. Germany has now put off closing its remaining three nuclear plants until at least 2023. Several other European countries, including Finland, Spain, and Sweden, have increased their nuclear plants' capacities.

But seriously boosting nuclear energy would be challenging. More than half of France's reactors are currently shut down due to maintenance issues, limiting its export abilities. Germany's reactors account for just 6 percent of its electricity, but building more would take nearly a decade, and Russian companies currently provide much of the uranium necessary to operate them.

Developing Renewables

The EU has rolled out an ambitious renewable energy plan that it hopes will achieve two goals: reducing emissions and eliminating the need for Russian fossil fuels. The plan, known as RePowerEU, seeks to have 45 percent of the bloc's energy come from renewable sources by 2030, up from 22 percent in 2020. The EU foresees investing more than $210 billion in the plan by 2027. This will build upon previous plans to achieve net-zero emissions by 2050, meaning the amount of greenhouse gas emitted would be equal to the amount removed from the atmosphere.

In addition, the EU has pledged to invest in infrastructure for hydrogen and biomethane, which are cleaner alternatives to gas, while doubling wind and solar capacity. EU members also aim to decrease overall energy consumption by 15 percent through voluntary measures such as turning down the heat in public buildings and encouraging the public to limit use of household appliances.

Proponents of the plan say that these measures taken together can replace some two-thirds of the energy previously supplied by Russia. Still, the International Energy Agency forecasts that although the EU will dramatically expand use of renewables by 2030, it will fall short of the RePowerEU goal due to challenges in boosting renewable capacity.
Jacqueline Jedrych is an editorial intern at CFR.

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The EU Needs Alternatives to Russian Energy. Here's the Plan.

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Europe is scrambling to find alternatives to Russian energy amid the war in Ukraine. With consumers facing the highest energy prices on record and potential gas rationing or blackouts this winter, there are fears of an even worse crisis next year.

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Europe's green energy policies empowered Russian President Vladimir Putin and stripped Western countries of their ability to sanction Moscow effectively, according to the best-selling author of "Apocalypse Never."

"You're not really an independent nation if you depend on foreign countries so heavily for your energy supplies," Michael Shellenberger told Fox News. He said European nations have become increasingly dependent on Russia for energy in recent years as they have adopted green policy initiatives.

The continent imports nearly 40% of its gas from Russia, according to the Associated Press. It consumes nearly five times as much oil as it produces, and Russia produces nearly four times as much oil as it consumes, according to British Petroleum.

Europe's dependency on Russian energy limits its ability to take actions such as imposing economic sanctions against Russia in response to the conflict in Ukraine, according to Shellenberger.
UKRAINE CONFLICT 'HEIGHTENS THE RISK' OF CHINESE-AMERICAN WAR, PROFESSOR SAYS
"Fifteen years ago, Europe produced more natural gas than Russia," Shellenberger said. "Today, Russia exports three times more natural gas to Europe than Europe produces."

" That's due both to the fact that Russia increased its natural gas production and Europe reduced it," he added.

"Europe decided not to frack in large part in response to climate activists," Shellenberger told Fox News. "We now think there is strong evidence suggesting [the climate activists] were supported directly through financing from Russia."

Moscow intelligence agencies, for example, secretly supported European environmental groups in campaigns against fracking in order to keep the European Union dependent on Russian exports, according to a 2018 congressional report.

But environmental activist groups do not disclose their donors, so any benefactors of Russia's donations remain unknown, according to Shellenberger.

Additionally, Europeans became more reliant on Russian energy because of nuclear energy policies.

Putin "expanded nuclear power at home so that he could export more natural gas abroad rather than use it for electricity production," Shellenberger said. "Europe shut down its nuclear plants and declined to build new ones."

Russia's nuclear power capacity has increased by 33% since 2002, according to the World Nuclear Association. Germany's nuclear capacity has decreased by over 80% in that time period.

"That has proven to be catastrophic as the continent became increasingly dependent on Russia for energy imports," Shellenberger told Fox News.

Shellenberger described rising oil costs and foreign dependencies as "the worst energy crisis since 1973."

"I think the chances are very high that it's going to result in a global recession," Shellenberger told Fox News. "When oil prices reach these levels, they tend to trigger recessions."

DataTrek Research co-founder Nicholas Colas recently told Barron's: "History shows that a 100% increase in oil prices over a year usually triggers a recession (1990, 2000, 2008). We're not quite there yet, but we are getting closer by the day.

Crude oil reached $130 per barrel Sunday evening, according to CNBC. A year ago, it was $63.81.

Shellenberger said oil prices could hit $200 per barrel.

European reliance on Russian energy leaves Western countries with little leverage against Putin in the ongoing conflict in Ukraine, according to Shellenberger.

President Biden announced on Tuesday a ban on U.S. imports of Russia oil. Last year, the U.S. imported 7% of its petroleum from Russia, according to the U.S. Energy Information Administration.

"Our hearts are with the Ukrainians," Shellenberger said. "We would love to be able to punish the Russians and stop importing their energy, but efforts to do that will make energy more expensive."

"It was always predictable," Shellenberger said of the energy crisis and European dependence on Russian energy. "This was all very apparent to people that were rational thinkers on energy."

Prosperity, sovereignty and energy independence are all interconnected, according to Shellenberger.

"There is no low-energy rich nation, just as there is no high-energy poor nation," he said.

"I hope it's a wake-up call," Shellenberger told Fox News. "At best, we can hope to avoid a global recession, but that's going to require a significant expansion of energy supplies in the United States and Europe as quickly as we can."

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Europe's green energy policies strengthened Putin, Michael Shellenberger says

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Europe's green energy policies empowered Russian President Vladimir Putin and stripped Western countries of their ability to sanction Moscow effectively, according to the best-selling author of "Apocalypse Never." "You're not really an independent nation if you depend on foreign countries so heavily for your energy supplies," Michael Shellenberger told Fox News.

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2-Minute Showers and a Flotilla of Gas Shipments: Europe Braces for Winter

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Countries across the continent have taken extraordinary steps to decrease energy use and ramp up supply, moving swiftly away from their longtime primary provider, Russia.

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If Vladimir Putin intended to paralyze Europe's energy system by slashing exports of Russian gas to the continent, it hasn't worked for now. The doomsday scenario of rolling blackouts failed to materialize thanks to an unusually mild winter, power rationing and a shift to other energy sources. Yet the region's economies aren't out of the woods: The crisis left households and businesses grappling with record-high electricity prices that sparked runaway inflation and higher interest rates. And as war rumbles on in Ukraine and Russian gas supplies slow to a trickle, Europe's energy security appears more vulnerable than ever to unpredictable global events.

1. How did we get here?

Even before the Russian president launched his invasion of Ukraine in February 2022, Europe's energy system was under strain. Demand for power had soared as economies bounced back from pandemic lockdowns and a long, harsh winter boosted demand for heating. Electricity producers struggled to respond as the natural gas that feeds many power stations was in short supply and unusually low wind speeds cut output from the wind turbines that had become a vital part of the continent's energy mix. The result: power prices more than tripled in the second half of 2021. Then Russia's military campaign triggered sanctions against Moscow and Putin hit back by weaponizing gas. By September 2022, Russia had halted all supplies through a key pipeline to Germany. The euro tumbled as investors priced in the expected hit to Europe's economy.

2. How did Europe avoid an energy breakdown?

Firstly, by consuming less. As electricity and gas prices rose to at least four times above historical norms, home and business owners cut their energy use to make bills affordable. Governments suppressed consumption by dialing down heating and lighting at state institutions, from municipal swimming pools and gyms to presidential palaces. People took shorter showers, lowered thermostats and better insulated their homes. The crisis entrenched what French officials called "energy sobriety," with Morgan Stanley forecasting that Europe's gas usage would be about 16% below its five-year average throughout 2023. Factories in Western Europe were using around a quarter less gas than usual between August and the end of 2022, according to BloombergNEF estimates. Even so, production has continued to expand. In November 2022, manufacturing output in the euro area stood 3% above its 2021 average.

3. How did Europe replace Russian energy?

Norway supplanted Russia as the region's biggest gas supplier, with exports gaining 8% in 2022. Germany and the Netherlands installed new facilities to offload liquefied natural gas shipped from as far afield as Qatar, the US and Australia. Imports of LNG to Europe's main markets roughly doubled in 2022, according to Morgan Stanley. Germany also extended the lives of its remaining nuclear reactors and revived some coal-fired power stations that it had mothballed due to their large carbon footprint. Use of hard coal and lignite to generate power in the EU rose by 6% in 2022 from a year earlier.

4. Did it work?

Lights stayed on and most factories kept humming. And Europe never came close to running out of gas, thanks partly to the milder than average winter that cut demand for heating. Cities from Berlin to Warsaw recorded their warmest ever start to the year in 2023, allowing utilities to refill gas storage sites and giving Europe a vital buffer for the next winter. Gas prices in January were below their level when the Ukraine war started, and 80% down from their August peak - though still well above historical averages. Power prices fell by a similar amount.

5. So is the crisis coming to an end?

Not yet. Governments have spent more than $700 billion to shield households and businesses from surging energy prices. And that won't stop what's likely to be a prolonged recession and a sharp decline in living standards across the region. Removing the bulk of Russian gas and oil from Europe's energy mix has left prices hostage to bigger price swings and the resulting risk premium could leave consumers paying more for years to come.

6. Why was Europe so reliant on Russian energy?

Russia has been one of the world's biggest exporters of gas, and Europe was its top customer. As coal and nuclear plants across the bloc were shuttered in recent years, Germany and some other countries became even more reliant on the giant pipelines carrying gas from Siberia. European officials talked about the need to reduce this dependency. But since both sides benefited, and gas delivered by pipeline was often cheaper (and cleaner) than other energy sources, little action was taken. When the conflict in Ukraine erupted, it was suddenly untenable for Europe to be spending as much as $1 billion a day on gas, oil and coal imported from Russia - money funding its war machine.

7. Has Europe stopped using Russian energy for good?

Not quite. Pipeline deliveries via Ukraine dwindled to just 3% of demand in western and central Europe in the fourth quarter, but Russia was still Europe's third-biggest LNG supplier in 2022, according to Morgan Stanley. Whether flows will drop to zero, and if so when, is hard to say. While energy analysts are factoring it into their models, neither Russia nor the EU have suggested there'll be a complete halt anytime soon. EU sanctions on Moscow aim to phase out imports of Russian energy but the timing depends partly on how easily alternative sources can be found - a particular challenge for eastern European nations. Gas is still flowing via Ukraine and a pipeline via Turkey into the Balkans is also operational.

8. Are there downsides to quitting Russian gas?

Diversifying energy supplies is generally a good thing, but relying more on the global market for natural gas comes with risks. It's a commodity used increasingly across the globe and European utilities are competing with buyers from Asia. Any rebound in China's economy, the world's biggest, could increase competition for the fuel and send prices surging. LNG is also more carbon intensive than piped gas.

9. What does it all mean for Europe's green ambitions?

In the short term, the revival of some coal-fired power stations looks like bad news for the climate. Further out, the crisis has made European governments more determined to ditch Russian energy - and fossil fuels in general - and accelerate adoption of cleaner technologies. Output of solar and wind power jumped 12% in 2022, boosted by more installations and a recovery in wind speeds. The International Energy Agency said in December that it sees global deployment of clean energy like wind farms and solar parks almost doubling in the next five years. For now, policymakers have stuck with the EU's flagship climate policy, the Green Deal, which includes a package of laws to zero out greenhouse gas emissions by mid-century. The 27 countries of the EU got about a fifth of their total energy from renewables in 2020 and had planned to double that share to 40% by 2030. In the wake of the war in Ukraine, the target was raised to 45%.

* Related QuickTakes on the role of LNG in Europe, how the continent got hooked on Russian gas, why governments want to change the way power gets priced and how power trading keeps the lights on.

* Bloomberg Opinion's Javier Blas on how warmth and wind power are helping Europe out of a bind.

* Bloomberg Economics says the energy crisis hit German factories hard, but they are adapting.

* A data vizualization on how Russia's war in Ukraine has choked the world's supply of natural resources.

* A story from March on Europe's mission to ditch Russian oil and gas.

--With assistance from Anna Shiryaevskaya and Kari Lundgren.

More stories like this are available on bloomberg.com

©2023 Bloomberg L.P.

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Analysis | How Europe Is Muddling Through Putin's Energy War

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If Vladimir Putin intended to paralyze Europe's energy system by slashing exports of Russian gas to the continent, it hasn't worked for now. The doomsday scenario of rolling blackouts failed to materialize thanks to an unusually mild winter, power rationing and a shift to other energy sources.

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This source published by the European Commission focus on the Electricity Market Design. This is needed to help better shield households and businesses from high energy prices, to increase resilience, and to accelerate the transition set out in the EU Green Deal and REPowerEU plan.

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European Commission - European Commission

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Giulia Bedini lives in the Brussels Metropolitan Area, and currently works as a Press Officer for Energy for the European Commission. Loves to travel, and is talented as she works in various multi-cultural and multi-language contexts.

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Giulia Bedini - Press Officer for Energy - European Commission | LinkedIn

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Prone to traveling and working in multi-cultural and multi-language contexts, I am a hard worker ready to stick to precise goals and able to meet deadlines. Always searching for growth opportunities. | Learn more about Giulia Bedini’s work experience, education, connections & more by visiting their…

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Ana Crespo Parrondo is a Press Officer and Spokesperson's. for Climate Action and Energy. She presides in the Brussels Region, Belgium. Communications Specialist with proven experience managing strategic communications, media relations, social media and outreach activities across the public, private & non-profit sectors.

Her focus: human rights, sustainable development, climate diplomacy, energey and gender equality issues.

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Ana Crespo Parrondo - Press Officer for Climate Action and Energy – European Green Deal Team - European Commission | LinkedIn

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Communications Specialist with proven experience managing strategic communications, media relations, social media and outreach activities across the public, private & non-profit sectors.

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An interesting point that I got from this is that Russia is actually hurting from Europe's Success. This is because Russia is no longer getting the money for gas from Europe.

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FRANKFURT, Germany (AP) - Europe has dodged an energy apocalypse this winter, economists and officials say, thanks to unusually warm weather and efforts to find other sources of natural gas after Russia cut off most of its supply to the continent.

Natural gas suppliers in recent days have increased their stocks at a time when they're usually being drawn down - an unexpected boost that has relieved fears of gas used to heat homes, generate electricity and power factories running out by winter's end.

As a result, short-term gas prices have fallen from record highs, dropping from 18 times what they were before Russia massed troops on Ukraine's border in early 2021 to four times higher. That's still painfully high, eating away at company earnings and consumer spending power through costly utility bills and inflation.

But analysts say the worst case of shortages and rationing has been avoided.

Here are key facts about Europe's energy struggles:

WHY IS EUROPE FACING LESS RISK OF GAS SHUTOFFS?

Warm weather has allowed Europe's storage facilities to remain 83% full since Jan. 1, with levels even rising on some days. That's extraordinary. Gas reserves are usually drawn down starting in October and refilled the next spring.

Record-high temperatures - which have hurt businesses dependent on snow sports - come top of a scramble to find new suppliers to replace most Russian gas, which Europe depended on before the war. Moscow has shut off most of its supply to Europe as governments imposed sanctions and supported Ukraine.

Countries have lined up expensive supplies of liquefied natural gas - which comes by ship, instead of pipeline - from the U.S. and Qatar. Germany leased five floating import terminals for LNG for almost 10 billion euros, the first of which arrived in November.

Industry has reduced use, sometimes simply by halting energy intensive production such as fertilizer or steel that was no longer profitable at high prices.

"We have prevented the worst that we were threatened with in summer ... a complete economic meltdown for German and European industry," said German Energy Minister Robert Habeck told reporters last week.

Simone Tagliapietra, energy policy expert at the Bruegel think tank in Brussels, put it this way: "The energy crisis per se is not over, but the peak of the emergency has been avoided."

WHAT DOES THIS MEAN FOR UTILITY BILLS?

Consumers may avoid further extreme price spikes, but bills will stay higher than usual because gas prices are still far above where they were in early 2021.

Some relief has come from government support. In Germany, Europe's largest economy, the government passed gas and electric price caps allowing small businesses and consumers to buy 80% of their energy at last year's price.

That has been key for small businesses that use a lot of energy, such as Andreas Schmitt's chain of 25 Cafe Ernst bakeries in the region around Frankfurt.

The price caps "have helped calm down the worst expectations" from this summer, said Schmitt, also vice chairman of the baker's guild in the Hesse region of southwestern Germany.

At the peak of energy prices in August, he faced an 800,000-euro ($858,120) increase in gas and electric costs to run his ovens and light his stores for 2023. Now, he's looking at a jump of 300,000 euros.

"That is not nice but it's survivable," Schmitt said.

Even with the energy caps, 8.8 million households in Germany are facing an average price increase of 38%, or 586 euros for a family of four, this year, according to price comparison website Check24.

Without the price relief, it would have been a 58% increase, or 911 euros more out of pocket.

Such support raises budget deficits, and not all 27 European Union countries are as strong financially as Germany, which could afford a 200 billion-euro rescue package.

"My worry is that it's not sustainable," said Agata Loskot-Strachota, senior fellow at the Center for Eastern Studies in Warsaw. "And the other thing is differences between member states regarding the level of state financing that can be granted in longer terms. And these differences may fuel political differences in Europe."

WHAT HAPPENED TO PUTIN'S ENERGY WAR AGAINST EUROPE?

Europe's success in filling storage means Putin has lost much of his energy leverage over Europe, analysts and politicians say.

Surprisingly, some Russian gas is still flowing to Europe through pipelines crossing Ukraine to Slovakia and under the Black Sea to Turkey and on to Bulgaria.

"I think this supply is a sign of weakness," Tagliapietra said. With global oil prices low and Russia being a major exporter, "they need the cash."

Oil prices have been slack due to fears of slowdowns in major economies such as the U.S. and Europe as inflation and higher interest rates hold back growth.

A European ban on most Russian oil starting Dec. 5 did not create a sudden surge in global oil prices and neither did a price cap from the Group of Seven leading democracies on Russian crude to other countries. The $60-per-barrel price cap is enforced by banning insurers - mostly based in Europe or the U.K. - from handling Russian oil sold above the cap.

President Vladimir Putin has said Russia will cut off oil to countries obeying the cap. But because it was set above the current price of Russian oil, it hasn't led to Moscow slashing production. Much of the Russian oil shunned by Western buyers has been shipped to India and China at a steep discount.

While oil prices have fallen from highs of $120 a barrel this summer, things could change. Oil products such as diesel could get more expensive in Europe once a ban on those supplies from Russia takes effect Feb. 5.

WHAT COULD STILL GO WRONG?

Europe is vulnerable to unexpected events, such as an accident or technical problem at a major pipeline or LNG export terminal, extreme weather, or low levels of wind or hydroelectric power.

Energy analysts are watching energy demand from China, where fuel use plummeted during its "zero COVID" policy that sharply restricted movement to prevent the spread of the virus. Since China has loosened restrictions, demand for shiploads of liquefied gas could rise later this year once a COVID-19 wave subsides.

In that case, Europe would face higher costs to acquire gas, and the losers would be poorer countries in Asia and Africa that don't have the money to compete.

The International Energy Agency has warned Europe not to get overconfident, saying a scenario where Russia cuts off its remaining supply and Chinese demand rebounds could leave Europe short of gas for next winter. The IEA called for a strong push on renewable energy and efficiency measures such as energy-saving heat pumps to replace furnaces, calling such steps "vital to head off the risk of shortages and further vicious price spikes next year."

While Putin's response to the oil price cap was muted, he may still have energy cards to play given Russia is a major oil supplier and is still sending some gas to Europe, said Loskot-Strachota from the Center for Eastern Studies.

"In general, the response has been rather weak, but will that be it?" she said. "The energy crisis is not gone. We are not experiencing the worst-case scenario, but the factors of uncertainty are not gone."

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Europe has avoided energy collapse. But is the crisis over?

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FRANKFURT, Germany (AP) - Europe has dodged an energy apocalypse this winter, economists and officials say, thanks to unusually warm weather and efforts to find other sources of natural gas after Russia cut off most of its supply to the continent.

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Is LNG the answer to Europe’s energy crisis?

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Is LNG the answer to Europe’s energy crisis?

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One interesting thing that I got from this video is that the US is on track to be the world's largest LNG exporter. It's important to know that Europe is utilizing LNG, but it's said that LNG is not a long-term solution. This is because Europe wants to go green when it comes to energy. Yes, Europe is safe for this winter, but they can't become complacent. So, in the summer, they will have to refill themselves to ensure that they are ready for the next winter.

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CNBC International - Is LNG the answer to Europe’s energy crisis? | Facebook | By CNBC International | Europe has been forced to shore up its energy supplies since Russia invaded Ukraine, averting a worst-case scenario for this winter. But next winter is a...

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68K views, 1.6K likes, 31 loves, 84 comments, 245 shares, Facebook Watch Videos from CNBC International: Europe has been forced to shore up its energy supplies since Russia invaded Ukraine, averting...

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My Hometown News Source: The Union Recorder (Milledgeville, Ga) 

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My Hometown News Source: The Union Recorder (Milledgeville, Ga) 

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The article is trying to address who is responsible for the increased fuel costs. Putin, Trump, or Biden? President Biden blames Putin for the increase in gas prices, but when he got into office, he cut off the production of the Keystone pipeline, which destroyed 10,000 jobs. This made the US dependent on oil imports from Russia, paying Putin $74 million, which supports Putin's war against Ukraine. President Biden would rather do business with foreign nations than have citizens of America work in the oil and mining industries. He could have been a hero for USA and Europe.

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For most America, gas prices are now between $4 to $6 a gallon. Which one of the three men above is responsible for the increase in the cost of fuel? Biden claims it's Putin's fault. The United States of America was totally self-sufficient of all types of fuel during the last administration thanks to President Trump. This country did not import fuel from anywhere. Biden's new regulations prevent oil production in this country today. Biden's talking heads will tell you that there are over 9,000 oil drilling permits available today, true statement. What they don't tell you is that it would be impossible to move the oil once drilled due to all of his new regulations.

The first thing that Biden did when he took office was to stop the production of the Keystone pipeline, and in the process, he personally destroyed over 10,000 jobs of hard- working Americans. Biden then became dependent on oil imports from Russia. We went from self-contained America to Biden being dependent on a communist dictator for oil.

Biden was paying Putin $74 million dollars daily for oil imports from Russia that this country once produced on its own. $74,000,000 daily goes a long way to financially support Putin's war against Ukraine.

Biden's answer to the fuel crisis that we are facing today is to have Iran, Venezuela and Saudi Arabia increase oil production so he can start importing oil from them.

Biden would rather do business with foreign nations than to have the citizens of America working in the oil and mining industries?

Biden could have been a hero for the USA and Europe had he not destroyed the fossil fuel industry in America. Putin has nothing to do with the fuel prices we are faced with today.

One last thought and I will put it to you in a question. Why do you think God placed all of the energy resources that the United States of America will ever need under the ground on which this nation stands?

So, who did you pick? My pick, Biden.

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For most America, gas prices are now between $4 to $6 a gallon. Which one of the three men above is responsible for the increase in the cost of fuel? Biden claims it's Putin's fault. The United States of America was totally self-sufficient of all types of fuel during the last administration thanks to President Trump.

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Response-- just be sure to note that this is a letter to the editor from a member of the community, not an article! Always interesting to see local reaction to international issues.

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Response-- just be sure to note that this is a letter to the editor from a member of the community, not an article! Always interesting to see local reaction to international issues.