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The EU says its gas reserves are ready for the winter. But there’s a catch — RT Business News

Despite significant caveats, member states appear to have little control over the bloc’s hoarded fuel

As the European Union scrambles to prepare for a total suspension of Russian energy supplies ahead of the winter season, gas storage has become a national security priority. The bloc has set mandatory levels to replenish reserves to meet strong demand. RT examines the degree of authority Member States actually have over these stockpiles in the event of an emergency.

  1. How full are stores in the EU at the moment?
    EU countries have already reached the target of filling their natural gas storage sites 80% by November. Levels were around 94% this week, in line with their average over the 2017-2021 period, according to data from Gas Infrastructure Europe (GIE). The bloc’s biggest economy, Germany, had its stores 93% full – close to Berlin’s target of 95% full in November.
  2. Where are the block’s main storage facilities located?
    Storage capacity in the EU is unevenly distributed with large installations in France, Germany, Italy and the Netherlands. Germany is home to the biggest stores on the block. The EU has the capacity to store more than 117 billion cubic meters (bcm) of natural gas, around a fifth of its annual consumption, according to the GIE.
  3. Who controls the stored gas?
    There is a lack of transparent data on who controls the stock, but it turns out that national governments have little or no control over supplies. According to data compiled by Bloomberg, only around 10% of the gas in Italy’s storage facilities in the Netherlands is under the direct control of public officials through national strategic reserves. The rest is in the hands of international trading companies, such as Glencore and Vitol, energy utilities and industrial groups. These companies are free to sell to the highest bidder, even if it is in another country, while their main interest is to maximize their profit margins.
  4. How is the fuel distributed?
    The bloc’s gas network is supposed to work by allowing supplies to flow between markets. As long as there is enough fuel in the system, it should balance out. However, in an emergency, governments can order a required amount of gas from these reserves. Rich countries can outbid poor countries for gas supplies. That could leave neighboring states facing shortages.
  5. Is there a solution?
    The creation and acquisition of gas and storage sites for government-controlled strategic reserves are among the proposals for the bloc’s long-term energy security. This would mean a centralized European platform where member states could jointly buy gas and use it to create strategic reserves. In other words, countries would share their gas storage between them. However, the process of setting up such a platform could take years, experts warn.
  6. Could the gas-sharing strategy work?
    Gas sharing pacts between member states are part of a wider European mechanism for energy emergencies. They ensure that one country will supply the other if it does not have enough gas to meet the needs of households and social services, which enjoy special protection under EU law. Joint purchases of natural gas by member states could help avoid competition within the bloc and further price hikes, according to the European Commission. However, with the worsening energy crisis in the Union, some countries have refrained from engaging in such solidarity agreements.
  7. What does the EU have in store?
    The bloc’s gas network has not worked in a scenario like the current crisis, experts say, noting that much will depend on the weather. According to consultancy Wood Mackenzie, in the event of a cold winter, stocks could fall below 10% by the end of March, which could trigger a new rush for supplies before next winter. Some traders and analysts have warned that the real test will be to fill stores next year without Russian gas supplies and the EU’s target will rise to 90% by November 1.

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