Western Europe finds itself in a precarious position. Over the summer, the region experienced record heat and wasn’t able to generate as much energy from wind plants. To power the region, energy suppliers had to dip into their stores of gas.
In the summer months, Europe usually builds up a surplus of gas to be taken from in the winter. Entering October, the region is usually above 90% of their storage capacity, but is projected to be at 78% by the end of October, a record low.
Gazprom, a Russian state-owned gas company, supplies over 40% of the natural gas in the European Union. The company has been non-committal over increasing supply, and may hold the keys to keeping Europe warm over the winter months.
Wood Mackenzie’s report does indicate that if Europe faces a relatively normal winter, they won’t hit zero on their gas reserves, but it would still likely cause prices to skyrocket. However, a worst-case scenario could see Western Europe out in the cold.
In that situation, a cold winter in both Western Europe, Russia, and Asia could lead to a shortage of gas. With Gazprom favoring the Russian market in that instance, it’ll leave the rest of Europe and Asia to fight over the leftovers. Meteorologists believe this could be yet another weak La Nina year, which has been linked to cooler winters in Europe.
European leaders have been negotiating with Russia and Gazprom to increase the supply of gas to avoid a situation where an energy disaster is a mere cubic meter away. If Nord Stream 2, a gas pipeline through the Baltic sea that goes from Russia to Germany, is operational for this winter, it could help Europe overcome a worst-case scenario. For Western Europe, the winter of 2021-22 could come down to how much gas flows from the east.