Exploring the gas crisis and discuss solutions

Introduction

If Russia reduces the gas flow to one-fifth while the price hits tenfold, then simple math teaches us that Russia is making twice as much money.

This sounds strange because any businessman knows he gets richer when selling more and poorer when selling less. 

The problem here lies in monopolism. If you are a monopolist and sell something that is much needed, you'll get richer by selling less. Russia knows that and Opec knows it. 

However, the new tricky aspect of this gas crisis is that it is mainly a European problem, as today, gas in the US is ten times cheaper than in the EU. This gives our industry unfair competition against the rest of the producing world, which is different from the Corona crisis where all countries were hit.

I would like to raise solution proposals and invite everybody to participate

1 Our gas net

our European gas net brings energy to each street, each family in town, and each factory. It has cost trillions of investments to build it.

Taking the Netherlands as an example, we see that their gas net transports about 5 times more energy than the electric net. In other words, our European electric net needs to be extended with a multiple in order to replace the gas net. This needs to be done quickly, but my take is it will still take at least ten years. So for the time being, we still need our valuable gas net in order to survive.

Hydrogen is already in a run. However, Hydrogen is much thinner than natural gas and would risk leakage and explosions if pumped in a pure form through our gas net. So we'll need to 'thicken' hydrogen or convert it into a gas that is more compatible with our gas net. I invite every University and research center in Europe to work on this, as this is highly essential for a speedy transition to green!

Furthermore, biogas production and making it compatible for injection into our gas net must be accelerated drastically! This demands cooperation with our farmers and incentivization.

2 Gas in the North Sea.

Gas fields in the North Sea can greatly help to get us through the coming years. However, I don't see European drill rigs popping up everywhere. I know the concern of the environmental movement that I largely support. But my answer is this: In order to make the green transition, we need energy! We need energy to produce the infrastructure that will take us to a green economy. For our green transition, we also need to import certain materials, which we can only do if we produce enough in Europe to keep our Euro strong so that we can afford to import such products. So, our productivity is essential for the green transition, for which we need energy.

3 Nuclear

I can't believe hearing myself saying this, but we can't afford to say goodbye to nuclear energy. But we must continue in a responsible way.  Maintenance and innovation on our nuclear plants were not done with a long-term vision as we thought to phase out on nuclear anyway. This comes with safety risks in the longer run. We really need to refocus entirely on this!

4 Pipelines

the extension of pipelines to other gas-producing countries is already treated extensively in Europe, so I don't need to comment on that.

5 A higher stake in energy from the state!

A free market with a free economy is wonderful. However, energy with its distribution net, has monopolistic aspects due to its very character. It also supports the strategic interests of the country. Privatization of everything is not the solution in this case.  Again, I refer to the Netherlands as an example, where Gasunie is state-owned. We really need a higher involvement of the states in energy to get us out of the gas crisis and to defend our strategic interests.

6 More secrecy on tactics

There could be more secrecy on tactic steps that Europe will take to cope with Russia's energy cuts. Such plans might get sabotaged by turning the tap further down.

For instance, Germany's gas reserve planning is not something that the whole world should know. I recognize that openness to the people is a valuable asset in our free democracy, but if war is involved, it is not always possible to give away one's tactics.  

Please participate in the discussion with your opinion and additional ideas are very welcome.