The wholesale price of natural gas in Europe started rising above its historical average in the summer of 2021, around the time that Russia began reducing gas pipeline exports. After reaching a level 2000% higher than its historical average in the summer of 2022, it then fell dramatically. The price is now only 30–60% higher.
Yet bills for households remain well above pre-crisis levels. As of July 2023, the typical U.K. household will pay around £2,074 per year for energy – almost double what they were paying in April of 2021. What’s more, the thinktank Cornwall Insights predicts that household energy bills will not return to their pre-crisis levels until the end of the decade “at the earliest”.
How can this be? Wholesale prices of natural gas are way down from their peak, and are now only slightly above the historical average. Why are energy bills set to remain elevated until at least 2030?
The main reason is that energy bills aren’t determined by current prices; they’re determined by the prices wholesalers paid in the recent past. And over the last two years, wholesalers have paid an absolutely huge amount for gas. Just how much?
Seb Kennedy of Energy Flux estimates that since 2021, European energy firms have spent around $1.1 trillion on gas. This is about equal to the amount they spent over the ten years between 2010 and 2020. What’s more, gas consumption has actually fallen since 2021 (which helps to explain why the wholesale price has come down) so the rise in expenditure comes entirely from an increase in price.
Kennedy admits the figure is based on a “simple calculation” and therefore has a “high margin of error”. But he believes it’s “in the right ball park”. (Note that he includes the UK, Turkey and Ukraine as part of Europe.)
Here’s more or less what happened. When gas prices spiked in the summer of 2022, European policymakers panicked. Fearing there would be shortages in the upcoming winter, they told energy firms to buy up huge quantities of LNG – with the goal of refilling gas storage. And while they succeeded in refilling gas storage, the cost of doing so was enormous.
The chart above puts the figure of $1.1 trillion into perspective. As you can see: it’s bigger than the GDP of Saudi Arabia, more than twice as big as the estimated reconstruction costs for Ukraine, and more than 44 times bigger than the cost of Hinkley Point C – the world’s most expensive nuclear power plant.
“The rush to fill underground gas storage facilities at the height of the market was understandable,” he notes, “but the costs were apparent at the time, and governments put consumers on the hook”.
Since the winter of 2022/23 passed largely without incident, it might appear that European policymakers “solved” the energy crisis. But what they really did was hide the costs. You can’t a spent a trillion dollars in two-and-a-half years and expect there not to be consequences. European citizens will be paying off the debt for years into the future.
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All the while, we have coal, gas and oil beneath our feet that the state won’t exploit.
Yes. Drilling or digging for our own fossil fuels is so much worse than paying someone else to do it for us. I mean, if we did it ourselves we’d have this useless infrastructure hanging around when the fossil fuel deadline passes.
Cancel the deadline.
It all seems so illogical until you realise the people who are buying up farmland are the globalist billionaire set and private equity firms. They have the capital to build the very expensive wind turbines. But according to green activist brochureware these once built have a near zero marginal cost producing electricity. Well that’s not actually true. The maintenance costs and amortised capital costs are actually pretty high. But be that as it may, that isn’t the important point. The important point is that, contrary to what is implied, we the public see none of those savings. Quite the opposite. We pay a green levy. But far more significantly, the cost of wind generated electricity is pegged to gas. Read that again and think about it. Consider the money involved, the amount we are being forced to pay to the already rich, the very, very lucrative near literal windfall profit opportunity it represents. A new feudal lords and surfs system is, for them tantalisingly close. You begin to get an inkling why the globalist infused deep state is promulgating a forever war in Ukraine, why there is such a push to compulsory purchase Dutch farmland and why there is such commitment to the avoidance of exploiting natural energy sources.
Check you bank savings account. It will have been converted to ESG while you weren’t looking. Those same globalists have ensured it was done. So you are no longer getting such a chunk of the profit returned as interest. Your profit is getting siphoned into other environmental businesses, such as heat pump manufacturers or insect protein farms.
Well if you can’t beat them, join them.
Nope you can’t even do that. You see these businesses are often wholly owned by private equity investment firms. Blackrock manage trillions. After all when you have the system circular and primed to siphon investor profits into your portfolio, you’re not going to let any of the oiks get in in the action.
Just another cockup.
in addition to the lockdown bill, the gas bill will also be passed to future generations. But they won’t mind as the only thing they want is to be able to change their pronouns every week while waving a rainbow flag.
Many will snap out of it. I realised I’d been duped about two weeks after Blair got into office when I voted in my first ever general election. Never voted for a left wing party since. The grooming lasted just long enough to achieve my naive vote, unfortunately! It convinced me that no one under 25 should be able to vote!
I’m being sarcastic as the majority of young people will still want to own a house rather than pursue some ephemeral and made up values brought to distract from real issues. Less and less will be able to though.
Since the EU has reduced its (cheaper) gas sales from Russia, it now relies much more heavily on (more expensive) LNG from the USA…the amount they bought doubled between 2021-2022…and that has to be passed on to the consumer…it’s like you once shopped at Aldi..and now you are being forced to shop at Harrods into the foreseeable future!
Which is exactly what the USA have always wanted..
Here’s Condoleezza Rice, making the case back in 2014….
https://www.bitchute.com/video/zOyEIn5MwVaf/
We won’t only be paying the debt off in the future..we’ll be paying it off forever..because LNG is so much more expensive it’s hard to see how Europe can ever ‘catch-up’….
It’s’ a good job us in Europe know that it was Putin who personally blew up the Nordsteam pipeline otherwise some of us might think it was the USA wot done it.
I mean it’s not as though they’re making a fortune out of flogging us LPG is it.
Nah…all those dozens of Presidents and Senators saying they’ll blow it up..or stop it …’one way or the other’…proves nowt at all!…it’s obs just mad, bad Putin!?….
“Why are energy bills set to remain elevated until at least 2030?”
Because everything is synchronised to Agenda 2030…
You will own nothing, have no secrets and be happy.
Obvs.
Surely the price of our energy is determined by the current price of gas, not the historic price.
Futures, here
https://tradingeconomics.com/commodity/eu-natural-gas