Short-Sightedness And Failure Of Europe’s Energy Risk Mitigation Strategies

There is alarm in Europe after weeks of natural gas price fluctuations. The fears are down to – believe it or not – outages in Australia, a key liquified natural gas (LNG) exporter thousands of miles away. But this is now the old continent’s new reality – extreme vulnerability to energy shocks and a globalized market.

It all started earlier in August with the prospect of workers strikes at multiple LNG facilities in Australia and continues to rumble on. These outages are threatening to knock 10% of global LNG supplies offline; a commodity feverishly imported by the Europeans to avert an energy crisis in 2022. That’s when readily available piped natural gas imports from Russia became politically unpalatable in the wake of President Vladimir Putin’s decision to invade Ukraine.