LEGAL FIGHT OVER NORD STREAM 2, AS EUROPE ENERGY COSTS SOAR AHEAD OF COLD WINTER

European Parliament officials who oversee the body's work on EU gas market legislation wrote in a recent letter:

 

"The structure of the company does not guarantee its independence as an operator in relation to Gazprom, a prominent gas supplier to the EU and a dominant supplier in the CEE," 

 

It was in response to Nord Stream 2's efforts to be recognized as an independent transmission system operator. The lawmakers refused to authorize this status as it "puts at risk the security of energy supply within the EU," they said - which has been a persistent argument of Washington in seeking to block the completion of the pipeline. 

 

Ultimately the final hurdle before NS2 will actually transit gas from Russia into northeast Germany via the Baltic Sea from the St. Petersburg region will be the moment German regulators issue authorization to turn on the taps for the gas to start flowing - but this is where the final political showdown is expected. 

 

Last month Ukraine said it will pursue all avenues of action against NS2 "even after the gas is turned on" - yet it's been met with little more than a shrug in Europe, also amid recent US sanctions targeting companies involved in the NS2 construction. Ukraine stands to lose an estimated 1 billion euros ($1.2 billion) annually in transit fees from Russia as NS2 has effectively cut Kiev out as the "middle man". 

 

No mention is made of the fact, Ukraine’s transmission lines have been, and still are, in very poor condition, and increasing gas flows at higher pressures would likely lead to break-downs and explosions and NO GAS FLOW.

 

But it's no secret that time is running out ahead of frigid winter temperatures, as many have noted the obvious fact, NS2 might provide a relief from Europe's gas crisis and dwindling gas supply in storage, which has seen SPOT prices in parts of Western Europe rise by some 250%, amid persisting reserve shortages in a matter of weeks.

 

According to a quick survey of the worsening situation in Bloomberg: 

 

Global shortages of gas and coal are pushing energy prices higher, disrupting markets from the UK to China, as economies emerge from the pandemic. Surging costs are threatening to raise inflation and starting to weigh on industrial production, with some companies in Europe forced to cut output.

"The fiercely nervous sentiment on the market continues due to fears of reduced supply during the winter," trader Energi Danmark wrote in a note Tuesday. "Everything looks set for another week of price climbs."

Europe’s gas storage are at their lowest seasonal level in more than a decade, while supplies from top seller Russia are limited and global competition for liquefied natural gas continue to be intense.

 

Also commenting on the record-setting supply crunch, an industry insider - Catherine Newman, chief executive officer of Limejump Ltd., told a conference on Tuesday:  "If we have a cold start to the winter and we’re withdrawing gas, we’re not going to have any gas left by the time cold winter hits."

2021 kicked off with European gas reserves already plummeting... 

Via Reuters

Meanwhile, on Tuesday, European natural gas SPOT PRICES jumped to an unprecedented 111.70 euros per megawatt-hour, after last February being at a mere 15.49 euros.

 

The NS2 operator is at the same time seeking to assure that "Nord Stream 2 will contribute to meeting the long-term needs of the European energy market for gas imports, improving supply security and reliability, and providing gas under sensible economic conditions," according to a company statement.

 

Meanwhile, on Tuesday, European natural gas SPOT PRICES jumped to an unprecedented 111.70 euros per megawatt-hour, after last February being at a mere 15.49 euros.

 

The NS2 operator is at the same time seeking to assure that "Nord Stream 2 will contribute to meeting the long-term needs of the European energy market for gas imports, improving supply security and reliability, and providing gas under sensible economic conditions," according to a company statement.

 

PART 2

 

Soaring gas prices in Western Europe due to mistaken reliance on wind and solar systems 

Russia on track for record gas exports in 2021 – Putin

https://www.rt.com/russia/537357-soaring-gas-prices-in-eu/

 

A surge in the cost of gas, which has seen bills shoot up for households and industry, is due to a shortfall in electricity generation, and not because Russia is somehow squeezing supplies, President Vladimir Putin has argued.

 

Speaking as part of a keynote address at Russian Energy Week, on Wednesday, Putin said that a fall in output from wind systems meant electricity prices shot up, having a knock-on effect on demand for gas. Wind power makes up an increasingly large share of Europe's energy generation, particularly in the west of the continent, he went on.

 

“The rise in gas prices in Europe was the result of a shortage of wind electricity, and not vice versa,” the president insisted.

 

Putin went on to accuse Western leaders of “trying to cover up their own mistakes,” following a series of claims that the situation is because Russia is withholding supplies. He added that “proper analysis of the gas supply situation is often ignored, and replaced by empty political slogans.”

 

ALSO ON RT.COMMoscow’s EU envoy advises Brussels to improve relatio...

 

According to the Russian president, an exceptionally long winter drained the continent's energy reserves and disrupted pricing. Now, “the invisible hand of the market” is at play, Putin said.

 

Contrary to Russia seeking to worsen the crisis, Putin insisted that the country could well see record levels of exports in 2021, as Moscow works to meet the growing demand. That said, though, he claimed that the Kremlin doesn't relish the prospect of shortages and that “the high price environment can have negative consequences for everyone, including producers.”

 

ALSO ON RT.COMRussia supplying additional gas to Europe using all a...

 

Some countries have seen gas prices increase by as much as 250% in recent days, with a knock-on effect being felt various industries. Homeowners also face higher heating bills with winter fast approaching.

Several energy companies in the UK, which has seen some of the sharpest gas price increases, and gas supply disruptions, have entered into talks with the government to prevent them from potentially going bust.

 

Last month, Putin's spokesman, Dmitry Peskov, said that the state energy firm, Gazprom, is already fulfilling all of its contracts and no customers have been denied deliveries.

 

According to him, “nobody has any grounds to claim otherwise,” and Gasprom is making preparations to 1) sign new, long-term gas supply deals, and 2) after those deals are concluded, increased gas volumes would begin flowing westwards.

 

PART 3

 

This part provides an introduction to the use and cost of wind, solar and battery systems on electric grids, if wind and solar were to provide 50% of the annual load on to a grid. Even Germany, a self-professed RE-maven, has not achieved that level.

 

EXCERPT from:

 

WIND AND SOLAR TO PROVIDE 50 PERCENT OF FUTURE NEW ENGLAND ELECTRICITY CONSUMPTION

https://www.windtaskforce.org/profiles/blogs/wind-and-solar-provide...

 

Energy systems analysts of Denmark, Ireland, Germany, the UK, the Netherlands, etc., have known for decades, that if you have a significant percentage of wind on your grid, you better have enough OTHER power producing plants to COUNTERACT any lack of wind available at all times, 24/7/365, year after year.

 

RE folks have been advocating:

 

1) Wind plus solar must provide at least 50% of the load of the NE grid by 2050, or sooner.

 

2) Getting rid, as soon as their licenses expire, or sooner, of the remaining near-zero-CO2, NE nuclear plants, that produce electricity at 5 c/kWh, or less

 

3) Banning the use by households and others, of natural gas, coal, oil, propane, etc., to reduce CO2. Burning biomass (mostly trees), etc., is OK, because the combustion CO2 is “renewable”.

 

4) Replacing gasoline vehicles with electric vehicles and heating furnaces with heat pumps. See Part 4

 

PART 4

 

HEAT PUMPS ARE MONEY LOSERS IN MY VERMONT HOUSE, AS THEY ARE IN ALMOST ALL NEW ENGLAND HOUSES

https://www.windtaskforce.org/profiles/blogs/heat-pumps-are-money-l...

 

I installed three heat pumps by Mitsubishi, rated 24,000 Btu/h at 47F, Model MXZ-2C24NAHZ2, each with 2 heads, each with remote control; 2 in the living room, 1 in the kitchen, and 1 in each of 3 bedrooms.

The HPs have DC variable-speed, motor-driven compressors and fans, which improves the efficiency of low-temperature operation.

The HPs last about 15 years. Turnkey capital cost was $24,000

http://www.windtaskforce.org/profiles/blogs/vermont-co2-reduction-o...

 

My Well-Sealed, Well-Insulated House

 

The HPs are used for heating and cooling my 35-y-old, 3,600 sq ft, well-sealed/well-insulated house, except the basement, which has a near-steady temperature throughout the year, because it has 2” of blueboard, R-10, on the outside of the concrete foundation and under the basement slab, which has saved me many thousands of space heating dollars over the 35 years.

 

I do not operate my HPs at 15F or below, because HPs would become increasingly less efficient with decreasing temperatures.

The HP operating cost per hour would become greater than of my efficient propane furnace. See table 3

 

High Electricity Prices

 

Vermont forcing, with subsidies and/or GWSA mandates, the build-outs of expensive RE electricity systems, such as wind, solar, batteries, etc., would be counter-productive, because it would:

 

1) Increase already-high electric rates and

2) Worsen the already-poor economics of HPs (and of EVs)!!

https://www.windtaskforce.org/profiles/blogs/high-costs-of-wind-sol...

 

Energy Cost Reduction is Minimal

 

- HP electricity consumption was from my electric bills

- Vermont electricity prices, including taxes, fees and surcharges, are about 20 c/kWh.

- My HPs provide space heat to 2,300 sq ft, about the same area as an average Vermont house

- Two small propane heaters (electricity not required) provide space heat to my 1,300 sq ft basement

- My average HP coefficient of performance, COP, was 2.64, which required, at 35% displacement of fuel, 2489 kWh; 100% displacement would require 8997 kWh

- The average Vermont house COP was 3.34, which required, at 27.6% displacement, 2085 kWh, per VT-DPS/CADMUS survey.

- I operate my HPs at temperatures of 15F and greater; less $/h than propane

- I operate my traditional propane system at temperatures of 15F and less; less $/h than HP

 

https://afdc.energy.gov/files/u/publication/fuel_comparison_chart.pdf

https://www.nature.com/articles/s41597-019-0199-y

https://acrpc.org/wp-content/uploads/2021/04/HeatPumps-ACRPC-5_20.pdf

 

Before HPs: I used 100 gal for domestic hot water + 250 gal for 2 stoves in basement + 850 gal for Viessmann furnace, for a total propane of 1,200 gal/y

 

After HPs: I used 100 gal for DHW + 250 gal for 2 stoves in basement + 550 gal for Viessmann furnace + 2,489 kWh of electricity.

 

My propane cost reduction for space heating was 850 - 550 = 300 gallon/y, at a cost of 2.339/gal = $702/y

My displaced fuel was 100 x (1 - 550/850) = 35%, which is better than the Vermont average of 27.6%

My purchased electricity cost increase was 2,489 kWh x 20 c/kWh = $498/y

 

My energy cost savings due to the HPs were 702 - 498 = $204/y, on an investment of $24,000!!

 

Amortizing Heat Pumps

 

Amortizing the $24,000 turnkey capital cost at 3.5%/y for 15 years costs about $2,059/y.

This is in addition to the amortizing of my existing propane system. I am losing money.

https://www.myamortizationchart.com

 

Other Annual Costs

 

There likely would be service calls and parts for the HP system, as the years go by.

This is in addition to the annual service calls and parts for my existing propane system. I am losing more money.

 

Minimal Energy Savings of Propane versus HPs

 

Site Energy Basis: RE folks claim there would be a major energy reduction, due to using HPs. They compare the thermal Btus of 300 gallon of propane x 84250 Btu/gal = 25,275,000 Btu vs the electrical Btus of 2489 kWh of electricity x 3412 Btu/kWh = 8,492,469 Btu.

 

However, that comparison would equate thermal Btus with electrical Btus, which all engineers know is an absolute no-no.

 

A-to-Z Energy Basis: A proper comparison would be thermal Btus in propane vs thermal Btus to power plants, i.e., 25,275,000 Btu vs 23,312,490 Btu, i.e., a minor energy reduction. See table 1A

 

Table 1A, Energy Savings
Heat in propane, Btu/y, HHV	25275000
Fuel to power plant, Btu/y		23312490
Fuel to power plant, kWh/y		6833
Conversion efficiency		0.4
Fed to grid, kWh		2733
Transmission loss adjustment, 2.4%		2667
Distribution loss adjustment, 6.7%		2489
Heat in propane, Btu/gal, HHV	84250
Purchased propane, gal/y	300
Purchased electricity, kWh/y		2489
Heat in propane Btu/gal, LHV	84250
Standby, kWh		91
Defrost, kWh		154
To compressor, kWh		2244
COP		2.64
Heat for space heat, kWh		5926
Btu/kWh		3412
Furnace efficiency	0.8
Btu/y for space heat	20220000	20220000

Comparison of CO2 Reduction in my House versus EAN Estimate

 

CO2 Reduction due to HPs is minimal

 

No HPs:

CO2 of propane was 850 gal/y x 12.7 lb CO2/gal, combustion only = 4.897 Mt/y

 

With HPs:

The CO2 reduction is calculated in two ways using the:

 

1) EAN method, based on commercial contracts, aka power purchase agreements, PPAs (market based)

2) ISO-NE method, based on fuels combusted by power plants connected to the NE grid (location based)

See Appendix for details.

 

Market Based: Per state mandates, utilities have PPAs with Owners of low-CO2 power sources, such as wind, solar, nuclear, hydro, biomass, in-state and out-of-state. Utilities crow about being “low-CO2” by signing papers, i.e., without spending a dime.

 

CO2 of propane was 550 gal/y x 12.7 lb CO2/gal, combustion only = 3.168 Mt/y

CO2 of electricity was 2,489 kWh x 33.9 g/kWh = 0.084 Mt/y

Total CO2 = 3.168 + 0.084 = 3.253 Mt/y

CO2 reduction is 4.897 - 3.253 = 1.644 Mt/y, based on the 2018 VT-DPS “paper-based” value of 33.9 g CO2/kWh

 

Location Based: CO2 of power sources connected to the NE grid

 

CO2 of propane was 550 gal/y x 12.7 lb CO2/gal, combustion only = 3.168 Mt/y

CO2 of electricity was 2,489 kWh x 317 g/kWh = 0.789 Mt/y

Total CO2 = 3.168 + 0.789 = 3.897 Mt/y

CO2 reduction is 4.897 - 3.897 = 0.939 Mt/y, based on the 2018 realistic ISO-NE value of 317 g CO2/kWh

 

Cost of CO2 Reduction is (2059/y, amortizing - 204/y, energy cost savings + 200/y, service, parts, labor)/0.939 Mt/y, CO2 reduction = $2,188/Mt, which is outrageously expensive. 

   

https://www.eia.gov/environment/emissions/co2_vol_mass.php

https://afdc.energy.gov/files/u/publication/fuel_comparison_chart.pdf

PART 5

 

Fossil Fuels Supply 84 Percent of World Primary Energy, and Other Eye Openers from BP’s Annual Energy Review

 

Primary energy is energy supplied to users

 

In 2020, per BP Annual Energy Review, primary energy consisted of Coal, 27%; Natural Gas, 24%; Oil, 33%, a total of 84%, plus Nuclear, 4%; Hydro, 6%;

 

Heavily subsidized, new Renewables were 5%, mostly wind and solar, after more than 20 years of subsidies.

 

Some of the primary energy, about 10%, is used for exploration, extraction, processing and transport, including energy for building and maintaining all energy infrastructures, to produce primary energy to users. That 10% of primary energy is often called “upstream energy”.

 

For example, to produce ethanol from corn requires a very significant quantity of primary energy to produce a gallon of ethanol for blending with gasoline; the combustion CO2 of ethanol is not counted, as is the CO2 of burning biomass, because they are “renewable”, per international agreement.

 

https://www.forbes.com/sites/rrapier/2020/06/20/bp-review-new-highs...

http://www.windtaskforce.org/profiles/blogs/is-burning-wood-co-2-ne...