The Gas Value Chain Company

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Publication

Friedrichskoog, December 2020 | Paper by ‘The Gas Value Chain Company GmbH’: ‘UOKiK NS2 Decision: ‘Alternative Facts’ & ‘Sanctimonious Hypocrisy’- UOKiK should clean up the foreclosed Polish market in front of its own doorsteps instead of acting ‘Headmaster’ for the EU’.

The paper analyzes the decision of the Polish ‘Office of Competition and Consumer Protection’ (‘UOKiK’) of 6 October 2020 imposing exorbitant fines on Gazprom and five Western Companies in conjunction with the Nord Stream 2 project. The market facts on which the decision is based are false without exception. Since it is hard to believe that a competition authority is unaware of the true state of the markets, they are qualified as ‘alternative facts’ brought forward to spread politically motivated ‘fake news’.

The ‘alternative facts’ are presented in ‘sanctimonious hypocrisy’ fashion (“… it is astounding that Western Companies fail to understand…”).

While the description of the European gas markets, meanwhile embedded in a global gas market, is simply wrong, the depiction of the Polish gas market is misleadingly false. Poland continues to obstruct integration of its gas market into the Single European Gas Market by multiple ‘non-physical entry barriers’ including anti-competitive practices such as e.g. ‘predatory pricing’. Instead of assuming the role of ‘headmaster’ for the European Union, the UOKiK would thus be better advised to clean up the foreclosed Polish gas market in front of its own doorsteps.

Perhaps most unsettling is the UOKiK’s claim that NS2 is ‘dividing’ Europe. In reality it is Poland working hard to ‘divide’ Europe: By locking up its market to the Northwest-European transnational market and aspiring to become a ‘pivotal hub’ – at the elevated price level prevailing on the Polish market – for its eastern neighbors, it is preventing its eastern neighbors from becoming part of the (almost completed) ‘European Henry Hub’. What else can be more divisive?

The paper has also been published in ‘Natural Gas World’: (https://www.naturalgasworld.com/uokik-ns2-decision-alternative-facts-and-sanctimonious-hypocrisy-ggp-84051).

Publication

Mülheim, 28 April 2020 | Paper by ‘The Gas Value Chain Company GmbH’: ‘Nord Stream 2 caught between politicization, hypocrisy and ignorance: a few inconvenient truths: Both U.S. sanctions and EU regulations obstruct climate efforts and pose risks to security of supply’.

The paper qualifies the U.S. NS2 sanctions as an unacceptable extra-territorial interference in European energy policy and a camouflaged U.S. LNG sales campaign. Moreover, it regards the amendment of the Third Gas Directive a discriminatory ‘Lex NS2’, by which the EC is using regulation as a political weapon. The politicization spawns hypocrisy and reveals ignorance, as a few inconvenient truths illustrate. E.g. continued transit through Ukraine, albeit also carrying molecules of the very same Russian origin, saw strong political support. Also Russian LNG, supplied to Europe in large quantities, is not taken issue with. Russian crude oil is not sanctioned by the U.S. but instead imported in large quantities. Both the sanctions and the ramifications stemming from the amendment of the Third Gas Directive obstruct European climate efforts and pose risks to security of supply. Read moreModern, state-of-the-art infrastructure, i.e. new pipelines and new, energy efficient compressors, such as NS2 features, contribute significantly to reduce the carbon footprint of fossil gas. Even vs. the best LNG alternative (Qatar), 55 bcm/a carried by NS2 would save ~17.1 million tons of CO2equ per annum and ~11 million tons vs. transit through the Ukraine. The tacit ‘optimism’ that NS2 will be completed and operational with only a minor delay poses an unnecessary risk to security of gas supply. The yardstick should be certainty rather than optimism, achievable by removing the sanctions and alleviating the ramifications stemming from the amendment of the Third Gas Directive.

Publication

Cologne/Mülheim, 23 October 2018 | Joint paper of ‘ewi Energy Research & Scenarios gGmbH’ (‘ewi ER&S’) and ‘The Gas Value Chain Company GmbH’: ‘The underrated long-term relevance of gas in the decarbonizing German energy space’.

GVC is proud to announce the publication of the paper written jointly with its cooperation partner, the renowned ewi ER&S, co-authored by Harald Hecking and Wolfgang Peters. The long-term relevance of gas – for quite a while fossil natural gas and towards deeper decarbonization scenarios increasingly ‘green gas’ – is vastly underrated by many. This is partly due to the considerable complexity of a multitude of studies and reports where the acknowledged relevance of gas can easily be overlooked. Against this backdrop the authors considered it useful to extract the considerations and arguments addressing the long-term relevance of gas in the decarbonizing German energy space in various studies, with strong focus on the ‘dena-Leitstudie’ “Integrierte Energiewende”. The ewi ER&S press release summarizes the main findings.

Gaseous molecules as energy carrier will be pivotal also for extensive electrification scenarios while a wider use of gas – over time turning ‘green’ – achieves Germany’s decarbonization targets less drastically and less costly in more technology-open scenarios. The paper is also available for download at https://www.ewi.research-scenarios.de/cms/wp-content/uploads/2018/10/ewi_ERS_GVC_Gas_in_the_decarbonizing_German_energy_space_Paper.pdf.

Interview

London/Mülheim 15 October 2018

Wolfgang was interviewed by Joseph McDonnell, an energy expert from ICIS, for an article titled ‘Over the hedge?’ published in ICIS Gas In Focus, the leading gas industry report with an established audience of executives, analysts and traders since 1994.

The article discusses plans to build an LNG terminal in Germany. Wolfgang pointed out that a large scale project (e.g. Wilhelmshafen) would likely be uneconomical, since ample Norwegian and Russian pipeline supplies made LNG deliveries pricewise unattractive at present. However, a business case hinging mostly on small scale LNG in Brunsbüttel, a ‘hot spot’ since located at the entry of the Kiel canal and at the same time at the mouth of the river Elbe towards Hamburg port might be economically feasible.

Interview

Moscow/Mülheim, 11 October 2018

Wolfgang was interviewed by ‘Russia 24’ via skype about aspirations of U.S. politicians to i.a. potentially hinder Russian gas supplies to Europe. Namely, members of the U.S. Senate Foreign Relations Subcommittee on Europe and Regional Security Cooperation had introduced the so-called ‘European Energy Security and Diversification Act’ “to provide new tools for the United States to combat malign Russian influence and create economic opportunities at home and abroad”. As always, as a matter of policy, GVC restricted itself to gas economical facts, the main point being that U.S. based commercial operators might be very unhappy about such initiative since they could presently make more money with LNG exports to Asia. Wolfgang couldn’t help adding that a U.S. law on internal European affairs might not be well received by European politicians.

The link to the full trailer in the Russian language is:
https://www.vestifinance.ru/videos/43121

Publication

Leipzig/Mülheim, 24 September 2018 | Article: ’Erdgas – verkannter Klimaretter zwischen Ideologie und Geopolitik’, in ‚Newsletter Handelsblatt Tagung Gas 2018‘

Wolfgang contributed an article to the Newsletter issued on occasion of the Handelsblatt Tagung Gas 2018 in Leipzig. Wolfgang recalled that Germany had not achieved its national CO2 reduction targets Read more while an effective carbon floor price changing the merit order in favor of gas would have brought this about. The reluctance to embrace the power-to-gas technology avoiding billions of compensation for curtailment of renewable ‘overproduction’ was essentially driven by ideology, since admitting that wind and solar were not demand responsive. Geopolitically motivated objections e.g. against Nordstream 2 and Russian gas at large were misplaced since the LNG revolution had made the so-called ‘Putin phobia’ obsolete.

Interview

Barcelona/Mülheim, 17 September 2018

Wolfgang was quoted in an article by ‘Kallanish Energy’ titled EUROPEAN’S GAS INDUSTRY’S FUTURE PITS U.S. VS. RUSSIA’.

The article was published by ‘Kallanish Energy’ on occasion of the ‘GasTech Exhibition & Conference 2018’ (https://www.gastechevent.com/) in Barcelona on the emerging global gas market propelled by LNG and the potential rivalry between Russian pipeline gas and U.S. LNG. Further, on the relevance of the recent ‘deal’ between President Trump and President Juncker. Wolfgang indicated i.a. that Europe was ‘open for business’ Read more with 210 bcm/a of regasification capacity 75% idle but that he did not blame U.S. companies one bit for going to Asia fetching higher prices. As to the ‘presidential deal’, he recalled that neither did Mr. Trump have state-owned sales facilities for LNG (or soybeans) nor did Mr. Juncker have state-owned facilities for respective purchases.