The Spoils of War
In my issue from June, I wrote about how uncritical optimism had made Germany and the EU dependent on imports of Russian gas. Their enthusiasm for Russian gas has for many years drastically reduced the price that Norway can charge for our gas. The policy of Germany and the EU made them incredibly vulnerable to reckless Russian actions and harmed Norway financially.
The shame of Germany and the EU is nowhere to be found when they have the audacity to demand an increased supply of Norwegian gas after Russia cut their supply.
Not only do they demand Norway help them in their self-caused gas crisis, but they also want to put a price cap on gas imports. This, of course, to press the price they must pay downwards.
Germany and the EU are not alone in these demands. The Economist recently published an article about Norway “embarrassingly (profiting) from the war in Europe”. The article tells a story about a country “keen on its image as a force of good in the world” now having to fight charges of war profiteering. The proposal of The Economist is that Norway sells gas below market price, to help Europe in crisis.
Should Norway sell gas below market price to rich countries like Germany? Many European countries have during the last years been imposing completely irresponsible energy policies. Germany has, in addition to the irresponsible dependency on Russia, had a policy of shutting down nuclear power plants in the country.
Their plan is to shut down even more of these power plants in the upcoming year. Just the German power plants that are scheduled to be shut down next year produce more gas than all of Norway’s gas exports in total. It is then difficult to develop any sympathies for Germany.
It is striking how many of the beggars for Norwegian gas were critical to Norway’s oil and gas activities just a few years ago. Norwegian oil and gas have been heavily criticized by European countries, who directly encouraged Norway to stop production. The Economist did, some years ago, encourage investors to not invest in gas projects at all.
I struggle to read these claims and criticism in any other way than European leaders trying to cover up their own stupid mistakes with the gas policies. The Economist writes that “Norway profits on the war”.
They could just as easily have written “Norway profits on European leader’s decision to dismantle their gas production and base their needs upon Russia”.
Of course, Norway should generally be prepared to help other countries when they face difficult times. It seems not at all unlikely that Norway, one way or another, will provide financial support to different countries throughout Europe. The Norwegian government has already taken steps to help Europe. For example, they are now producing gas at max capacity. This is naturally at the expense of the oil output.
Hopefully, the Norwegian negotiators will be able to use this opportunity to implement a more responsible system for gas in Europe. The desire should be free trade, but with an awareness of who the trading counterparty is (and the risk following these counterparties).
The worst outcome would nevertheless be if the European countries in crisis resort to nationalism. European industry will also face a potential collapse due to the high gas prices. If this happens, the cost of the price cap on gas may seem like a small price to pay. So maybe solidarity is the way to go after all, although this includes little Norway making up for silly mistakes by the EU.