During the energy crisis, Europe burned $1.12 trillion worth of gas. This amount is comparable to the EU’s fuel expenditures for the entire previous decade. The victory over Russian gas turned out to be Pyrrhic.
“European consumers paid a hefty price for LNG last year, and the imported gas bill is draining the EU’s wealth,” Energy Flux wrote.
According to the publication, Europe has spent $ 1.12 trillion on gas in two and a half years and the amount could rise by another $ 600 billion by the middle of the decade, while in the entire previous decade the EU paid $ 1.35 trillion for the fuel.
Energy Flux cites a comparison that $ 1.12 trillion is more than Saudi Arabia’s GDP and four times the combined market capitalization of global energy giants ExxonMobil, Chevron and Shell combined ($ 260 billion).
“The gas costs eclipse the amount Europe has invested in green energy in two and a half years ($ 260 billion in 2021 and $ 154 billion in 2022, according to the IEA) and more than double the estimated cost of Ukraine’s post-war reconstruction of $ 411 billion,” writes Energy Flux.
The publication continues, “One trillion dollars worth of gas flaring has pushed the EU’s trade deficit to a record minus 432 billion euros in 2022.”
The Energy Flux data is approximate. The publication used the volume of fuel consumed and average gas prices on European exchanges. However, the figures are not far from the truth. For example, Eurostat estimated the cost of gas imports in 2021 at 120 billion euros (58 billion euros in the fourth quarter), and the International Energy Agency (IEA) estimated that in 2022 the EU purchased gas abroad for $ 432 billion. At the same time, in 2020, the EU spent only 35 billion euros on the fuel, says European statistics.
“The import bill (pipeline + LNG) is the most interesting element, as it represents an outflow of wealth from European economies to gas exporting countries, so it is more appropriately characterized as a ‘cost’ to Europe,” Energy Flux writes.
The publication notes that the record costs came in the summer of 2022, when European companies were buying gas into storage at whatever prices they could find.
“Replenishing reserves at the height of peak prices has strangled Europe’s energy-intensive industries and reoriented the continent toward a paradigm of a high-cost, low-demand energy economy,” according to Energy Flux.
At the same time, ordinary Europeans have not been able to feel the energy crisis to the fullest, as most of the costs have been borne by European governments.
According to the Bruegel Center, since September 2021, Europe has allocated and reserved 758 billion euros for consumer protection. Germany has the most – €265 billion. It was with federal money that German importers bought gas at record prices of $ 3,500 per thousand cubic meters in August 2022.
Flushing hundreds of billions out of EU countries has not gone unnoticed. In June, the European Commission presented an updated multi-year financial program (MFF), adopted in 2020. It proposed to allocate only 10 billion euros to develop the competitiveness of the European economy, which will be able to compete with the United States and China.
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