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Europe Considers Price Caps on Russian Gas

The European Commission proposed a “broad cap on the price of Russian gas” yesterday, according to The New York Times (subscription). EU energy ministers will convene on Friday to discuss the move and other measures.

The background: “Russia has turned the gas tap on and off to punish European countries, primarily Germany, for supporting Ukraine, blaming the widespread disruptions on technical problems and maintenance.”

  • Last week, Russia shut off the Nord Stream 1 pipeline, the biggest pipeline supplying Europe, blaming a problem with its turbines.

What they’re saying: European Commission President Ursula von der Leyen accused Russia of “manipulating” European energy markets but noted that Europe’s “natural gas storage facilities were already 82 percent full and that Russian gas imports had dwindled from 40 percent of the bloc’s total to a mere 9 percent,” according to the Times.

  • “Thirteen of the European Union’s 27 members are facing partial or total Russian gas shutdowns, with the biggest effect being felt in Germany, the bloc’s biggest economy and the most reliant by far on Russian gas.”

Putin’s response: Putin responded by claiming he would stop all energy flows if price caps were imposed.

  • “Will there be any political decisions that contradict the contracts? Yes, we just won’t fulfil them. We will not supply anything at all if it contradicts our interests,” Putin said, according to Reuters. “We will not supply gas, oil, coal, heating oil—we will not supply anything,” he continued.

What the EU is doing: The European Commission has also proposed a number of other measures, including caps on electricity use, EU-wide gas price setting and allocation and a new tax on renewable and coal electricity profits, according to  POLITICO.

The NAM’s view: “Manufacturers have always understood the critical importance of the energy security, affordability and reliability that America enjoys when we can increase domestic energy development,” said NAM Vice President of Energy and Resources Policy Rachel Jones.

  • “We’ve got two key messages. To domestic policymakers: Increase domestic energy production to avoid the fate of the EU and to support our allies. And to the bully Putin: Manufacturers won’t back down.”
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