CGTN Europe interviewed Christof Ruehl, Senior Research Scholar at Columbia University's Center on Global Energy Policy
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00:00The price of natural gas has hit a 52-week high on fears of a cold January in the United States.
00:06The natural gas futures price has risen by almost a fifth to over $4,200 per 1,000 cubic feet.
00:13Meteorologists are predicting substantial snow and ice along much of the East Coast in coming weeks.
00:19The futures natural gas price is already up more than 50% in 2024.
00:24It's now trading at its highest level in a year, while oil prices have also seen significant gains.
00:30Let's talk now to Christoph Ruhl, who's Senior Research Scholar at the Center for Global Energy Policy at New York's Columbia University.
00:36Good to see you again, Christoph.
00:38Cold weather on the way for the States, likely in Europe, too.
00:42This deal allowing Russian gas through Ukraine to Europe is set to expire.
00:48Given this cold weather on the way, which countries will be most affected by this, and what will it mean for them?
00:54Well, it's a bit of a historic occasion.
00:57This is the last gas. I shouldn't say the last gas.
01:00Nobody should say that from Russia to Europe.
01:02It's the last pipeline gas from Russia to Europe because Russia also produces liquefied natural gas,
01:07which enters global markets and through the back door finds its way through Europe.
01:11But it's historic because it's the last drop of pipeline gas, bubble of pipeline gas.
01:17On the other hand, it's not so dramatic because Europe used to get about 35% of its imports from Russian pipelines,
01:24and now this is already down to 8%.
01:26But just to put it in perspective in numbers without even caring about the units, it used to be 65 BCM.
01:33Now it's about 14 BCM.
01:35Most affected by that outage would be Slovakia and then Austria.
01:41We have heard that the Austrians cancelled it themselves.
01:44Indirectly affected would be Czech Republic because they would sort of jump in and provide some of their gas for Slovakia.
01:52Also affected, hardly mentioned, is Moldova because there's a breakaway republic part of Moldova
01:58which gets about 2 BCM of gas from Russia, and they haven't built it and paid their bills forever.
02:03So in that case, it is gas from switching it out, switching it off.
02:07So you have some small countries affected, and you have general agreement, I should say,
02:11that there will be no outage just because of the disruption.
02:14In the background, you have price increases, which I really think should be blamed on the weather
02:19rather than on this expiring contract.
02:22Is this, though, going to put further pressure on those prices?
02:25As you say, already boosted by cold weather forecasts.
02:28Are we going to see those prices go up more?
02:32Every little counts, so it will certainly play a role, but not a big one, not a dramatic one.
02:37The sums are too small, the preparation times are too long, the inventories are too full,
02:43so everybody really in the gas business looks at the thermometer.
02:47If we are running into trouble because of cold weather,
02:50because of storage going down faster than expected,
02:53then, of course, this political discussion will start again,
02:56should one or should one not have listened to Slovakia and listened to the Ukraine or not.
03:00But that's a very remote scenario at the moment.
03:04Again, de facto, it would be weather-driven, not a supply disruption, as we had seen in 2022.
03:10What does it mean for Russia?
03:12Does it mean they're going to be stuck now with a load of gas that they can't actually transport out of the country?
03:19For Russia, strategically, it's certainly bad news
03:21because it means that the last gas bubble or so to European pipelines has passed.
03:26It will be much more difficult to re-establish that system once it has been interrupted
03:30and once European countries have found alternative suppliers.
03:33So even though the volumes were small,
03:36it is certainly the case, I would think, that in Russia, in Gazprom and in the transit pipeline system,
03:41people look back now on an epoch which is likely to be over for good.
03:46And that's a problem because Russian gas production is highly concentrated in the western part of Siberia,
03:52and there is, as of now, only pipelines to Europe, to the west.
03:56There's nothing, there's no pipeline to the east, to China.
03:59So that means a large chunk of Russian gas in western Siberia is now stranded,
04:03cannot be produced because it cannot be transported.
04:06And that is an economic problem.
04:08Christoph, good to talk to you as always.
04:10Thank you for joining us on the programme.
04:11That's Christoph Ruhl from Columbia University.