The economist linked the depletion of Europe's gas reserves to inflation and industrial withdrawal

The depletion of gas reserves in European storage facilities will provoke inflation and the outflow of industrial enterprises from the territory of the European Union (EU). Vladimir Skalkin, Candidate of Economics, Associate Professor of the Department of Economic Theory at the Faculty of International Economic Relations at the Financial University under the Government of the Russian Federation, told Izvestia on February 18.

He recalled that gas reserves in many European countries are practically at zero. The expert stressed that this situation was a consequence of European policy towards Russia, a key fuel supplier.

"Gas reserves will be needed not only for heating, they will be needed for industry. This will lead to higher prices, an inflationary jump, and a further shift of industry from Europe to other territories," Skalkin concluded.

In turn, Alexander Safonov, Doctor of Economics, Professor at the Financial University under the Government of the Russian Federation, noted that natural factors were primarily the reason for the accelerated gas consumption in Europe during the current heating season.

"The first factor is the change in weather conditions, which require gas consumption to a greater extent. <...> The same weather has also affected the reduction in supplies due to alternative energy, such as solar panels and wind turbines. The hope that one would fully compensate for the other did not work," the economist explained.

He added that the transition to liquefied natural gas (LNG) has made fuel expensive, and increased purchases will cost the EU too much. For this reason, the European Union tends to limit itself to the minimum that is included in the forecast calculations.

"Savings on expensive gas and miscalculations about the weather led to the fact that a large volume of gas could not be pumped to form stable reserves. <...> If at some point the EU wants to purchase more gas to pump or cover unexpected gas overruns in the gas storage facility, this will lead to higher prices on the market and they will lose out in this sense," Safonov summed up.

So much for gas: Europe increases purchases of Russian LNG

Supplies via Turkish pipelines have already exceeded their design capacity.

On the same day, it was reported that the EU countries had used up the entire volume of gas pumped into underground storage facilities in the summer and had begun using reserves from previous years. It was clarified that the net difference between the volume of extraction and injection (net extraction) from underground gas storage facilities (UGS) since the beginning of the heating season in Europe has exceeded 55 billion cubic meters, which corresponds to 100% of the volumes pumped in the summer.

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