Lowering natural gas prices, reducing consumption, and ensuring supply security - ERDAL TANAS KARAGÖL

Lowering natural gas prices, reducing consumption, and ensuring supply security

The energy crisis gripping Europe necessitates the implementation of new targets and plans for energy. Reducing the recently increasing natural gas prices, reducing consumption, and ensuring the security of supply, especially natural gas, come to the fore as the main targets.


THREE CHALLENGING GOALS: REDUCING THE PRICE OF NATURAL GAS, REDUCING CONSUMPTION AND ENSURING SECURITY OF SUPPLY

It is essential to prevent price hikes due to the negative impact of rising natural gas prices on household budgets, its role in increasing inflation, and the resulting increase in electricity prices in numerous countries that rely on natural gas to produce electricity. However, it is a fact that even European countries cannot agree among themselves about controlling prices.


Among European states, several countries such as France, Italy, and Spain, which will not suffer a supply problem in natural gas or have alternatives to ensure security, support the cap price application on natural gas.


On the other hand, Germany opposes this idea, fearing that gas supply security will become even more elusive.


Meanwhile, energy consumption is reduced in many sectors due to rising energy prices being high costs for production. Reducing energy consumption is necessary for energy supply security, but it is a fact that reducing energy consumption negatively affects economic growth due to the strong correlation between energy consumption and economic growth.


Moreover, it is clear that central banks' interest rate hikes due to inflation caused by excessive price increases in energy caused a slowdown in economies and even a contraction at times.


Most importantly, I think, ensuring supply security in energy, especially natural gas, is one of the key targets. The pickle Europe finds itself in the all-important problem of from which country and how much natural gas will be supplied. It remains uncertain whether the natural gas coming to Europe through the existing stored natural gas, LNG and pipelines will meet EU countries' needs.


NATURAL GAS SUPPLY SECURITY IS NOT ENSURED


Preventing price hikes or setting a cap without ensuring supply security, especially in natural gas, is the biggest threat facing energy supply security.

Since the priority in Europe is to ensure the supply of natural gas, it is not very constructive to cap the price of natural gas that will not come to Europe or to prevent price hikes.

For this reason, countries such as Germany, which is dependent on Russia for natural gas, and the Netherlands and Denmark, which are dependent countries, are of the opinion that capping the price of natural gas in this period when supply security is under threat will put energy supply security at risk. It is clear that imposing a cap on natural gas prices will make it more difficult to supply natural gas, especially in winter.

These goals are difficult and must be met. With the winter months fast approaching and the uncertainty of energy supply looming large, it will not be easy to reach these targets in the short term.

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