EU nations fail to close rift on gas prices as cold sets in
From left, Greek Energy Minister Kostas Skrekas and Czech Energy Minister Jozef Sikela speak with Polish Minister of Climate and Environment Anna Moskwa prior to a meeting of EU energy ministers at an extraordinary energy council in Brussels, Thursday, November 24, 2022. (AP Photo/Olivier Matthys)

BRUSSELS (AP) — On winter’s doorstep, European Union (EU) nations again failed to bridge bitter disagreements over a natural gas price cap Thursday as they struggled to effectively shield 450 million citizens from massive increases in their utility bills.

An emergency meeting of energy ministers only showed how the energy crisis tied to Russia’s war in Ukraine has divided the 27-nation bloc into almost irreconcilable blocs.

“The discussion was quite heated, and you all know that there are very divergent views,” said Czech Industry Minister Jozef Síkela, who chaired the meeting where ministers could not agree on when and how a price cap on gas purchases should kick in.

A massive August spike in natural gas prices stunned all but the wealthiest in Europe, forcing the bloc to look for a cap to contain volatile prices that are fueling inflation.

But the EU is deadlocked between nations demanding cheaper gas to ease household bills — including Greece, Spain, Belgium, France and Poland — and those like Germany and the Netherlands insisting supplies are at risk if a cap stops EU countries from buying gas above a certain price.

A solution was nowhere near the horizon — to the frustration of many.

“It’s already minus 10 (Celsius) in Poland,” said the nation’s energy minister, Anna Moskwa. “It’s winter now.”

The inability to find a compromise on the price cap also held up plans for joint gas purchases and a solidarity mechanism to help the neediest member states because the measures would be agreed on as a package.

Another emergency energy meeting was set for December 13.

“The differences are really still major,” said Dutch Energy Minister Rob Jetten. “It means there is an awful amount of work ahead over the next two weeks.”

Natural gas and electricity prices have soared as Moscow slashed gas supplies to Europe used for heating, electricity and industrial processes. European officials have accused Russia of energy warfare to punish EU countries for supporting Ukraine.

So finding a deal is not only about providing warmth to citizens but also about showing a united front to Russian President Vladimir Putin.

Talks have dragged on for months, and even if a summit of EU leaders proclaimed some sort of breakthrough last month, nothing has been visible on the ground. Nations had been waiting for a proposal from the European Commission, the EU’s executive arm, to set a threshold for a price cap, and when it came Tuesday, there was dismay and accusations it could never work.

The commission set a threshold for a “safety price ceiling” to kick in if prices exceed 275 euros per megawatt hour for two weeks and if they are 58 euros higher than the price for liquefied natural gas on world markets.

In political language, it means that such a system might not even have averted hikes as high as in August.

“Setting a ceiling at 275 euros is not actually a ceiling,” said Greek Energy Minister Konstantinos Skrekas, who called for a cap that could go as low as 150 euros.

“We are losing valuable time without results,” he added.

In comparison, the price stood at 123 euros per megawatt-hour on Europe’s TTF benchmark Thursday. Because prices have fallen since the summertime peaks, diplomats have said the urgency has abated somewhat, even though it could pick up quickly again if the weather is colder than normal and supplies get tight.

“We want to be well-prepared for next year, too, and that requires a forceful joint approach; and fortunately, we have a few weeks left to get a deal on this,” Jetten said.

Some 15 nations are united around the view a lower cap should be set, but Germany and the Netherlands lead another group wanting to ensure that gas supply ships would not bypass Europe because they could get better prices elsewhere.

“Security of supply is paramount. Europe still has to be an attractive gas market,” Estonian Economy Minister Riina Sikkut said.

As a result of trade disruptions tied to Russia’s war in Ukraine, EU nations have reduced the overall share of Russian natural gas imports to the EU from 40 per cent before the invasion to around seven per cent And gas storage is as good as full, far exceeding targets.

The EU has relied on increased imports of liquefied natural gas, or LNG, including from the United States, to help address the fall in Russian supplies.

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