WINTER IS COMING: Europe on pace for very high heating bills this winter, could mean a longer recession for the U.S.

Remember when Europe deferred to this teenager to set its energy policy? Good times, good times. . .

Climate strike week 205. #FridaysForFuture #ClimateStrike pic.twitter.com/RDmF4WnJnp

— Greta Thunberg (@GretaThunberg) July 22, 2022

Meanwhile, Germany — for some reason — is not firing up its clean-burning nuclear power plants and is instead going with coal:

Germany Firing Up 21 Coal Plants As Putin Tightens The Natural Gas Noose https://t.co/zS8EmHEVb6

— Climate Dispatch (@ccdeditor) August 2, 2022

Hardest hit:

via GIPHY

Anyway, that’s not the worst of it. It looks like it’s too late for Germany and Europe to avoid very, very high utility bills this winter:

European natural gas prices advance as traders seek clarity on supplies from Russia and the pace of demand destruction in the region https://t.co/S0lIvt52il

— Bloomberg Energy (@BloombergNRG) August 2, 2022

This sounds . . . bad:

Households across Britain have been warned they could face an annual energy bill in excess of £3,600 this winter https://t.co/gWrbHxTn1k

— Bloomberg Energy (@BloombergNRG) August 2, 2022

Yet it’s an energy crisis we’re barely talking about in America:

European 1-year forward baseload electricity contracts close the day with fresh settlement record highs:

🇩🇪Germany: €384 per MWh
🇫🇷France: €508 per MWh#EnergyCrisis #EnergyTwitter

— Javier Blas (@JavierBlas) August 1, 2022

None of this is good:

BREAKING: Germany 1-year forward baseload electricity surges >€400 per MWh for the first time ever.

We are truly into crunching territory for the country's energy-intensive manufacturing industry.

The current price is ~1,000% higher than the €41.1 per MWh 2010-2020 average.

— Javier Blas (@JavierBlas) August 2, 2022

German retail consumers to start feeling the pain that has been evident in wholesale markets for a long time:

Take for example RheinEnergie, the utility that serves Cologne, raising gas prices by ~130% from Oct 1 (from 7.87 cents to 18.30 cents per KWh) https://t.co/eDbHuQHO1D

— Javier Blas (@JavierBlas) August 2, 2022

Oh, and our *allies* continue to support the Russian war machine. Freezing temps will do that to you:

European imports of Russian diesel jump, highlighting challenge to EU plans for ban https://t.co/Rd0uEWGq7z

— FT Energy (@ftenergy) August 2, 2022

One other concern is that the oil left in the U.S. SPR is just not that useful:

For background, read this @opinion column from June on the SPR and the sour/sweet crude split: not all of the crude set aside is equal, and what’s left is, increasingly, far less useful than what’s already gone | #OOTT https://t.co/KXtdfl5oDv

— Javier Blas (@JavierBlas) August 1, 2022

Bonus stat: We’re now selling oil leftover from the 70s that we bought from Iran:

And a bit of trivia: some of the sour crude the US is releasing from the SPR comes from (wait for it) Iran — a left over of the late 1970s when the reserve was built.

For example, ~20% of the sour oil inside the Bayou Choctaw (one of the SPR sites tapped) is Iranian Light pic.twitter.com/BO8l4OW7pg

— Javier Blas (@JavierBlas) August 1, 2022

And what does all this mean? More recession for us at home, that’s what:

The US economy may need to undergo a deeper and longer recession than investors currently anticipate before inflation can be brought under control, according to Zoltan Pozsar of Credit Suisse https://t.co/l3TLGL9Okf

— Bloomberg Energy (@BloombergNRG) August 2, 2022

***