I think you have or have had to deal with it gradually. The expiration of your energy contract and automatic renewal to a contract with variable rates for natural gas and electricity.

Our natural gas price at home went up 30% the first month and the second month it was announced that rates will be raised again in October. By how much is not yet known. At Schiphol Airport you stand in line for 4 hours before you hear that your flight has been cancelled. Inflation is at an all-time high...

What on earth has happened in 2-3 years?

It must be a combination of factors that reinforce each other. It started with the Corona era. Apparently people started thinking differently about how they want to organize their lives and the work/life balance shifted. And with respect to energy prices, the war in Ukraine is, of course, taking a toll on everything now.

As in the previous blog, I read some overdue The Engineersagain over the vacations. In a January 2020 copy there is an article that decommissioning of the field has started, with the sentence at the bottom: "...as it looks afterwards, gas production could stop in the summer of 2022." Well, no, and fortunately so. Because what if a harsh winter comes later?

High-level chess

We know that the best chess players in the world come from Russia (Kasparov, Karpov). Putin is using energy, especially gas to Europe, as a strategic weapon. And we know he is a strategist. I read an article yesterday that it is hard to imagine what he is up to and may well come out unexpectedly.

(Disclaimer: It's my Jip and Janneke interpretation of this complicated phenomenon, but I think it boils down to this)

The European Union has required gas traders to bring stocks to at least 80%. But gas storage is in commercial hands. Obliging companies is not so easy. Traders refused because of the high financial risks.

"GasTerra believes that filling a gas storage facility with 1 billion cubic meters at current prices 'is a financing issue of 2 billion.'" Source: NOS, 11-03-2022

The risk is that the high gas prices of today can never be recovered if prices fall. The government has guaranteed to cover this risk.

Putin has threatened to completely shut down Nordstream 1 which will send prices through the roof. So everybody thinks he's going to do that. But what if he is a contrarian and is going to do the opposite, i.e. open all the taps wide?

This will cause a collapse of prices in the international liberalized gas market. As a result, governments' guarantees will suddenly have to be monetized and EU economies will be hit even harder than they are already. To stay in money terms: ee will be paid back in equal coin, so to speak.

Groningen, the saving angel?

Thus, the Groningen gas field has not yet been dismantled and there is still a best supply in it of 470 billion cubic meters.

"Former provincial executive William Moorlag (PvdA) said he is getting 'very cynical' about Groningen's future for the next few years. "I worry a lot about the future," he said. "When the gas price was at 300 euros per megawatt hour, the day value of what is still in the ground today was more than 1,000 billion. At some point, hungry eyes are going to look at that. Then you can say: gas production is over. But that's what we thought with nuclear power after Chernobyl." The Telegraph, 14-09-2022

Compensating Groningers for the damage to their homes caused by gas extraction is beyond dispute. I think the same goes for every right-thinking Dutchman. And I don't mean the €5000 p.p. that is being promised now (believe me: I have just finished renovating my house and with €5000,- you can just buy a new front door, so to speak). No, with the billions still in the ground and now sloshing in through high tax revenues, ample compensation must be provided. For example with a graduated scale: within a 10 km radius of the area €250,000 p.p., within a 25 km radius €150,000 etc. I haven't done the math, but that is most likely nowhere near the cost we as a society are paying now.

What about Russian oil?

Apparently, the number of ship-to-ship shipments on the open sea (i.e., not land-to-ship) involving Russian oil has increased from 1 in 2021 to 41 since the beginning of the Russian invasion of Ukraine. Experts expect this to increase further when the boycott on Russian oil goes into effect on 05-12.

Precarious situation

So the short-term situation in the energy market is extremely uncertain and worrisome, and those who think Putin is on the losing side may need to revise their opinion.
The government is now looking at how it can come to the rescue, possibly by offering thrifty consumers an energy price ceiling and above that the current extortionate prices. This is expected to motivate more frugal consumers. And of course accelerating the shift to non-fossil energy sources, energy efficiency optimization and geo-political independence.