Russian Prime Minister Vladimir Putin back in 2011.
FABRICE COFFRINI | AFP | Getty Images
LONDON – After Russia rode to Europe’s rescue and offered to increase gas supplies to the region amid soaring prices, experts said one thing had become abundantly clear: Europe is now largely at Russia’s mercy when it comes to energy, just as the U.S. had warned.
Natural gas contracts hit new highs in Europe this week — and regional benchmark prices are up almost 500% so far this year — with heightened demand and a squeeze in supply putting pressure on the energy sector as the weather turns colder.
Prices seesawed on Wednesday, hitting new highs before retreating after Russian President Vladimir Putin stepped in, offering an increase in Russia’s gas supplies to Europe.
Market analysts said the move showed that Europe was increasingly vulnerable to Russia, which is waiting for Germany to certify the controversial Nord Stream 2 gas pipeline project which will bring more Russian gas to Europe via the Baltic Sea.
The $11 billion pipeline has now been completed much to the annoyance of the U.S. which has long-opposed the project, warning for years during its construction that it compromises Europe’s energy security and that Russia could seek to use energy supplies as leverage over the region.
“Europe has now left itself hostage to Russia over energy supplies,” said Timothy Ash, emerging markets senior sovereign strategist at Bluebay Asset Management, in a research note Wednesday, calling the situation “unbelievable.”
“[It’s] crystal clear that Russia has Europe (the EU and U.K.) in an energy headlock, and Europe (and the U.K.) are too weak to call it out and do anything about it,” he said, calling it a form of “energy blackmail.”
“Europe is cowering as it fears [that] as it heads into winter Russia will further turn the screws (of energy pipelines off) and allow it to freeze until it gets its way and NS2 is certified.”
Many experts believe that Russia has withheld gas supplies to Europe on purpose, in a bid to speed up Germany’s certification of the Nord Stream 2 pipeline. Russia has refuted this, however, with Putin’s spokesman Dmitry Peskov denying on Wednesday that Russia has had any role in Europe’s energy crisis.
Nonetheless, Russia’s Deputy Prime Minister Alexander Novak noted on Wednesday that the expected German certification of the controversial pipeline could help cool prices.
Specialists pose for a picture after welding the last pipe of the Nord Stream 2 gas subsea pipeline onboard the laybarge Fortuna in German waters in the Baltic Sea, September 6, 2021.
Axel Schmidt | Nord Stream 2 | via Reuters
Seeking a speedy certification for Nord Stream 2, Ash believed, had been “Moscow’s game plan all along” adding that “markets are really naive if they think Moscow will do anything to ease the European gas crisis anytime before NS2 is certified.”
Germany’s energy regulator shows no sign of certifying the pipeline just yet, saying on Tuesday that the pipeline must show it would not break competition rules by limiting which suppliers used it, according to Reuters, and fines could be dealt out if it started pumping Russian gas to Germany without securing necessary approvals.
Mike Fulwood, senior research fellow at the Oxford Institute for Energy Studies, agreed that any decision to supply more gas to Europe by Russia was “political” and tied to the certification of the pipeline.
“Basically, [the situation for Russia is] if you approve Nord Stream 2, we’ll get some gas to send down Nord Stream 2 to show we were true to our word,” he told CNBC Thursday.
Bilal Hafeez, CEO and head of research at Macro Hive, told CNBC’s “Street Signs” on Thursday that he also believed Russia was using the situation to its advantage.
“I do think Russia has used this energy crisis to take advantage of the situation here and to try to force an acceleration in the use of the pipeline and in some ways there’s some evidence to suggest they might have held back supply through pipelines through Ukraine, in order for Germany and the EU to accelerate the use of the Nord Stream 2 pipeline.”
EU wary
Soaring prices have placed the issue at the top of the EU agenda with leaders calling for more energy independence — given nearly 90% of the bloc’s supplies are imported, with Russia one of the primary sources of imports along with Norway, according to European Commission data.
The pipeline has critics in Europe, with Ukraine hurt and angry at the pipeline deal with Russia, as it means its own pipelines are bypassed and it will lose valuable gas transit fees as a result. Poland too, feeling vulnerable from a more assertive neighbor Russia, says the pipeline only serves to strengthen Russia.
In July, they issued a joint statement in which they slammed the pipeline, saying “the decision to build Nord Stream 2 made in 2015 mere months after Russia’s invasion and illegal annexation of Ukrainian territory, created security, credibility and political crisis in Europe.”
Europe’s gas supply has long been a thorny subject. It has often soured relations between the U.S. and EU, with the former chastising Germany (the EU’s largest importer of Russian gas, even before the NS2 pipeline) for signing up to the gas project with Russia.
Experts see the battle over Europe’s gas supply as something of a proxy war between the U.S. and Russia, with both vying to gain market share in the region with their supply of natural gas (Russia) and liquefied natural gas (the U.S.)
Experts agree that Europe needs to diversify its sources of energy away from Russia.
“The more Europe diversifies its supply the less risk there is,” Fulwood said, adding that there were attempts to source an increasing amount of LNG from the U.S. “We’ve seen in the last few years a big increase in liquefied natural gas imports in Europe, notably from the U.S. market,” he noted.
Commenting on the wider gas market and supply constraints affecting other gas producers around the world, Fulwood described the situation that gas markets were experiencing as “a perfect storm of demand recovery from Covid and a tight supply situation.”
“There’s been a temporary lack of supply and some of those logistics will start to ease but it won’t be ’til next year so for the next few months we’re really at the mercy of the weather,” he said.
Hyundai Motors is recalling 145,235 EVs and other “electrified” vehicles in the US, citing concerns about a loss of driving power, the National Highway Traffic Safety Administration (NHTSA) said on Friday.
The NHTSA announced this morning that the recall affects selected IONIQ 5 and IONIQ 6 EVs, as well as certain luxury Genesis models, including the GV60, GV70, and G80 electrified variants, from the 2022-2025 model years, Reuters reported.
It looks like the issue stems from “the integrated charging control units in these vehicles, which may become damaged and fail to charge the 12-volt battery. This malfunction could lead to a complete loss of drive power, posing safety risks for drivers,” the NHTSA stated.
If you’re an owner of one of these Hyundai models dating 2022-2025, stay tuned. Hyundai has not yet provided a timeline as to when affected vehicles will be repaired.
To make that happen, the company’s dealers will inspect and replace the charging unit and its fuse if necessary, NHTSA said. Free of charge, of course.
Importantly, no crashes, injuries, fatalities, or fires due to this issue have been reported in the US, Hyundai reported.
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Tesla announced that ‘Actually Smart Summon,’ its autonomous driving feature that enables moving its vehicles without anyone inside over short distances, is now being launched in Europe and the Middle East.
The automaker’s Full Self-Driving suite of features has been limited in those markets due to regulations and Tesla’s focus on making them work in North America first.
Actually Smart Summon is the vision-only version of Tesla’s “smart summon” feature, which was released years ago on Tesla vehicles with ultrasonic sensors.
When Tesla transitioned away from ultrasonic sensors, Smart Summon was one of the missing features that Tesla had yet to adapt to the vision-only (cameras and neural nets) system.
However, that’s only in North America where Tesla focuses its Full Self-Driving (FSD) development, the feature package that includes Actually Smart Summon, also referred to as ‘ASS’.
Most of Tesla’s other markets, including Europe, don’t have the same capabilities under the Full Self-Driving package. That’s partly due to regulations, but Tesla also focuses on making the features work on North American roads first.
Now, Tesla has announced that its Actually Smart Summon feature is launching in Europe and the Middle East:
The feature can only be used on private roads, like parking lots and driveways. Most people have used it to bring their vehicles parked in a large parking lot to them as they exit a store or restaurant. However, the vehicle moves quite slowly under the feature and the owner needs to keep an eye on it at all time and be ready to cancel the summon as Tesla doesn’t take any responsibility for accidents caused by using Actually Smart Summon., like all other FSD features.
Therefore, most people I know who have the feature, myself included, tried once or try to see or impress some friends who have never seen a car move without anyone inside and then stopped using it.
The feature’s main useful use-case is for people with extremely tight parking spots. It enables them to exit the vehicle before it is in its final parking spot and then move the car in and out remotely.
However, that has been the case for years with the regular Smart Summon, as you generally don’t need the vehicle to handle complex parking lots. You mostly need it to move a few feet forward or backward.
US Automakers are planning to ask Mr. Trump to retain President Biden’s EPA exhaust rules, in the face of signs that Mr. Trump might try to reverse them. If the rules are reversed, it would cost Americans hundreds of billions of dollars and thousands of deaths per year.
Interestingly, this is the opposite of what big auto did the last time a reality TV show came to the White House – signaling that they have perhaps learned their lesson this time ’round.
First, some history.
In the middle of the 20th century, the effects of human activity on the atmosphere became readily apparent. Certain cities – with Los Angeles among the forefront – were choked by smog, and it was soon found out that vehicle pollution was the primary reason for this smog.
Since Los Angeles was one of the most smog-choked cities, California led the way on clean air regulation, creating the California Air Resources Board in 1967 (under then-Governor Ronald Reagan).
The federal government gave California special dispensation to set stricter regulations than the rest of the country, in recognition that it had a unique smog problem in its primary metropolis. California has retained this dispensation, in the form of a “waiver,” since then. And other states can follow California’s rules, but only if they copy all of the rules exactly.
Thus, there have been two separate sets of clean air regulation in this country since then – the federal rules, and then the “CARB states” which follow California’s rules.
In 2012 that finally changed, when President Obama’s EPA negotiated with California to finally harmonize these standards and also implement higher fuel efficiency nationwide. This would have been a huge boon for both industry and consumers, saving money and giving regulatory certainty to the auto industry.
But then, in 2016, the candidate who got the 2nd most votes in the presidential election was headed for the White House. And automakers responded by immediately lobbying to torpedo these standards, even before inauguration.
Now, you might think that asking a profoundly ignorant individual, who ended up staffing the EPA with bought-and-sold science deniers (huh, that would never happen again would it?), to change rules which had already been set through years of negotiation and lobbying was not a great idea. And you’d be right.
Not long after automakers had the dumb idea to ask an idiot to fix something that wasn’t broken, that idiot went and broke things further, fracturing the agreement between California and the federal government and ensuring less regulatory certainty for automakers.
But it was too late, and we are now back in the era of disparate regulatory regimes – something which John Bozzella, head of the Alliance for Automotive Innovation (formerly called Global Automakers), keeps complaining about these days, despite having lobbied for exactly this in the first place.
The US EPA and California are still not fully harmonized, but both released recent new standards which do have somewhat similar targets. If a manufacturer builds towards one set of rules, they’ll probably not be too far off from meeting the other.
So in the end, we did get better emissions regulations and California has continued to push forward with clean air regulations, thus signaling a failure on the part of Mr. Trump to cause the long term harm to Americans that he and his oil industry solicitors so desperately seem to desire.
The most recent EPA standards, finalized in March (after being softened at the auto industry’s request), do not mandate any particular powertrain, but rather require steep emissions cuts – and EVs are the easiest way to achieve lower emissions.
Notably, Tesla lobbied in favor of making this last set of standards stronger, and they also lobbied against ruining the Obama/CA standards in 2016 – being one of very few automakers who were on the correct side of that discussion.
Despite that the President Biden EPA’s rules do not mandate any particular powertrain, Mr. Trump, in his usual ignorance, has said that he will end the nonexistent EV mandate. And now that he has received more votes than his opponent for the first time (after three tries, and despite committing treason in 2021 for which there is a clear legal remedy), it looks like the upcoming EPA might be directed to end these emissions cuts and fuel/health cost savings for Americans.
But in this instance, it sounds like the automakers might actually do the right thing for once, and ask the government not to do any rollbacks, and instead let them continue on with the plans without disruption from a convicted felon who seems determined to cede a US EV manufacturing boom back to China.
Detroit’s Big Three automakers – GM, Ford and Stellantis – are all reportedly trying to figure out how to ensure that these rules stay in place. The mentality is that constantly changing regulations are not beneficial for companies – particularly in the auto realm, where models take on the order of 7 years to plan and execute. Long-term planning is important for the hundreds of billions in manufacturing investment that EVs have attracted in the US during Biden’s EV push.
These attitudes are notable, given that this is not what automakers did in 2016/2017. That time, they compulsively pushed for fewer regulations, and now they are asking for regulations to remain in place.
It’s further notable that Tesla CEO Elon Musk, whose company lobbied strongly in favor of emissions cuts and makes more use of the federal EV tax credit than any other company, is now allied with the very entity that’s looking to harm EVs. It seems that we have entered opposite world.
On the other hand, a former reality TV host – tagged along with by the CEO of the company that has sold more electric cars than any other – seem determined to kill electric cars, despite the harm that would cause to Americans’ pocketbooks and health insurance premiums. And that famously vindictive character may be even more spurred towards this harmful course of action after failing in his efforts the first time.
Who ya got?
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