On November 8, 2011, the “North Stream 1” natural gas pipeline was completed. “North Stream 1” was put into use, and Russia sent 55 billion cubic meters of natural gas to Europe every year.
“North Stream -2”, 9.5 billion euros, of which Gazprom’s total investment and 10% ($950 million) each came from Rosneft, Invest in Oil and Gas, Royal Brand, Germany’s Uniper and Germany’s Wintershall) financing. After the project is fully put into operation, Russia will deliver 55 billion cubic meters of pipeline natural gas to Europe every year.
Swedish TV reported on September 27 that the Swedish measuring station detected two strong underwater explosions in the same waters where the “Nord Stream-1” and “North Stream-2” gas pipelines leaked the previous day. The report quoted Swedish seismologist Bjorn Lund as saying that the explosion occurred at 0:03 and 17:04 GMT on the 26th, and one of the earthquakes was equivalent to a magnitude of 2.3. Russian Presidential Press Secretary Peskov said on the 27th that the incident is unprecedented and very disturbing, and it is not clear what the nature is.
A surge in gas prices caused by supply shortages is fueling inflation, putting unprecedented pressure on production by Europe’s energy-intensive companies. Electricity prices in Germany have exceeded 1,000 euros per megawatt-hour this month, and France is expected to soar to 1,130 euros per megawatt-hour next year, according to the European Energy Exchange; electricity prices in much of Western Europe are already as high as 1,000 euros per megawatt-hour. More than 600 euros, more than 8 times the same period last year. Driven by soaring energy prices, the Eurozone Harmonized Consumer Price Index (HICP) climbed further to 9.1% in August this year, while the core HICP hit a high of 5.5%, according to data released by Eurostat. In the context of the failure to achieve a major breakthrough in the European energy crisis, the occurrence of the “North Stream Gas Pipeline Leakage” made the situation worse.
Electricity and gas prices in Europe are now close to 10 times their historical average.Under normal circumstances, Europe spends about 2% of GDP on energy, but amid soaring prices, that has soared to an estimated 12%. Such high spending means that many industries in Europe are scaling back operations or going out of business altogether. Aluminum makers, fertilizer producers, metal smelters and glass makers are particularly vulnerable to high oil prices. This means that the European economy may fall into a deep recession in the next few years.