Europe’s Energy Crisis Is Spilling Over to the World Economy

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Europe’s Energy Crisis Is Spilling Over to the World Economy By Nomi Prins, Editor, Inside Wall Street with Nomi Prins Imagine the government controlling the air-conditioning temperature… Utilities burning coal and firewood at an industrial scale… Businesses facing imminent closure due to surging energy costs… And people setting their gas bills ablaze in public and on TikTok. That’s the reality for millions of people living in Europe right now. And as I write this, they are bracing for the arrival of a long, cold winter. I learned about their fears firsthand on a recent trip to England. And as I told you in [yesterday’s video update from Birmingham]( everyone there is talking about oppressive energy bills and how they’re being impacted by them. But this “European” energy crisis is not restricted to Europe. It’s spilling over into the entire global economy. And as such, it has very serious implications for us on this side of the pond… and on our finances. So today, in the first of a two-part essay, I’ll explore the main reason for Europe’s energy woes. And tomorrow, I’ll show you why it affects you, too… and how you can counter the effects of it in your portfolio. But first, let’s look at the main reason behind the energy crisis that’s raging in Europe right now… Recommended Link [New Battery Tech to “Eat Lithium’s Lunch”?]( [image]( The lithium-ion battery transformed Tesla from the laughingstock of the auto industry into the biggest car company in history. But according to Bloomberg… [This new battery technology “could eat lithium’s lunch.”]( Because it can store energy up to 94% cheaper than a Tesla lithium-ion battery. It’s a “totally new approach to battery technology,” says the U.S. Department of Energy. Powermag calls it a “trillion-dollar holy grail.” And that’s just the beginning… Because according to Forbes, a $130 trillion energy revolution is coming. To get in on the ground floor of this opportunity… Former Goldman Sachs executive Nomi Prins is recommending [this tiny $4 company]( that’s backed by billionaires Bill Gates, Jack Ma, Richard Branson, Michael Bloomberg, & Jeff Bezos. [Click here for the full story.]( -- Why Europe Loves Natural Gas One of the main factors driving the energy crisis in Europe is the rise in natural gas prices. Europe loves natural gas. It gets about a quarter of its energy from it. And what’s not to love? It’s a superior form of fuel to oil and coal because of its energy density. Natural gas is versatile. You can use it to heat your home or to spin a turbine and produce electricity. You can use it to power home cooking appliances and vehicles. You can also use it to make fertilizer. And that’s crucial for the food production industry, [as I wrote a few months ago](. Natural gas also produces less pollution than some other fuels. It emits about half as much carbon dioxide as coal, for example. [Featured: The diversification method is crushing people.]( The upshot is that European nations wanted to move away from the dirtier, polluting fossil fuels, such as coal and oil, and, in some cases (think Germany), nuclear. So it had every incentive to fall in love with natural gas. But there was a problem… You see, there are two ways to move natural gas around. The first is by sea, using liquified natural gas (LNG) carriers. This option requires an export facility to chill the natural gas down until it becomes liquid. It is then pumped onto these giant boats and shipped across the world. Then on the other end, you need an import terminal to re-gasify it. All this infrastructure takes billions to make and years to construct. The second option is much simpler. It involves transporting natural gas via pipeline. Europe chose the easier way. It imported natural gas from Russia through pipelines. Russia was right next door, after all. And it produced lots of natural gas. Recommended Link [“The 10-Second Trading Method That Helped Me Change My Life” (Live Demo Below) – Jeff Clark]( [ad_img]( “Hi. My name is Jeff Clark. For the past 36 years, I’ve helped people from all walks of life retire wealthy. Retired school teachers, doctors, even the occasional pro athlete. But I haven’t done it the usual way. My method is different. It’s unlike anything you’ve probably ever seen before. We’re offering it right now for just $19. That’s the lowest price currently offered for a trading research service. And it won’t be available for long. [Watch this 10-second “live demo”]( to see how it works. This 10-second method helped me change my life. And I still use it to generate tens of thousands of dollars every year.” [Learn how to get it here for just $19 for a one-year subscription.]( -- From Nord Stream to No Stream Up until recently, Russia was a major exporter of natural gas to the rest of Europe. Last year, the European Union (EU) got roughly 45% of its imported natural gas from Russia, according to the International Energy Agency. Russian gas reaches Europe via a complex network of pipelines running through eastern Europe. The most important pipeline is Nord Stream 1. It’s approximately 1,200 kilometers long and runs under the Baltic Sea between Russia and Germany. Up to 170 million cubic meters of gas can flow through Nord Stream 1 per day. Since it became operational in 2011, more than 441 billion cubic meters of Russian gas have flowed to Europe via Nord Stream 1. In 2021, Europe imported 155 billion cubic meters of natural gas from Russia. Nearly 40% – 59 billion cubic meters – came through Nord Stream 1. Nord Stream 1 is owned and operated by Nord Stream AG, whose majority shareholder is the Russian state company Gazprom. For years, Nord Stream 1 has embodied the tacit deal between Russia and the European Union. Russia was willing to supply copious amounts of natural gas at favorable prices. It developed infrastructure to take its gas to Europe. Europe built industries that depend on that cheap supply of Russian gas. And industrial powerhouses, like Germany, built their entire economies around it. But then, earlier this year, Russia went to war with Ukraine. That changed everything. The EU slapped Russia with unprecedented sanctions. Russia retaliated by cutting the flow of natural gas via Nord Stream 1 by about 60%. Then during its annual scheduled maintenance this summer, the pipeline flow dropped to zero. When it came back online, it came back at 40% capacity, before dropping to 20%. Then, at the end of August, Russia shut down the pipeline again, supposedly for maintenance. This shutdown was to last three days. But at writing, the pipeline remains offline. [Featured: My exclusive trading method could make all your financial worries go away - Jeff Clark]( Russia’s Endgame Could Mean Lights Out for Europe As a result of all these actions, the European gas price went parabolic this summer. At one point, it cost $340 per megawatt hour (MWh). That’s 312% higher than in January 2022, before Russia invaded Ukraine. You can see the huge spike in natural gas prices that coincided with the Nord Stream 1 shutdown in the chart below. [Chart] Now, while the price has dropped back somewhat in recent weeks, as Europe secures alternative supplies, the uncertainty surrounding their natural gas supply is a huge concern for the eurozone countries. Consider this… At about $12 per megawatt hour (MWh) in November 2021, the eurozone’s energy import costs were $200 billion. That’s 1.6% of its GDP. If gas settles at about $200 per MWh, this number will increase by roughly $700 billion to 7% of GDP. At $300 per MWh, it would rise by about $900 billion. That’s a crippling 8.5% of its GDP. So, Russia’s endgame is simple – to keep gas prices as high as possible to inflict maximum pain on Europe so it eases off on sanctions. Recommended Link Market Wizard Reveals: [The One Ticker Retirement Plan]( [image]( Introducing the “One Ticker Retirement Plan”… It’s a way to trade just one ticker… And potentially make all the money you need – no matter what happens in the stock market. Sounds too good to be true? [Larry reveals everything in this interview – including the name of the ticker you need to get started.]( -- Energy Rations Becoming a Reality The way things are going, it looks inevitable that Europe will have to ration gas and energy come winter. Germany is already discussing its options. German politicians are trying to decide how German industry will be prioritized. Difficult questions are being asked. Questions like… Who gets the gas when there is a shortage? Who has to close the shop? But whichever way they slice it, it will likely end up plunging Europe’s largest economy into crisis. And if that happens, the entire European Union – and therefore, potentially the entire world – is in trouble. Tomorrow, in the second part of this two-part essay, I’ll show you how to turn rising energy prices into profits in your portfolio. Regards, [signature] Nomi Prins Editor, Inside Wall Street with Nomi Prins P.S. Insiders are gearing up for one of the biggest wealth transfers in history. Everybody is positioning themselves to profit from the coming revolution in how the world creates, consumes, and stores energy. $755 billion flowed into this energy shift this year. The recent energy crisis has lit a fire under this shift. And Forbes predicts that number will surge to $130 trillion. You probably won’t hear about it from the mainstream media. Elon Musk is changing Tesla’s entire business model to capitalize on this energy revolution. But you won’t hear about that on the news, either. To find out all about it – and a way you can get in on the action – [just watch this presentation I recorded recently](. --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: Inside Wall Street Feedback). --------------------------------------------------------------- MAILBAG More readers weigh in following Peter Zeihan’s essays last week, particularly regarding the different approaches various regions are taking to the energy transition… and what type of energy is most effective. [Catch up [here]( and [here]( As to the claim that solar can't do any good at night, if solar is to have more than a 20% to 30% impact, batteries sufficient to carry through the night are essential. Germany's peak demand at night means bigger batteries, as does cloudy weather. But peak demand in winter is an unavoidable limiter. I have about a two-day battery capacity and because I use waste wood heat, my peak demand is in summer. And I get 80% of my electricity from solar PV in Indiana. – Wayne R. Two words: “cold fusion.” If and when cold fusion is developed and comes online, it will be a game changer. Hydrogen is the most abundant energy form in the universe. – Linda M. I agree that geography is a factor that countries must consider when evaluating where or how to invest in new and old (nuclear) technologies. First, we must differentiate two distinct programs: short- or near-term solutions and long-term solutions. Second, for the long term, I would recommend that new electricity-generating power plants should rely on the use of hydrogen fuel generated (by electrolysis of water) or collected (from the atmosphere) at newly constructed facilities close to the power plants. The byproduct is water, with no carbon containing byproducts. To make this work, the generation of hydrogen must be optimized, which is in the process of being achieved. The electrolysis step would be powered by wind and/or solar energy, although nuclear energy might be considered if radioactive waste products can be safely reused or disposed of. Third, in the near term, batteries, not hydrogen or fuel cells, should be the source of power for cars, trucks, and probably buses because of the near-term availability of “super batteries,” which promise to power cars well over 500 miles on a single charge, have a lifetime of almost one million miles, are non-flammable, and will be capable of being fully charged in under 20 minutes. Those driving less than 200 miles per day can utilize less expensive batteries and rely on home charging and less on charging stations. Electric vehicles will require less maintenance and lower operating costs than current ICEs (internal combustion engines) and will be less likely to cause explosions or fires on impact than hydrogen-powered vehicles or vehicles powered by lithium batteries. Charging stations do need to be improved to provide the lower charge times needed. This framework for reducing our dependence on fossil fuels may need some tweaking… But it shows the U.S., and probably the world, how to better plan to get from where we are now… to where we want to be by 2028 and beyond. – Martin G. What energy sources do you see as long-term solutions versus short-term solutions, as reader Martin differentiates? If Germany’s economy plunges as a result of the energy crisis, how does that impact the global economy? Write us at [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: Europe’s Energy Crisis Is Spilling Over to the World Economy). IN CASE YOU MISSED IT… [“No Historic Crash Is Coming, What’s NEXT, Is Much Worse…” (PhD Economist)]( Has President Biden’s new executive order… Alongside MIT, 77 global Governments, The Gates Foundation, UNICEF, and The Clinton Development Initiative… [Ignited a historic $40 trillion transfer of wealth from the middle class, to the rich?]( Billionaire Stanley Druckenmiller says: “This is the biggest redistribution of wealth from the middle class and the poor… to the rich, ever.” Newsweek says… “[This] Will Be The End of American Freedom.” And HuffPost says… “[This] Is Making The Rich Richer and Leaving You Behind.” One of the nation’s leading economists (Nomi Prins) has traveled to Delray Beach, Florida to [uncover exactly what’s happening and what this means for your money.]( [Click Here To Watch.]( [image]( Get Instant Access Click to read these free reports and automatically sign up for daily research. 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