There’s not enough gas to go around
Will war-rattled Europe deprive emerging Asia of winter fuel and food?
They say that those who lack resources become resourceful. With an almighty global tussle brewing over scarce supplies of natural gas, the term ‘resourceful’ is about to take on new meaning. This summer, rich European nations will go head-to-head with poorer emerging Asian economies, with the highest bidder taking the spoils. This is an annual event that Asia usually wins — but the stakes are much higher this year.
In ‘normal’ times, China, Japan, South Korea, Taiwan and other major importing nations instruct their gas buyers to outbid others to buy enough liquefied natural gas (LNG) in the spot market cover their winter needs. Cargoes follow the money and flow east.
Only when Asia has had its fill does Europe get a look-in. This is because Asia doesn’t have much gas storage capacity to lean on, and privately-held European companies must obey the laws of free market economics; they won’t willingly incur costs that they can’t pass onto consumers. A state mandate to buy LNG at any cost – …