Wishing Warily for a Wonderful Winter Wonderland!

This series examines Guyana’s Oil & Gas options globally on the eve of the Final Quarter of the 21st Year of Century 21, as the world’s richest nations pay higher costs to fight inflation and try to avoid pending recession, while also scurrying to secure adequate alternative energy supplies to replace Russian gas.

IT used to be that by this time every year, there’d already be signs of preparations for the Christmas Season, businesses advertising holiday deals and Caribbean people abroad packing suitcases for their annual return home as visiting nationals for the warm holidays leading into the New year, while their adopted countries in Europe and North America start freezing into the Winter Wonderlands described in Christmas carols.

But the new norm since 2020 (when COVID-19 changed everything for everyone everywhere) has been to be extra cautious, first about Social Distancing, now about being extra careful about spending.

In the over seven months since the February 24 Russian military intervention in Ukraine, major non-oil-producing nations have been scrambling to secure reliable sources of much-needed alternative supplies to address the imbalances created by Europe’s decision to wean itself off Russian gas.

Some former Soviet East European states agreed, some also reluctantly, to the costly European Union (EU) proposal to cut their ages-old energy agreements with Moscow, many dating back to when they existed separately within the Union of Soviet Socialist Republics (USSR).

The economic costs and effects of the Russia sanctions have also hit poorest citizens the hardest across the continent, who’d become accustomed to relatively cheaper gas from Russia for quite some time, but now have to pay much more – 80 per cent more on energy bills in the UK, as of October 1, 2022.

Without salary increases and despite government promises to help ease their squeeze, European households affected have seen food and fuel prices rise astronomically, forcing many middle-class families into relative poverty — and the poor into destitution.

Not that governments don’t want to help, but they simply can’t.

The World Bank and the International Monetary Fund (IMF) are predicting inflation, already at a 40-year high in the UK and USA, will lead to global recession in 2023; and both have also drastically lowered their global growth projections, while warning the UK against spending without taxing.

The implications of current conditions are simply blistering cold for Europe.

Russia is turning up the heat ahead of what promises to be Europe’s coldest winter in five decades and on Wednesday President Putin invited European nations that turned the taps off to start talking with Moscow about turning them back on.

But the EU is accusing Moscow of ‘weaponizing energy’, while Europe’s governments are busily trying to assure citizens, without any clear assurance, that their winter will not be as harsh as the weather reports and met services predict, or that (in the UK’s case) households may, ‘in a worse-case scenario’ have to face ‘up to three hours of blackouts daily’.

But the cost of keeping Europe warm without Russian gas and in the absence of any reliable alternative sources except for traditional OPEC members – and at their price — most government affected everywhere are in a tight fit, if not a combined economic and political straightjacket, with all the attendant social consequences.

Replacing Russian gas is such a nightmare that European governments are still quietly but effectively divided over just how fast the transition period should be, Brussels pressing the less-willing East European states, resulting in new political problems for them at home, as more citizens say their governments should spend less on military support for Ukraine and more on lowering food and energy prices at home.

G7 nations – the world’s seven richest – are spending more to stay afloat, but also more on arming Ukraine, the USA alone having committed US $70 billion in the past seven months; but their debts are also skyrocketing, the US now owing over $31 trillion, while the UK’s recent controversial and apparently costly mini budget will cost 53 billion Pounds (Sterling) to implement without taxes.

Ukraine aid fatigue is starting to take its toll as winter approaches and governments seek to avoid the political costs of allowing citizens to freeze on account of their policies.

The EU is also now being accused of promising more than delivering, having only coughed-up one billion of the nine billion Euros promised to Ukraine to help avoid a definite winter wipeout.

The EU, G7 and NATO all met this week and promised to support Ukraine ‘all the way and for as long it takes’, providing ‘everything it will need to win the war…’ — except energy, underlined by Russia knocking-off 30 per cent of Ukraine’s energy and utility supplies after its bridge to Crimea was bombed on President Vladimir Putin’s birthday.

Putin is still saying to Europe: ‘If you want heat for winter, let’s talk!’

But Brussels isn’t likely to take the bait, member-states most likely to be encouraged to shop anywhere else than Russia for new energy deals.

Non-OPEC and newly-emerging oil and gas nations worldwide will be quite interested in bidding or being approached to provide alternative supplies, but Guyana’s government won’t necessarily have to join the line, as its oil and gas is already in high demand.

Then UK Prime Minister Boris Johnson opened related talks with President Dr Irfaan Ali during his last visit to London, while India, Qatar and many others have shown recent interest in filling-up their reserves with Guyana oil and gas.

Besides, the companies actually digging and extracting are always in the business of finding and servicing new markets.

Guyana’s energy products therefore have a bright future on the global market; and it’s only a matter of time before El Dorado’s black gold starts crossing the Atlantic and flowing through Europe’s pipelines – maybe not in time to guarantee the continent a wonderful winter wonderland in 2022, but probably in 2023 – and beyond.