Shell CEO warns Europe's energy crisis may last ‘several winters’

2022-08-30 19:28:29
Shell CEO warns Europe's energy crisis may last ‘several winters’

Europe could face several winters of gas shortages as cuts to Russian supplies send European wholesale gas prices to a record high, according to Shell chief executive officer Ben van Beurden.

Speaking at a news conference in Norway on Monday, Van Beurden said European leaders will have to find "solutions" to energy constraints over a "number of winters" amid the simmering war in Ukraine that has seen Western countries impose sanctions on Moscow.

“It may well be that we will have a number of winters where we have to somehow find solutions,” he said, adding that discussions will likely test whether European Union member states can work together to keep the key industries running.

These possible solutions, he hastened to add, may include measures like rationing or the "very, very quick" development of sources of alternative energy.

The forecast from the head of Europe’s largest oil and gas company comes as the continent is currently faced with an unprecedented energy crisis with gas and electricity prices skyrocketing amid the developments in Ukraine.

Russia launched a military operation in Ukraine in late February, following Kiev’s failure to implement the terms of the Minsk agreements and Moscow’s recognition of the breakaway regions of Donetsk and Luhansk.

At the time, Russian President Vladimir Putin said one of the goals of what he called a “special military operation” was to “de-Nazify” Ukraine.

European governments have criticized Russia over the gas supply cuts in a tit-for-tat response to Western sanctions over the war in Ukraine.

Soaring energy prices coupled with runaway inflation have imperiled the livelihood of Europeans after many EU countries severed their energy ties with Russia, the main supplier of natural gas to Europe, triggering a worse economic crisis on the continent.

Russia, in turn, slashed natural gas supplies to the continent, with fears of more drastic cuts in the winter amid growing tensions between Moscow and the West.

Van Beurden emphasized that solutions to the energy crisis consist of “efficiency savings, through rationing and a very, very quick build out of alternatives”.

“That this is going to be somehow easy, or over, I think is a fantasy that we should put aside,” he added.

The president of the European Commission, Ursula von der Leyen, said in Slovenia on Monday that the EU is working on a plan that would introduce “emergency interventions” in addition to longer-term energy market reforms.

“Skyrocketing electricity prices are now exposing, for different reasons, the limitations of our current electricity market design,” she said.

The emergency measures package is expected to be unveiled by the end of the week.

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