From Blackout News

Germany is facing a devastating energy crisis that is seriously threatening its security of supply. US President Joe Biden has unexpectedly halted the expansion of liquefied natural gas (LNG), putting Germany in a precarious position.

The country has relied heavily on LNG from the US to become independent of Russian pipeline gas. Biden’s decision now has far-reaching implications that could pose serious problems for German energy policy (berliner-zeitung: 26.01.24).

Germany in Energy Crisis: How Biden’s Decision Threatens Germany’s Energy Supply

Biden has halted construction projects for new LNG terminals for the time being, stressing the importance of climate protection in the face of the climate crisis. The U.S. is the world’s largest exporter of LNG, but the U.S. government has put new export terminals on hold for now.

This has implications for Germany, as it has sourced most of its LNG from the US, especially after saying goodbye to Russian gas. Representatives of the U.S. energy industry have turned to the U.S. government about Europe’s jobs and security of supply, but the focus is on climate protection.

Permits have already been issued for some terminal projects, but new export licenses will not be issued for the time being. This affects four ongoing projects and could affect Germany’s energy supply.

Germany in the LNG crisis – hedge funds are already betting on price losses of German companies

Much of Germany’s LNG comes from the US, where it is often extracted using fracking. However, the origin and composition of the LNG are not always clear.

Investors have raised concerns about Germany’s energy policy before Biden made his decision. A hedge fund founder criticized German policies and sees favorable conditions for energy companies such as RWE AG, Engie SA and SSE Plc.

Anglo-Saxon hedge funds have placed short positions against German companies, fearing a slump in global demand and price losses. Qube Research & Technologies has bet more than $1 billion against German companies, including Volkswagen and Deutsche Bank.

Germany must act urgently to secure its energy future

Some market observers point out that short selling must be reported, while betting on rising prices does not have to. In addition, many funds use short positions to hedge their investments.

Deutsche Umwelthilfe and Greenpeace welcome Biden’s decision and demand that Germany also review and stop LNG projects, as they are incompatible with climate protection.

Overall, Germany is facing challenging times in terms of energy policy, as it must look for new solutions for its energy supply, while at the same time looking at the environmental impact.