In two major headline stories today on Monday, July 18th, there was some bad news for Germany and Europe, but some potentially good news for the U.S.
This is not a good time to be dependent on public utilities if you live in Europe, especially Germany, as Russian natural gas supplier Gazprom reportedly declared a force majeure today on the Nord Stream 1 pipeline into Europe, stating that “extraordinary” circumstances outside its control would not allow them to reopen it.
Already days before the July 22 European “Doomsday” when the scheduled Russian 10-day maintenance of the crucial Nord Stream pipeline to Germany is slated to end – but which was thrown into deep doubt given Gazprom recently said it can no longer guarantee its “good functioning” due to crucial turbines being previously held up in Canada related to sanctions – the Russian energy giant has declared Force Majeure to one major European customer.
Simply put, Gazprom declared extraordinary and extreme circumstances to void itself from all contractual obligations to this customer, thus the gas will stop flowing indefinitely, as Reuters reports in a breaking development Monday, “Russian gas export monopoly Gazprom has declared force majeure on gas supplies to Europe to at least one major customer starting June 14, according to the letter seen by Reuters.” The letter is dated July 14. “It said the force majeure measure, a clause invoked when a business is hit by something beyond its control, was effective from deliveries starting from June 14,” writes Reuters.
As we’ve been detailing, German authorities have of late taken unprecedented steps in anticipation of an enduring Russian gas halt, essentially dimming the lights across the country – which has included everything from limiting hot water, to shutting down swimming pools, to quite literally dimming city street lights as it entered “alarm” stage over dwindling supply. (Full article.)
Meanwhile in the U.S., disaster was averted today, at least for now, as it was announced that the Biden Admin has set up an emergency “National Mediation Board” and signed an executive order that prevents any work stoppage for 60 days.
THE WHITE HOUSE HAS ARRIVED: An emergency board to resolve an ongoing labor dispute between rail carriers and the unions that represent their workers will get to work today, averting strikes that seemed imminent.
“I have been notified by the National Mediation Board that in its judgment these disputes threaten substantially to interrupt interstate commerce to a degree that would deprive a section of the country of essential transportation service,” President Joe Biden wrote Friday in an executive order that prevents any work stoppage for 60 days.
The fine print: The panel will consist of “a chair and two other members, all of whom shall be appointed by the President to investigate and report on these disputes. No member shall be pecuniarily or otherwise interested in any organization of railroad employees or any carrier.” It will “report to the President with respect to the disputes within 30 days of its creation.” (Full article.)
Any “good” news for the short-term is temporary, of course, as the planned collapse of the world’s financial system is now inevitable.
Charles Hugh Smith reminded us all of the Economics 101 lesson in a recent blog post at of two minds.com that when your society is built on debt that cannot be paid back, there is only one solution: DEFAULT.
Gazprom won’t be the first force majeure or bankruptcy that we will be reading about in the news in the days ahead….
UPDATE: Since publishing this article earlier today, Zero Hedge News is reporting that Canadian energy firm TC Energy has declared force majeure on some crude shipments on the Keystone pipeline after a power failure at a pump station in South Dakota. This could affect refineries in the U.S. converting crude oil into gasoline. See: