Europe's energy market faces a 'Lehman moment'; European governments face margin calls of at least $1.5 trillion. How will Europe survive the winter?

First, let’s correct a common misconception: Europe is vast, and while Europe as a whole suffers from severe natural gas shortages, there *is* domestic natural gas supply within Europe itself. What does this mean? Some European countries are hemorrhaging losses—while others are reaping windfall profits. Take a look at this natural gas trade flow map (red = pipeline gas; blue = LNG). Clearly visible in Northern Europe are countries exporting large volumes of gas—so who are they? The Nordic welfare paradise—Norway. So why doesn’t Europe simply ask Norway to ramp up production? On March 16, 2022, Equinor—the Norwegian state-owned energy company—announced it would increase natural gas output over the coming months, aiming for summer production above normal levels to secure gas supplies for EU countries. This means Equinor could raise natural gas exports from the Oseberg field to 1 billion cubic meters and from the Heidrun field by 400 million cubic meters—by September 30. Equinor stated that these additional 1.4 billion cubic meters would meet the annual gas needs of approximately 1.4 million European households. Is this enough? In an ordinary year, Russia supplied over 160 billion cubic meters of gas to Europe—so this incremental volume falls short of *just one day’s* typical Russian supply. Then why doesn’t Europe push Norway to produce even more? We must remember: natural gas is transported either via pipelines or as liquefied natural gas (LNG). Norway’s pipeline capacity is already operating at maximum. In fact, it has already increased supply by 10 billion cubic meters this year. In August 2022, Norwegian Prime Minister Jonas Gahr Støre stated that Norway currently cannot expand its natural gas deliveries to Germany or the rest of Europe. The prime minister emphasized that since the outbreak of the war in Ukraine, Norway’s natural gas production had already risen by nearly 10%. Whether further safe expansion is possible, however, is not a decision for the Norwegian government—it lies with individual companies. To boost output, new gas fields must be developed. But isn’t Europe united? Couldn’t it pressure Norway to lower prices and thus offset soaring energy costs? At Poland’s National Youth Dialogue event in May, Prime Minister Mateusz Morawiecki asked: “Should we pay Norway exorbitant gas fees—four to five times what we paid a year ago? It’s disgusting.” He claimed that Norway—a country of just 5 million people—would earn over €100 billion in excess profits from oil and gas this year. Morawiecki added: “They should share these windfall profits. It’s abnormal—and unjust.” He urged Polish youth to post online messages shaming their Norwegian “friends” into feeling ashamed about these massive gas profits—and thereby pressuring Norway to “share” this wealth. He clarified that this wealth need not necessarily be shared with Poland—but should go to Ukraine. Ukraine is everywhere! In response to Morawiecki’s call for Norway to “share” its windfall profits, Eivind Vad Petersson, State Secretary at Norway’s Ministry of Foreign Affairs, replied: “Although oil revenues have increased due to the conflict in Ukraine, the value of the fund [the Norwegian Government Pension Fund, largely funded by oil revenues] has declined.”

From the North Sea oil fields, examine Norway’s and the UK’s differing oil and gas policies—and their consequences.

Norway expects its liquid petroleum output to grow by 5.2% in 2025, boosted by the start-up of the Johan Castberg oilfield in the Arctic Barents Sea earlier that year. (III) Norway Doubles Down on Oil and Gas Investment in 2025 On January 4, 2025, industry expert Felicity Bradstock published an article titled “Norway Doubles Down on Oil and Gas” on the website OilPrice.com, outlining Norway’s oil and gas investment outlook for 2025. Bradstock noted that, driven by new exploration activity and surging demand for Norwegian natural gas, the country’s oil and gas investment is projected to reach an all-time high in 2025. Although Norway leads globally in renewable energy, it continues to invest heavily in oil and gas production. Its strategy aims to balance fossil fuel output with decarbonization efforts—through electrification and investments in domestic and international renewable energy projects. Following a record-breaking 2024, Norway’s oil and gas investment is expected to rise further in 2025. According to Statistics Norway, total oil and gas investment in 2024 is projected to reach approximately $22.9 billion—setting a new national record. The previous high was $20.4 billion in 2014, when oil prices were exceptionally high and oil and gas companies poured capital into new projects. This Scandinavian petroleum superpower is expected to sustain massive fossil-fuel investment over the coming years. In December 2024, the Norwegian Offshore Directorate announced that oil and gas companies operating in Norway plan to invest around $24.68 billion in 2025. The survey covered 14 firms—including Equinor, Aker, Vår Energi, ConocoPhillips, and Shell—which collectively account for nearly all of Norway’s oil and gas production. These companies plan to drill 45 exploration wells in Norwegian waters in 2025—up from 41 in 2024—and the highest number since 2019. The surge in new exploration reflects heightened demand for Norwegian gas following Russia’s invasion of Ukraine and subsequent Western sanctions on Russian oil. As Western Europe’s largest oil and gas producer—with daily output exceeding 4 million barrels—Norway aims to increase production for decades to come. In December 2024, Vår Energi and Equinor announced a new oil discovery at the Cerisa exploration well near their operational assets in the Barents Sea. Operators estimate the find holds 1.3–4.8 million standard cubic meters of recoverable oil-equivalent resources—marking the fourth consecutive discovery in the region. Beyond prior finds at Gjøa North and Ofelia/Kirre, the Cerisa well can leverage existing infrastructure linked to the Gjøa field, enabling an integrated assessment of total recoverable resources estimated at up to 110 million barrels of oil equivalent.

Equinor Halts Troll Gas Field Modification, Boosting Output

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Equinor cancelled a compressor upgrade on Norway's Troll C field to maintain 2027-2028 output, adding 2.3 billion cubic meters of gas to Europe while raising CO2 emissions versus the original plan.

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