Transcripts. Bannon’s War Room. Dave Walsh Europe's Impending Energy Crisis will Reduce European Nation's GDP by Over 10%. September 8, 2022.
Topic: Europe’s Energy Crisis. Guest Dave Walsh. September 8, 2022.
Transcripts from Bannon’s War Room on Rumble: Dave Walsh: Europe's Impending Energy Crisis will Reduce European Nation's GDP by Over 10%.
Published September 8, 2022.
Peter Navarro:
Dave always good to have you in the War Room sir, pontificate just a little bit about the chess board you're seeing both in Europe and California Sir?
Dave Walsh:
Well in Europe Nord Stream shut down again, indefinitely. Certainly, yeah, it's about pressure on Western Europe,
Peter Navarro:
That’s the pipeline that runs from Russia to Germany or through Germany and the rest of Europe.
Dave Walsh:
Through Germany, feeds Germany Austria Hungary, feeds Western Europe. So, they're claiming that they’re oil leaks in the pipeline and there's always have their picture of Siemens technicians out there beside an RV211 compressor fixing it. It's nothing to do with these compressors or rotable spares. They don't need to be fixed on the fly. No, Putin’s doing his thing, predictably, but the fact of now the head of the EU, Ursula Von von der Leyen doubling down on wind “We will use the power of the wind to free ourselves from Russian fossil fuels and become climate neutral”.
So, she's doubling down, on what hasn't worked but what in reality who's now amping up oil production and gas production mightily to step in, Norway. Norway is the got the Johan Sverdrup field opened up by this, two months another 400,000 barrels per day production out of the North Sea. This was planned some time ago before this crisis, but Norway, the point has not stopped. Its aggressive proper and good for its country, exploitation of North Sea oil and gas. England has stepped out.
They stepped out of that notably about 10 years ago when North Sea production plummeted by 65% was mainly the UK. Norway has continued to their happily selling their oil and gas to neighboring states at prevailing market prices. So, Norway has not given up on this. It's not the conflation in the media of Russian gas. It’s the countries in the in the EU that need gas. We've got stainless steel plants being closed. We've now got all the aluminum smelters in Western European closed. Those are industries almost totally dependent on a continuous baseload electricity not intermittent jagged electricity, to run spelling pods for aluminum..
Peter Navarro:
It's only September and the weather is mild at this point. How bad does this get in January if the Russian pipeline stays closed?
Dave Walsh:
Well, the truth is the storage they're filling up. Germany has and Austria but the 85% complete their storage of natural gas for the Fall. That takes about three months of pressure out of the system, but the winner goes beyond January, goes into February, March and April. The storage they've got, is good news and it's growing, but the max capacity is about three months.
Winter is about six months, most of the period between Nov 1 to April 1, whole 5 months. It's still a huge problem because Germany and Austria, along with England by the way, 95% dependent on fossil fuels, natural gas and oil for a home and building heating. That's always left out of their electricity metrics that they broadcast on renewables. They leave out home and building heating. It's entirely gas and oil. This is a huge problem because you know how cold it gets over there.
Peter Navarro:
And to be clear politically, they'll of course shut down industry before they'll let people freeze in their homes. Has there have been any estimates on the impact on European GDP of this crisis?
Dave Walsh:
Yeah, there's one estimate of about a 3% slip in the next nine months. Peter I would suggest it's going to be way past that. I'd pause at double digits I mean when we're..
Peter Navarro:
No question that no question Europe center recession because of this.
Dave Walsh:
Horrendous. Aluminum plants being shuttered, stainless steel plants being shuttered in Germany. The chemical plants which are a big industry there, BASF, they brought here at South Carolina as well, totally dependent on feedstocks of gas to run those plants. You're talking 20% reductions being announced already know. The flow through impact on the European economy across the board, if it's not 10% I will be shocked. This is this is massive.
Peter Navarro:
And the Euro is plummeting as well because there's no way that they could be raising interest rates at the same rate as everybody else right.
Dave Walsh:
I think your prior point you look at the signals being given by the way the euro is collapsing is giving a signal that this 2.2% GDP decline forecast is way low. It's going to be way beyond that because of this destruction by a lack in gas.
Peter Navarro:
This might be past your expertise, but they've got 10% reduction in European GDP do you know what impact that has on the US GDP?
Dave Walsh:
Well, it's going to flow here, that's the third largest economy in the world collectively is the EU. It would suggest it's going to be some 30% of that flow onto to the US.
Peter Navarro:
They’ll export their energy crisis and recession to us. There is no question we’ll wind up buying more of their stuff at higher prices because of the lower Euro, right?
Dave Walsh:
Right, our cross linkage commercially and trade wise with the UK and especially the German economy is far large than our dependence on the Taiwan economy. It’s very significant.
Peter Navarro:
By the way, the higher price part of that equation comes in because of this disrupted supply chains in production there. The cheap Bureau will give us cheap goods, but everything else being equal but everything isn't equal. it's like yeah you only got a production cost going up hey quick we only got a minute left. Dave quick hit on California and Gavin Newsom.
Dave Walsh:
Well, the issues are identical the ending with Europe they in in the UK, the concurrent destruction of their base load energy sources, nuclear and coal by 46% in Germany by about 44%, reducing shutting down coal plants, shutting down nuclear most all of them except for the last 20%.
That's the driver, California is the same issue it's the same issue. California imports about the 35% of its electricity because of continuous decisions, first in the 80s on new clear no more of that by the 90s, no more coal here began to shut down coal plants and even by the early 2000s they didn't want large combined cycles because they burned something, natural gas. So, you've got a state that important and massive solar is very intermittent…..
Peter Navarro:
Quick what's your social media? You have 10 seconds for that that.
Dave Walsh:
Dave Walsh energy. Thank you, Peter.
Peter Navarro:
You're my brother appreciate you coming in.
END
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