Save for later Print Download Share LinkedIn Twitter Sky-high natural gas prices in Europe have caught the attention of politicians on both sides of the Atlantic, prompting them to suggest that Russia may be trying to manipulate the market.The EU is looking at ways to respond to the crisis, which has also pushed electricity prices to record highs and caused industries that are big consumers of gas to close down some production facilities. Brussels has argued that the region's gas shortage and the accompanying spike in prices show the need to accelerate the transition from fossil fuels to carbon-free energy. But there are also concerns among European politicians that rising utility bills could cause a consumer backlash against renewables.Perfect StormThe surge in gas prices reflects a perfect storm of contributing factors, including an extended cold snap earlier this year that left European gas storage volumes at historic lows. Higher demand for gas from the power generation sector — as the global economy recovers from the Covid-19 downturn — and limited availability of spot LNG cargoes have also contributed.But attention has focused in particular on Russia — the region's largest gas supplier — which has limited pipeline gas deliveries to Europe to contractually obligated volumes, rather than supplying more gas to its largest export market when it is needed most.The day-ahead gas contract at the Dutch TTF hub — the European price benchmark — was assessed by Energy Intelligence at €73.75 per megawatt hour ($25.89 per million Btu) on Sep. 20. That's roughly four times as much as at the start of the year and some six times as much as a year ago.Washington Speaks Out Washington has been monitoring the situation and indicated that it will support Europe in the face of possible market manipulation, but it has not explicitly accused Russia of such activity.During a visit to Warsaw this week, US Energy Secretary Jennifer Granholm said Europe's high gas prices have raised "serious concerns and questions" about the reliability and security of gas supplies to the region, which is heavily dependent on imports. The US and its partners have to "stand up" to players who stand to benefit from holding back supplies and Washington is looking at the matter "very seriously," Granholm said.But the US is not merely a supportive ally in the current situation. Its LNG exports compete for market share in Europe against pipeline deliveries from Russia's state-controlled gas giant Gazprom.Washington has been an outspoken opponent of Gazprom's Nord Stream 2 pipeline, arguing that it will make Europe even more dependent on Russian gas."We want to have our eye on the issue of any manipulation of gas prices by hoarding, or the failure to produce adequate supply," Granholm said.Euro MPs Seek Gazprom ProbeThe European Commission, the EU's executive arm, said it is monitoring energy prices, while a group of 42 members of the European Parliament sent the commission a letter urging it to open an investigation. "We call on the European Commission to urgently open an investigation into possible deliberate market manipulation by Gazprom and potential violation of EU competition rules," they wrote.Russia and Gazprom have rejected any suggestion of wrong-doing or seeking to take advantage of customers. Kremlin spokesman Dmitry Peskov said the surge in European gas prices was limited to the spot market, while buyers who hold long-term supply contracts with Gazprom have not been hurt. Governments Help ConsumersThe European Commission has seized on the current situation as an opportunity to press EU member states to move swiftly to adopt the commission's ambitious "Fit for 55" energy transition proposals.EU Commissioner Kadri Simson told the bloc's energy ministers this week that Europe's vertiginous gas prices have been sending a strong signal about the need "to end our dependence on foreign, volatile fossil fuels as soon as possible." But national governments — some facing elections soon — have been focusing more on measures that will prevent the surge in wholesale energy prices from being fully reflected in the retail energy bills sent to consumers.Spain has presented a legislative package that includes temporary tax cuts, a gas price cap and a plan to redirect any windfall profits that utilities pocket to measures that will alleviate the financial burden borne by consumers.Price Caps and SubsidiesItaly, Greece and Portugal have all proposed subsidies or price caps to support hard-pressed consumers. France, with an eye on next year's presidential election, plans to issue a special €100 ($117) subsidy to almost 6 million low-income households by December.Germany — Europe's largest gas consumer — has not announced any measures ahead of its Sep. 26 federal elections, in which climate policy has been one of the main campaign issues. In the UK — no longer a member of the EU — high gas and power prices have led to the bankruptcy of several smaller energy providers. The UK has faced the additional problem of a downed electricity connection with France that has created more upward pressure on prices. In Poland — a major producer and user of coal — the Eurosceptic government has argued that there is a direct link between high energy prices and the EU's policy of promoting a transition to low-carbon energy to mitigate climate change.