France’s industry moves to oil in fear of Russia’s shortage of gas

• France’s industry is hastening its emergency plans and switching its gas boilers to oil
• Several prominent CEOs claimed they were putting plans in place for potential blackouts while gathered over the weekend at a business and economics summit in southern France.
• The head of Michelin (MICP.PA), one of the top tyre manufacturers in the world, stated, “What we’ve done is we’ve modified our boilers, so they can run on gas or oil, and we can even switch to coal if we need to.

France’s industry is hastening its emergency plans and switching its gas boilers to oil in an effort to prevent a disruption in the event that further cuts to Russian gas supplies result in blackouts.

Several prominent CEOs claimed they were putting plans in place for potential blackouts while gathered over the weekend at a business and economics summit in southern France.

The head of Michelin (MICP.PA), one of the top tyre manufacturers in the world, stated, “What we’ve done is we’ve modified our boilers, so they can run on gas or oil, and we can even switch to coal if we need to.”

While a gas shortage in Europe was likely, he continued, “the idea is to prevent having to shut down a plant in case we encounter a shortage.” He noted that oil would still be available as a backup.

Menegaux claimed that since it takes days to start up tyre production in a factory, it is crucial to keep a stable energy supply.

Russia’s primary pipeline for delivering gas to western Europe, Nord Stream 1, saw its flow rates restricted to 40% of capacity in June. Politicians and business leaders worry that the Russian invasion of Ukraine, which Moscow refers to as a “special military operation,” may lead to additional supply shortages.

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