Gas as Weapon Means Europe Must Think Big

February 25, 2022

Above, Deborah Gordon of RMI – I interviewed her prior to the current conflict.

Nikos Tsafos is at the Center for Strategic and International Studies.

Nikos Tsafos on Twitter:

How do you ensure energy security against an enemy? 

Europe bought energy from the Soviets during an era of managed rivalry. It bought energy from a weak Russia in the 1990s, and handled occasional flareups during Russia’s resurgence in the 2000s and 2010s. But this is new. 

Few of the scenarios or strategies that Europe has used to secure its energy needs are designed for the world that we woke up to today. The European energy security toolkit is premised on a geopolitical balance that has been totally upended. 

The war will reshape Europe’s tolerance for relying on Russian energy. No doubt. Eventually it will rewire the Eurasian energy system. But this is years away. How can Europe safeguard its energy system now? 

Europe needs bold ideas. 

How about a European Defense Production Act to make and install 100 million heat pumps? 

How do you break the link between gas and power prices? 

Do you pay suppliers to boost gas supply for a while?

Pay industries to not consume gas?

Think big. 

In the end, Europe must also accept that energy security is often achieved through means that have nothing to do with energy. 

You cannot fight tanks and helicopters with money and rules. Only raw military force can do that. 

Sooner or later energy security is just security. 

New York Times:

The punishing sanctions that the United States and European Union have so far announced against Russia for its invasion of Ukraine include shutting the government and banks out of global financial markets, restricting technology exports and freezing assets of influential Russians. Noticeably missing from that list is a reprisal that might cause Russia the most pain: choking off the export of Russian fuel.

The omission is not surprising. In recent years, the European Union has received nearly 40 percent of its gas and more than a quarter of its oil from Russia. That energy heats Europe’s homes, powers its factories and fuels its vehicles, while pumping enormous sums of money into the Russian economy.

Losing out on those revenues would be hard for Russia, which relies heavily on energy exports to finance its government operations and support its economy. Oil and gas exports provide more than a third of the national budget. But a cutoff would hurt Europe as well.

“You want the sanctions to hurt the perpetrator more than the victim,” said David L. Goldwyn, who served as a State Department special envoy on energy in the Obama administration.

The situation would surprise some of last century’s cold warriors. Throughout most of the post-World War II era of superpower confrontation, many analysts believed that the more economically intertwined the Soviet Union and the West became, the less likely it was that conflicts would arise. Trade and economic self-interest would ultimately make allies out of everybody, the argument went.

Now, the European Union is Russia’s largest trading partner, accounting for 37 percent of its global trade in 2020. About 70 percent of Russian gas exports and half of its oil exports go to Europe.

The flip side of mutual interest is mutual pain.

European leaders are caught between wanting to punish Russia for its aggression and to protect their own economies.

Associated Press:

The crisis shows Europe’s vulnerability after years of limited progress in completing an “energy union” — a 2015 vision to allow affordable gas and electricity to flow across borders while diversifying suppliers and reaching climate goals. As renewables like solar and wind are slowly built up and coal and other fossil fuels are phased out, Europe still needs natural gas, and it’s dependent on Russia to get it

That came into sharp relief as Europe’s gas supply dropped and prices soared partly because Russia sold less gas than normal, squeezing households and businesses with rising costs.

With gas reserves low and concerns that a full-blown war could interrupt pipeline flows from Russia, the EU is focused on getting liquefied natural gas, or LNG, by shipfrom the United States, Qatar, Algeria and elsewhere until renewables catch up. Environmentalists fear making that even a short-term priority could set back Europe’s goals to move away from fossil fuels.

Doubling down on renewables would help reduce dependency on Russian gas, EU Energy Commissioner Kadri Simson said Monday, but reiterated that energy security was critical. An advisory group to coordinate the EU’s gas supply security was meeting Tuesday because “it’s important that contingency plans are ready for the worst-case scenario,” she said.

The 27-nation EU is “on the safe side for this winter” but doing “everything possible to get rid of this dependency,” European Commission President Ursula Von der Leyen said Saturday at the Munich Security Conference. She accused Russia’s state-owned gas giant Gazprom of “deliberately trying to store and deliver as little as possible while prices and demand are skyrocketing.”

Russia has fulfilled long-term contracts but failed to sell additional gas on the spot market, while pushing for German approval of its contentious Nord Stream 2 pipeline as a way to solve Europe’s gas squeeze. Germany suspended the process to certify the pipeline, Chancellor Olaf Scholz said Tuesday, after Russia recognized the independence of separatist regions in Ukraine.

“We are aware about the low resources of gas in European countries,” Russian Energy Minister Nikolai Shulginov said Tuesday at a forum of gas producers in Qatar, according to a provided English translation. He said long-term gas contracts help curb price volatility and that Russian energy companies are “fully committed” to fulfilling existing agreements.

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