The expansion of fossil fuel interests are central to Putin's invasion of Ukraine. Senior Fellow Daniel Faber outlines this and more in a previous article for the Global Center for Climate Justice. This article aims to build upon Faber’s work by outlining the need for a worldwide transition to renewable energy.
Russia’s war with Ukraine has exposed many problems within Europe’s energy system. First, it reveals a deep and unstable dependency on fossil fuels, specifically a crippling reliance on oil and gas imports from Russia. The disruptions in oil and gas supplies caused by the war and international sanctions on Russia has turned this overreliance into a legitimate security threat to Europe. While the call for a European transition to renewables is supported by sound environmental and economic rationales, the world's current energy crisis umasks the geopolitical and national security imperatives for a more immediate green transition. In this case, Europe's fossil fuel payments to Russia are being used by President Vladimir Putin to pay for the military invasion of Ukraine. Furthermore, as crimes against humanity are committed in Ukraine by the Russian military, European citizens (and people all over the world) suffer from energy shortages and record high energy prices. In turn, these energy shortages have produced record-high profits for the global oil and gas industry, further accentuating the subordination of human rights, economic justice, and concerns for climate change to the short-term material interests of the world’s “oil-igarchs.”
While the war in Ukraine rages on, Russia’s economic war with the rest of Europe is being waged in fossil fuel energy markets, specifically the European market for natural gas. The EU’s deep dependency on Russia’s natural gas supplies to power the residential and commercial sectors has intensified over the last two decades. About 25 percent of the EU’s total energy consumption is provided by natural gas, an overreliance now being exposed by Russia, which supplies 41 percent of Europe’s gas supplies.
The International Energy Agency (IEA), one of the world’s leading research groups on energy, has published alarming reports showing that since Russia invaded Ukraine in late February of 2021, the EU’s supply of Russian natural gas has been dwindling. An IEA report from late July states that prior to the invasion Russia exported between 375-475 million cubic meters (mcm/d) of natural gas to the EU per day. Since the invasion, this number has plummeted from near 350 mcm/d in March to almost 75 mcm/d in late June. The result of this contraction is soaring gas prices for all of Europe.
The EU’s natural gas prices are around 10 times higher than they have been over the last decade, and 10 times higher than current U.S. prices. European governments are now forced to implement desperate policies that significantly impact their citizens. In Germany, households now pay around €500 more per year for energy even after the €65 billion subsidy package revealed September 4th. And in the U.K., residents were notified in August by the energy regulator that annual energy bills will increase by 80 percent. The U.K. based National Energy Action (NEA) estimated at the time that the amount of U.K. households suffering energy poverty would increase from 4.5 million in October 2021 to 8.5 million after October 2022. The UK’s new Prime Minister, Liz Truss, has since shelved this increase by putting a price cap on energy costs for two years at £2,500 per year, lowered from the scheduled £3,549 per year jump.
The impacts of Russian energy sources being intentionally choked off have been compounded by the impacts of climate change on other energy sources. In France, poorly-timed maintenance has shut down some nuclear plants during the crisis, while record heat waves during the summer months forced others to slow or pause operations. This was due to marine environmental laws regulating the temperature of water that is used to cool these plants, and then returned to rivers and lakes. France—the world's most nuclear-dependent nation receives over two-thirds of its energy from nuclear power—is typically a net-exporter of energy. Yet this past summer France became a net-importer of energy. Norway, which relies upon hydroelectric power for over 90 percent of its energy production, has been experiencing record energy prices as the reservoirs are less than half full, even though the average for this time of year is 74.4 percent. This is attributed to a historic European drought, referred to as the “worst in 500 years” by the Global Drought Observatory.
To make matters worse, the Nord 1 pipeline, responsible for one-third of the natural gas distributed from Russia to Europe, has now been shut down twice this summer for supposedly maintenance and technical reasons. However, European politicians are confident that these shutdowns are political moves by Moscow designed to punish the EU. As of September 12th, 2021, the Nord 1 pipeline, which had already been running at limited capacity (lowered to 40 percent in June to 20 percent in July), remains shut off after an announced three day maintenance process which began on August 31st. By September 27th, suspicious leaks in both the Nord 1 and Nord 2 pipelines were found in the Baltic Sea. European governments are already blaming Russia for the explosions as another tactic to reduce gas supply to Europe, and break the political will of the EU to maintain sanctions. According to CNN, US officials say these moves are retaliation for Western sanctions, which puts the West in "unchartered territory" when it comes to whether Europe will have enough gas to get through the winter. European countries have already begun rationing energy months before peak consumption beginning in December
Even Ukrainian president Volodymyr Zelensky has said, "this is an open gas war that Russia is waging against a united Europe – this is exactly how it should be perceived. And they don't care what will happen to the people, how they will suffer: from hunger due to blocking the ports or from winter cold and poverty... Or from the occupation. These are just different forms of terror."
To provide short-term relief to the energy-supply crisis, the EU has begun relying more on alternative sources of fossil fuels. Ironically, climate action has taken a backseat to fossil fuel based solutions to the energy crisis—one caused by fossil fuel dependency— creating a tragically ironic paradox. Sweden has fallen back to relying on an old oil-fired power plant as energy prices have skyrocketed. Germany, which received over 55 percent of its natural gas supply from Russia before the invasion, has resorted to reopening old coal-fired power plants previously closed to meet carbon-emissions targets. Italy and Algeria agreed to a €4 billion deal in July that will supply Italy with an extra 4 billion cubic meters of gas, adding to the 13.9 billion cubic meters of gas provided since the start of 2022. France is now reportedly seeking gas deals with Algeria as well. Liquified natural gas (LNG) infrastructure is on the rise as European nations are seeking gas shipped from all across the world. Germany is now working on constructing five new LNG import terminals, and the EU has also been in negotiations with Qatar for a long term LNG deal.
In July, European Commission President Ursula von der Leyen and Azerbaijan’s President Ilham Aliyev agreed to a deal which will send 20 billion cubic meters of natural gas to Europe each year. This number is not insignificant; it represents over 9 percent of the EU’s 2021 total gas consumption. While the deal is intended to reduce dependency on Russia for natural gas supplies, the European Commission undermines the intentions of Western sanctions. As detailed by Politico, the extraction infrastructure needed to make this new deal work is being provided by Lukoil (a Russian oil and gas company that is one of the three largest taxpayers in Russia). Lukoil is a company currently sanctioned by the US government. This means that the revenues gained by Lukoil in this deal will be funneled back to the Russian government. Unfortunately, it does not stop there. The Southern Gas Corridor (SGC) pipeline destined to transport the gas is operated by the Azerbaijan Gas Supply Company. Lukoil also has a 16 percent stake ownership in the company.
While the totality of these deals is concerning for most environmental groups and activists, Europe maintains that it will still meet longer term renewable energy targets. In fact, the EU Commission released their plan in May to address the energy crisis and overreliance on Russian fossil fuels. The plan, titled REPowerEU, states, “REPowerEU is about rapidly reducing our dependence on Russian fossil fuels by fast forwarding the clean transition and joining forces to achieve a more resilient energy system and a true Energy Union.” The plan aims to uphold requirements set in the European Green New Deal by achieving a reduction of 55 percent in net GHG emissions by 2030 and climate neutrality by 2050. The Commission does concede that the war changes the reality of how Europe will meet these goals, stating that the transition will “require targeted investments for security of supply in gas infrastructure and very limited changes to oil infrastructure,” while using existing coal capacities, nuclear power and domestic gas longer than expected. The recent investments in non-Russian fossil fuels can be better understood through this lens.
While these investments make logical sense in the short run, they further expose Europe’s overreliance on fossil fuels and the need to transition swiftly to a renewable energy economy. REPowerEU does outline a significant increase in renewable energy investments, stating that this transition necessitates an additional €210 billion into clean energies. These include solar, wind, heat-pumps, hydrogen, and the supply-chain infrastructure to make these energies more accessible. The Centre for Research on Energy and Clean Air states that “...19 European governments have accelerated their clean energy targets…These strengthened targets will result in a 30 percent reduction in fossil fuel use in the power sector by 2030, compared with energy plans in place in 2019.” For example, Germany, understanding the danger of their over-reliance, is planning on tripling renewable buildout by 2030 (from pre-invasion target). As Germany’s Climate and Economics Minister Robert Habeck states, “the climate crisis is taking on threatening dimensions. On the other hand, the invasion of Russia shows how important it is to phase out fossil fuels and consistently push ahead with the expansion of renewables.” Europe as a whole is planning on raising the proposed 40 percent renewable energy mix for 2030 to 45 percent (while also cutting overall consumption 13 percent).
While these new plans regarding an energy transition paint an optimistic outlook, Europe’s present-day energy reality is a harsh one. While energy targets often cite emissions or long-term economic statistics, the current energy emergency in Europe signals a geopolitical and national security disaster caused by an overreliance on fossil fuels. It must be understood that fossil fuels are funding Russia’s war invasion of Ukraine. To eliminate Ukraine as a competitor of oil and gas supplies is a prime reason for Putin’s invasion in the first place. Europeans pay nearly €100 billion per year for Russian fossil fuels. Since the start of the war, the EU has paid Russia over €90 billion for fossil fuels. This money is going directly into funding Russia’s war. In comparison, the EU has given just short of €3 billion euros to Ukraine – mostly in the form of military assistance, or one thirtieth of the energy payments going to Russia.
The Russian government is not the only beneficiary of Europe’s fossil fuel dependency. While Ukrainians are being killed by the thousands and households all over the world struggle with their energy bills and gas prices, fossil fuel corporations are raking in record profits. Exxon Mobil made $17.9 billion in Q2 of this year alone, over three times more than a year ago. Chevron’s profits have also tripled to $11.6 billion. Shell’s profits doubled from a year ago to $11.5 billion. BP reported bumper profits of over $9.3 billion.
These grotesque figures are raising concerns and frustrations within governments and from the public. Frank Pallone, Chair of the U.S. House Committee on Energy and Commerce, criticized these companies in a letter writing, “Your company is positioned to help alleviate Americans’ pain at the pump, but I am concerned that you are more focused on rewarding company executives and shareholders.” U.N. Secretary-General António Guterres asked governments to tax the oil companies’ and “use the funds to support the most vulnerable people through these difficult times.” The profits of oil and gas corporations at the expense of households all over the world is representative of the economic inequities fundamental to a fossil-fuel reliant global-capitalist economy.
Russia’s invasion of Ukraine is a symptom of a world utterly addicted to fossil fuels. Sooner than expected, Europe and the world are now suffering the consequences of this addiction: environmental destruction, economic inequality, and a war caused and funded by Putin’s thirst for ever more oil and gas revenues. It is time for Europe, and the rest of the world, to embark on a new path to a more just, sustainable, and peaceful future.
