World Russia and Europe Go to War on Energy | Opinion

15:11  03 august  2022
15:11  03 august  2022 Source:   newsweek.com

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  Neither Moscow nor Kyiv can control Ukraine's skies. These are the jets they're using to fight the air war. As of late July, observers have identified 36 Russian aircraft and 35 Ukrainian aircraft as lost, but the totals for both sides are likely higher.Throughout the buildup to Russia's invasion of Ukraine, NATO countries, including the US, insisted they would not send troops to the region amid concern that the presence of their personnel on the ground would lead to a dangerous escalation of the conflict.

When Gazprom, the Russian energy giant, announced this week that it would reduce natural gas shipments through the Nord Stream 1 pipeline to 20 percent of capacity, the reaction in Europe was swift. Gazprom's contention that a faulty Siemens Energy-manufactured turbine was responsible for the decreased flow was immediately rejected by the German economy ministry as insufficient.

Russian President Vladimir Putin speaks during the Powerful Ideas For New Times Forum on July 20, 2022, in Moscow, Russia. © Getty Images Russian President Vladimir Putin speaks during the Powerful Ideas For New Times Forum on July 20, 2022, in Moscow, Russia.

Europe, which was already facing the prospect of gas shortages this winter, is now scrambling to mitigate the impact before the situation reaches a point where gas rationing is necessary. The European Union (EU) is striking deals with non-Russian suppliers and seeking to impose gas consumption quotas on member states. Italy signed an agreement with Algeria on July 18 to boost natural gas imports from the North African nation, and France recently signaled deeper energy cooperation with the United Arab Emirates. Azerbaijan is projected to double gas exports to the EU by 2027, and the bloc is also hoping Nigeria can become more involved as an energy supplier.

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Even so, it's an open question whether the EU has enough time to fill their gas storage capacity before winter sets in. European politicians and bureaucrats look a bit desperate. The European political elite, meanwhile, is convinced they wouldn't be in this situation if Russian President Vladimir Putin wasn't tinkering with gas flows in an act of sinister manipulation. "Russia is blackmailing us. Russia is using energy as a weapon," European Commission President Ursula von der Leyen said on July 20. A U.S. National Security Council spokesperson wasn't quite as harsh, but was nevertheless adamant that Putin was purposely destabilizing energy markets to undermine Europe's solidarity and support on behalf of Ukraine.

Europe is right to blame Russia for keeping natural gas at a low ebb. But Moscow's own actions are an inevitable byproduct of years in which Europe, and Germany in particular, leaned on Russia as its main source of natural gas. According to the International Energy Agency, the EU imported about 45 percent of its total gas imports from Russia. At 55 percent, Germany's imports were even higher (although that figure has since decreased to 26 percent, a remarkable climb-down in a short period of time). The Czech Republic, Hungary, and Austria are also highly dependent on Russian gas supplies.

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All of this dependency naturally provides Moscow with significant leverage—and the Russians aren't shy about using it if necessary. Russia has already cut gas supplies to multiple European countries during the spring and summer, including but not limited to Poland, Slovakia, the Netherlands, France, and Italy. Reducing gas to Europe, which boosts the price and results in higher returns, is viewed by the Russians as a smarter play than eliminating it entirely. But this isn't much comfort for the Europeans, who can't afford to bet on Putin maintaining or increasing the current export rates. A full gas cut-off is considered so likely that Germany may temporarily reverse its decision to phase out nuclear power.

There is something worrying, if not disturbing, about a strongman exploiting his country's status as the world's largest natural gas exporter to make Europe sweat. While price fluctuations in the oil and gas industry are as humid days in the summertime, there is a general assumption that the market forces of supply and demand will determine how valuable the commodity is on any given day. The notion that states blessed with an abundance of oil and gas will deliberately manipulate supply in order to cause a disruption feels almost as dirty as the fossil fuels themselves.

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Unfortunately, power, self-interest, and leverage are more important factors in the real world than morals and platitudes. Europe is right to point at Putin as the man who is culpable for creating an energy crisis. But while it may be impolitic to say so, Europe should also be cursing itself for giving Putin the ammunition he needed to wield the energy sword.

Video: Europe has to continue receiving gas from Russia till it finds alternatives: Financial services firm (CNBC)

For too long, there was an assumption in much of Europe that Russia could be counted on as a reliable supplier, even if there were substantial policy differences in other areas. That assumption turned out to be a mistake; even worse, it was childishly naïve and showed a complete misunderstanding of how states conduct themselves in an international system that is both competitive and anarchic. Because natural resource exports were so critical to Russia's revenue, European leaders seemed to think Putin would silo the energy sphere from geopolitics. What Putin did instead was treat energy as an extension of geopolitics.

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How this play will turn out is anyone's guess. In the short-term, European governments will feel a tight squeeze from less supply and higher natural gas prices, which have increased by 66 percent this month. For European consumers, this could translate into voluntary, and possibly mandatory, gas reduction targets. In the most extreme case, natural gas levels could get so low that factories will be forced to cut staff and downsize operations, causing even more problems in the supply chain.

Yet over the long-term, Putin's gas gambit will only accelerate Europe's campaign to diversify suppliers. Even if Russia does turn the taps back on, it will no longer be seen as a dependable source. Countries that have sufficient liquified natural gas (LNG) terminals along the coast, like France, Spain, and Italy, will purchase far more from the United States, Qatar, and Australia. Countries that don't have any LNG terminals, like Germany, will speed up plans to construct them. And while Russia could always export more natural gas to Asia, it will likely take years before the infrastructure is in place to fully replace the market it lost in Europe.

Daniel R. DePetris is a fellow at Defense Priorities and a foreign affairs columnist at Newsweek.

The views expressed in this article are the writer's own.

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Russian reporter put under house arrest over war criticism .
A court in Russia on Thursday ordered a former state TV journalist placed under house arrest for nearly two months pending an investigation and potential trial on charges of spreading false information about Russia’s armed forces. Marina Ovsyannikova was charged over a street protest last month, when she held up a banner that said, “(Russian President Vladimir) Putin is a killer, his soldiers are fascists. 352 children have been killed (in Ukraine).

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