Vladimir Putin’s new cold war: Freeze Europe

[oil&gas]

Thomas L. Friedman
Sept 15, 2022

While some Russian soldiers in Ukraine are voting with their feet against Vladimir Putin’s shameful war, their hasty retreat doesn’t mean that Putin is surrendering. Last week, in fact, he opened a whole new front — on energy. Putin thinks he’s found a cold war that he can win. He’s going to try to literally freeze the European Union this winter by choking off supplies of Russian gas and oil to pressure the E.U. into abandoning Ukraine.

Putin’s Kremlin predecessors used frigid winters to defeat Napoleon and Hitler, and Putin clearly thinks it’s his ace in the hole to defeat Ukraine’s president, Volodymyr Zelenskyy, who told his people last week, “Russia is doing everything in 90 days of this winter to break the resistance of Ukraine, the resistance of Europe and the resistance of the world.” I wish I could say for certain that Putin will fail — that the Americans will outproduce him. And I wish I could write that Putin will regret his tactics, because they will eventually transform Russia from the energy czar of Europe to an energy colony of China — where Putin is now selling a lot of his oil at a deep discount to overcome his loss of Western markets. Yes, I wish I could write all of those things. But I can’t — not unless the U.S. and its Western allies stop living in a green fantasy world that says we can go from dirty fossil fuels to clean renewable energy by just flipping a switch.

I wish that were possible. This column has been devoted for 27 years to advocating clean energy and mitigating climate change. I’m still all in — all in — on those ends. But you can’t will the ends unless you’ve also willed the means. And we demonstrably have not done that! Despite all the wind and solar investments in the past five years, fossil fuels — oil, gas and coal — still accounted for 82 percent of total world primary energy use in 2021 (required for things like heating, transportation and electricity generation), down only three percentage points in those five years. In America alone in 2021, about 61 percent of electricity generation was from fossil fuels (primarily coal and natural gas) while about 19 percent was from nuclear energy and about 20 percent was from renewable energy sources.

In a world of growing, energy-hungry middle classes in Asia, Africa and Latin America, it takes huge amounts of new clean energy to make even a small dent in our overall energy mix. It’s not a matter of flipping a switch. We have a long transition ahead, and we will make it only if we urgently embrace smart, pragmatic thinking on energy policy, which in turn will lead to greater climate security and economic security.

Otherwise, Putin can still hurt Ukraine and the West badly. Before the Ukraine war started, Russia provided nearly 40 percent of the natural gas and half of the coal Europe used for heat and electricity. Last week, Russia announced it was suspending most gas supplies to Europe until Western sanctions on Russia are lifted. Putin has also vowed to cut off all oil shipments to Europe if the Western allies carry out their plan to limit what they will pay for Russian oil.

Without sufficient affordable alternative supplies of natural gas, The Financial Times reported, some factories in Europe have had to shut down, “unable to pay the cost of fuel.” Energy bills — up 400 percent in some European countries — “are pushing consumers to near poverty.” For some the choice this winter could be heat or eat. This is forcing their governments to offer massive subsidies, distorting their budgets, in hopes of staving off populist backlashes and pressures to get Ukraine to surrender to Putin — and some are also going back to burning coal.

If we want to get oil and gas prices down to reasonably low levels to power the U.S. economy and, at the same time, help our European allies escape the vice grip of Russia while we all also accelerate clean energy production — call it our “Energy Triad” — we need that transition plan that balances climate security, energy security and economic security.

President Biden just gave a huge boost to U.S. clean energy output with his climate bill, which also encourages cleaner gas and oil production through smart incentives to curb methane leakage by oil and gas producers and by incentivising them to invest more in carbon-capture technologies. But the most important factor for quickly expanding our exploitation of oil, gas, solar, wind, geothermal, hydro or nuclear energy is giving the companies that pursue them (and the banks that fund them) the regulatory certainty that if they invest billions, the government will help them to quickly build the transmission lines and pipelines to get their energy to market. Greens love solar panels but hate transmission lines. Good luck saving the planet with that approach.

Philip Anschutz, the conservative billionaire who made a fortune drilling for oil, has been trying to build a power line to connect his giant wind farm in Wyoming with his proposed market in Las Vegas. Planning for that line began 17 years ago, and only this past December did Anschutz finally reach “an agreement with a Colorado ranch to traverse its land” to get his clean electrons to market, Bloomberg reported.

“Many of the best places to develop clean power are far-flung deserts and plains,” the story added, “but stringing power lines to reach them can take a decade or more because of approvals needed from state agencies, the federal government and private landowners. The delays are one of the biggest threats to U.S. President Joe Biden’s ambitions to rid power grids of fossil fuels.” To win the critical support of Senator Joe Manchin for Biden’s climate package, Senate Democratic leaders, led by Chuck Schumer, agreed to a side deal — to back a bill that would streamline, but not eliminate, environmental and other regulatory reviews that often bog down the permitting of transmission lines and pipelines needed to make gas, oil, solar and wind projects economically viable. If our main route to decarbonisation is going to be through electrification of vehicles and power generation by renewables, we will need more transmission pathways to move more electricity around — and we’ll need more natural gas backup systems for when the sun doesn’t shine and the wind doesn’t blow.

I can’t repeat this enough: U.S. energy policy today has to be the arsenal of democracy to defeat petro-Putinism in Europe, by providing desperately needed oil and gas to our allies at reasonable prices so that Putin cannot blackmail them. It has to be the engine of economic growth that provides the cleanest and most affordable fossil fuel energy as we transition to a low-carbon economy. And it has to be the vanguard for scaling renewables to get the world to that low-carbon future as fast as we can. Any policy that doesn’t maximise all three will leave us less healthy, less prosperous and less secure.

Vladimir Putin’s new cold war: Freeze Europe

For some the choice this winter could be heat or eat. This is forcing governments to offer subsidies, distort budgets, in hopes of staving off populist backlashes and pressures to get Ukraine to...

www.dtnext.in

 

[mandrill]

 

[Frankfooter]

Thomas L. Friedman
Sept 15, 2022

Vladimir Putin’s new cold war: Freeze Europe

For some the choice this winter could be heat or eat. This is forcing governments to offer subsidies, distort budgets, in hopes of staving off populist backlashes and pressures to get Ukraine to...

www.dtnext.in

You make compelling arguments to get off of oil entirely so that oil & gas despots like Putin and MBS can't control other countries economies.

By the way, congrats on starting 5 of 15 tipping points that will totally fuck the world's climate.

 

[oil&gas]

 

[basketcase]

Seems Europe isn't falling for his blackmail attempt. And judging by stories about Putin's falling 'popularity', he'll be lucky if he ends up freezing his ass off in a Siberian gulag.

 

[oil&gas]

At this point it is suicidal for political leaders in most European
nations to give in to Putin's blackmail. Weather in the coming
winter is going to be a decisive factor in the stability of
societies in Europe.

 

[glamphotographer]

Putin is more paranoid about staying away from windows now.

 

[jsanchez]

Putin is more paranoid about staying away from windows now.

 

[jcpro]

Hope it's one of those.extra cold European winter like we used to have in the 70s. They need to be shown the uselessness of their political class and soon.

 

[james t kirk]

Well Canada just told the Germans to fuck off when it comes to us selling them liquified natural gas. Scholz must just be thinking "what a fucking moron Canada has elected. I thought these Canadians were smarter than that.". Scholz comes to Canada looking for us to help save his country, even a continent from a disaster and we turn him down. It's a tragedy and I'm actually embarrassed to be a Canadian. We are supposed to be the guys who help those in need.

The dumbest leader in the western world figures its better to help Putin win a war than it is to help our allies because it involves burning natural gas. I can't begin to even put into words my complete disgust for Justin Trudeau.

 

[sniper5]

Sanctioning your energy suppliers is a bad idea.

 

[Insidious Von]

I don't think Trudeau flatly rejected Scholz request for LNG, the infrastructure isn't there.

First you would need a pipeline to deliver natural gas to the East Coast. Building it through Shield country would cost $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$, guess which Province's taxes would be going up substantially to fund such a project. Second shipping to Europe by sea would again cost $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$, our taxes would go up to at least %35 to fund such a massive project. It would also be unclear if we would see any returns, it could become a gigantic money pit.

 

[Insidious Von]

German Foreign Minister Annalena Baerbock and Madame Joly.

 

[Insidious Von]

Of course Putin still has another ace up his sleeve.

 

[Frankfooter]

Of course Putin still has another ace up his sleeve.

Totally, and apparently MAGA can still fundraise while in jail.

MAGA rioter attempts to recruit extremists while incarcerated

Timothy Hale-Cusanelli was convicted in May on felony obstruction and four misdemeanors for his Jan.6 involvement

www.salon.com

 

[oil&gas]

Since when did banks produce energy?

It takes a special kind of cynical self-interest to make people pay twice for something they already cannot afford, while claiming you are doing them a favour. This though, is the energy price relief package announced by Liz Truss yesterday. The package plays that old political card of being not quite as bad as it might otherwise have been, while still being a lot worse than it was.

Politically, the announcement confirms a great deal of what we suspected. In recent years there has been a growing belief that the Versailles-on-Thames technocracy pulls the strings and that incoming prime ministers are simply given their script on arrival in 10 Downing Street – this is born out by an energy package – drawn up by technocrats over the last six weeks – which is wholly at odds with Truss’s policy announcements during her leadership campaign. The announcement also demonstrates that despite her third-rate tribute act, Truss is no Margaret Thatcher, nor even the economic liberal that she claims… because a true libertarian – and likely Saint Margaret herself – would have allowed the energy companies to go bust rather than ignore the inflationary impact of state intervention… so now we know.

The package itself involves capping the average energy bill at £2,500 for the next two years, rather than the immediate rise to £3,549 and the anticipated rise above £6,000 in 2023. There is also a reduction on the regressive standing charge for electricity as the various green levies are removed. A reduction in VAT is also expected in future, and the national £400 bill reduction, together with the £650 for people on low incomes remains and may be extended next year.

So far so good, if you are a glass half-full type. But then there’s the bit when you get to pay for it twice. Unlike the opposition proposal to use a windfall tax on energy company profits to fund or at least to part-fund a relief package, the government is looking to borrow some £150bn. The government claims that this will be disinflationary because the reduction on household energy bills will outweigh any increases in spending by those at the top end of the income ladder who will now have an additional £1,000 in discretionary spending than would otherwise have been the case.

The package is though, an inflationary time bomb for two reasons. The first is that interest rate rises in the USA, along with a global dollar shortage are already hammering the value of the pound – which is at its lowest level since 1985. Further government borrowing is likely to weaken the currency even further, causing the price of imports into the UK to skyrocket unless the Bank of England uses economy-crushing interest rate rises in an attempt to shore-up the pound. This is merely the froth on the top of the inflationary beer though, because the real failure in the energy package is that it does nothing to address the underlying reason why energy prices are so high… shortages!

The political class will try to convince you that it is all the fault of “madman Putin” for shutting down the gas pipelines to Europe. This though, ignores the way in which the political class left us so dependent on Russian gas in the first place. And in any case, it wasn’t Putin who disconnected Europe from the gas it needs… that was an EU technocracy who wrongly believed that without sales to Europe, the Russian economy would collapse, and the Russian people would rise up to overthrow Putin. And while it is clear that Russia is going to leverage gas shortages this winter, even the story about Putin switching off the gas is mendacious given that Canadian and German sanctions have prevented the return of vital pumping turbines.

The true causes of our energy predicament go much deeper. At one level, they are the consequence of the same European technocracy taking seriously the plaintive whining of a Swedish teenager who dropped out of school without learning enough about physics and engineering to understand that the global energy system is not plug and play, and that firm fossil fuel and nuclear energy cannot be replaced by diffuse and intermittent wind and solar unless you are prepared to accept the standard of living of Britain’s dark-age Anglo-Saxons. For most of us until recently, “going green” meant little more than recycling and swapping plastic straws for paper ones. But for the technocracy, it meant the wholesale destruction of the energy system before anyone had figured out how to run an advanced global economy without the fossil fuel energy which – even today – powers some 85 percent of it.

Coal plants were demolished. Alternative generation – such as nuclear in the UK – went unbuilt. Under Merkel, Germany went even further, closing down perfectly good, functioning nuclear power stations on the spurious grounds that Germany might be at risk of a Pacific tsunami. Non-renewable renewable energy-harvesting technologies (NRREHTs) were added at breakneck speed in far greater numbers than was safe within national grids which were not designed to cope with intermittency and within which no viable energy storage options existed. And in practice, gas power stations proved to be the only mechanism for balancing the intermittent output.

This, of course, brings us to an even deeper facet of our predicament. When vast gas deposits were discovered in the North Sea in the 1960s, European governments went on a drilling spree, treating a precious finite resource as if it was forever. Britons of a certain age will remember the huge national effort to convert the UK’s gas network and gas appliances from town gas (coal) to natural gas. For Britain, it was the beginning of the “curse of oil,” as the revenues from North Sea exports allowed governments to avoid some hard decisions about the future of a small island in a big world.

There were far fewer of us in those days. Car ownership was only then becoming common following the development of a series of affordable small cars such as the iconic Mini. Most houses had just a few electrical wall sockets simply because there were so few electrical gadgets to plug into them. Colour television had only just been developed and was still a luxury for the well to do, while most people still rented old-fashioned valve black and white sets. And since there were just two channels – neither offering much worth watching – TV sets were more an ornament than the axis around which domestic life came to revolve.

Abundant energy – particularly oil and gas – changed everything. It allowed populations to expand without forcing an equivalent decline in living standards. Consumption expanded too. As vast quantities of oil arrived on British shores in the 1980s, car ownership accelerated. Two-car households became commonplace and commuting over hundreds of miles in search of better-paid work became an accepted practice – even today, unemployed people are expected to take work up to 90 minutes travelling time from their homes. The offshoring of industry to the Far East, corresponding with the “digital revolution,” resulted in a flood of cheap electronic goods from laptop computers to microwave ovens and from smartphones to electric toothbrushes… all of it powered with energy which, if not quite too cheap to meter, was easily affordable on the back of the income from North Sea exports and City of London money laundering.

All good parties come to an end. This one was no different. In 1999, UK North Sea oil and gas production peaked. Norway, with its much smaller population and its widespread hydroelectric power still had reserves. But even these would be eaten away as exports to Europe expanded to fill the growing void of declining UK output. By then though, the neoliberals had borrowed vast quantities of unrepayable debt into existence on the back of oil and gas income which was fast disappearing. The UK became a net importer of oil in 2004 and of gas the following year. Corresponding, however, with the global peak of conventional oil production and the global dollar shortages which created the 2008 crash, Britain avoided further consideration of just how vulnerable its economy had become.

Germany, at least on paper, remained an economic powerhouse via the manipulation of the euro – allowing the poorer economies of eastern and southern Europe to hold the value down in order to make German exports far cheaper than would have been possible under the old Deutschmark. But as with the UK, the illusion of prosperity was based upon ever-growing quantities of energy from sources which had yet to be identified.

Turning to Russia as that country emerged from its post-collapse depression made sense given Russia’s stated desire for closer integration with Europe. Every one euro paid for imported Russian gas generated ten euros of German exports. And so, the drive to build new gas pipelines to connect Europe to the West Siberian gas fields became unstoppable… even if it meant leaving Europe increasingly vulnerable to interrupted supply – something that the closure of coal and nuclear plants and the increasing use of intermittent wind exacerbated.

What Europeans could never accept was that the brief couple of decades of copious energy consumption were an anomaly. Faith in the religion of progress blinded us to the reality that, without some alternative to our depleting fossil fuels, European living standards were bound to collapse. Physicists and engineers have long warned the politicians and technocrats that NRREHTs could never replace the energy from fossil fuels. But there was – and is – an awful lot of money to be made from the deployment of NRREHTs… mostly by the same energy companies that sold us oil and gas.

And so, we are where we are. We have insufficient energy to power our indulgent lifestyles, and we are going to have to power down in the worst possible way, with those at the bottom literally starving and freezing even as those at the top attempt to cling onto their ill-gotten gains. By using the money trick of borrowing to lower bills – in effect, bailing out the energy companies – the Truss government and the EU technocracy have guaranteed blackouts this winter and, indeed, for several winters to come. Energy rationing might be a fairer way of managing this. But given that the official rationing plans were drawn up in the 1970s and have not been updated to factor in the impact of intermittency, they are likely to be about as good as the official pandemic plans turned out to be.

Beyond the immediate hardship, two equally impossible futures are vying for policy-makers’ attention. The first is a doubling down on the energy policies which got us here – build even more intermittent NRREHTs in the hope that someone will finally discover how to make them power an advanced economy. The second is a kind of rose-tinted return to past glories in which we dig up coal that has already been burned and frack shale deposits for gas which doesn’t exist in order to keep the party going for another decade or so while clever people somewhere else figure out what to do next. But neither of these is going to happen overnight. Indeed, with the economies of Europe rapidly imploding – with the UK leading the charge – both may soon be beyond us anyway. Which, of course, brings us to the option we are going to take even though the political class dare not mention it – we are going to have to make do with less. As John Michael Greer reminded us this week:

“Those of my readers who remember the energy crises of the 1970s, as I do, may be forgiven a certain sense of déjà vu. Back then it was a war between Israel and an alliance of Arab nations that caused a major fossil fuel supplier to yank their product from the market, sending prices skyrocketing. The reactions of the affected countries, however, is much the same: confident assurances that such things can’t possibly have a significant impact on the world’s wealthy nations, followed by blind panic and ineffective flailing once the impact shows up anyway. Plenty of ordinary people have already hit the second stage, while the politicians and the chattering classes of the world’s rich countries are still mired in the first…

“When governments fail to do anything useful, as so often happens, individuals, families, and communities have to step up to the plate themselves. That was one of the lessons of the energy crises of the 1970s…

“Let’s start with the most crucial lesson, the thing that should be written in letters of fire in your brain right at the outset: it is always easier and cheaper to conserve the energy you have than to bring in more energy to replace it. ‘Weatherize before you solarize!’ was a slogan we heard a lot back in the day, but the rule can be extended much more broadly. Conservation is the key to getting by in a world where energy is expensive. That’s the thing the green energy revolution we all heard so much about never grasped, and that’s why it failed. Learn to squeeze each erg of energy until it yelps, and you can thrive.”

It would have been preferrable to have done this with government support. But there again, the technocracy was never going to support something which would lead to the collapse of their profiteering friends in the energy industry. It is also what the high market price of energy should encourage us to do – the correct response to rising prices is less consumption, not subsidies to the energy companies dressed up as government support to households and businesses. That £2,500 price cap is not a target to be reached. And with the kind of deep energy saving that John Michael Greer writes about, even at today’s prices it is possible to get by on just ten percent of that.

It goes without saying that if we all engage in conservation, profiteering energy companies will be bankrupted soon enough – although without cheap and abundant reserves, that was going to happen anyway. Nevertheless, we are increasingly forced to make hard decisions which would have been so much easier if we had made them half a century ago. And no amount of borrowing to bail out energy companies is going to save the day. Far from saving us from an energy crisis, the Truss plan accelerates and deepens it… and there will be no going back.

Since when did banks produce energy?

It takes a special kind of cynical self-interest to make people pay twice for something they already cannot afford, while claiming you are doing them a favour. This though, is the energy price relief package announced by Liz Truss yesterday. The package plays that old political card of being not...

consciousnessofsheep.co.uk

 

[Frankfooter]

Since when did banks produce energy?

It takes a special kind of cynical self-interest to make people pay twice for something they already cannot afford, while claiming you are doing them a favour. This though, is the energy price relief package announced by Liz Truss yesterday. The package plays that old political card of being not quite as bad as it might otherwise have been, while still being a lot worse than it was.

Oil & gas subsidies are 6.8% of the world's GDP.

Fossil Fuel Subsidies

Subsidies are intended to protect consumers by keeping prices low, but they come at a high cost. Subsidies have sizable fiscal costs (leading to higher taxes/borrowing or lower spending), promote inefficient allocation of an economy’s resources (hindering growth), encourage pollution...

www.imf.org