The Russian invasion has been enhanced by leader Vladimir Putin’s control over the energy market. The only way for Europe and its allies to impose severe sanctions is to stop Russia’s fossil fuel dominance and boost the transition towards renewable energies.
On February 24th, the world woke up with the tragic news of the Russian invasion of Ukraine. Unfortunately, this event was very much anticipated in the previous months, due to Russia’s behavior in the energy market and the disposal of the army all along the Ukrainian borders. These two phenomena have a deep connection, being part of Putin’s plan to affirm his leadership.
The executive director of the International Energy Agency had already predicted this outcome, declaring more than a month ago that there was a strong link between Russia’s behavior in the gas market and the tension with Ukraine.
The rising demand for gas that emerged during the pandemic was countered by a slowdown of the Russian gas supply. As the European economy has been deeply damaged with rises for our energy bills, the Russian state gas company Gazprom – the world’s largest gas producer – has faced outstanding performance, recording a net income of 582bn rubles ($7.8bn) from July to September in 2021. Furthermore, the company declared that the lower exports were caused by Russia’s low gas storage combined with higher domestic demand.
However, the exports slowdown, the controversy over the Nord Stream 2 gas pipeline, and the disposal of the Russian army all over the Ukrainian borders seem too much of a coincidence. In fact, through the new pipeline, Russia could ship gas to Germany completely bypassing Ukraine. The head of Ukraine’s state energy firm Naftogaz, Yuriy Vitrenko, warned that by implementing the Nord Stream 2, Russia’s revenues from it would not be affected by a possible invasion.
About three months after these claims, Russia invaded Ukraine and Germany stopped the $11 billion pipeline project – a decision as financially damaging as necessary. However, it’s not enough.
It’s important to clarify that Russian dominance over European gas supply is not the cause or the scope of this war, but it’s a strong weapon that Putin is using to threaten Europe and its allies. Behind every sanction imposed to stop the invasion of Ukraine, there’s the risk of further reductions of the gas supply that would bring severe consequences.
In light of this, the urge to move towards renewable energies and reach the net-zero target is even stronger. Europe needs to limit Russia’s leverage over the EU economy since economic control equals political influence. In addition, Putin believes that his influence over the energy market is what makes Russia sanction-proofed, but this is not the case. Let’s recall that Russia earns billions of dollars from sales of oil products and gas. Sixty percent of Russia’s exports come from oil and gas, which also constitute forty percent of the Russian federal budget. Stopping Russian exports is our biggest weapon.
Renewable energies are the solution and not the cause, as someone claimed, to reduce the pressure of high gas prices. After his country halted the pipeline, German Chancellor Olaf Scholz called for an acceleration of renewable energy plans. Energy ministers from EU’s Member States had an emergency meeting on February 28th to discuss how to face possible energy supply shocks. In the discussion was included the boost of renewable energies, which are now more needed than ever.
If we were ever to find a silver lining in this tragic attack on international peace and stability, we could point out that the vulnerability of the fossil fuel market shred light to the urge of speeding up the transition process towards renewable energies. An urgency that was maybe not felt even during or after COP26, but is now clearer.