Jan 25th 2022

Europe is dependent on Russian Gas during Ukraine Crisis because it didn’t Ramp up Renewables Faster

by Juan Cole

Juan Cole is the Richard P. Mitchell Professor of History and the director of the Center for South Asian Studies at the University of Michigan. His latest book, Engaging the Muslim World, is just out in a revised paperback edition from Palgrave Macmillan. He runs the Informed Commentwebsite.

Ann Arbor (Informed Comment) – The growing conflict between the United States and the Russian Federation over the Ukraine has taken an increasingly dark turn, with press reports that US embassy personnel and dependents are being pulled out of Kiev and that President Biden is considering sending US troops to Ukraine’s neighbors.

The conflict has an energy dimension, since Europe depends on Russia for about 35 percent of its natural gas. Natural gas prices have quadrupled this winter, making it expensive for people to heat their homes already. If Russia boycotts Europe over the Ukraine, it will create a massive energy crisis on the continent and make it difficult for US allies to be completely supportive of the Biden line that Russia must cease meddling in Ukraine affairs or trying to detach pieces of it. The admiral who headed the German navy just had to resign because his remarks became public, that Russia doesn’t want bits of the Ukraine, it just wants the respect owed a great power. Observers worried that a lot of Germans high in the government might think that way and decline to back Washington’s hard line.

I was watching Farid Zakaria’s GPS 360 on Sunday, and his guest, the distinguished journalist and historian Ann Applebaum asserted that Angela Merkel had made a major error in closing down Germany’s nuclear plants. Her point was that in the absence of nuclear power, Germany became more dependent on Russian natural gas for heating and electricity.

I respectfully disagree with Applebaum’s assertion. Nuclear only provided 11.9% of Germany’s power production as of 2021. In contrast, 40.1% of its power comes from renewables. Natural gas is only at 15.3%. Clean Energy Wire provides this nice chart:

It seems obvious to me that Chancellor Merkel’s mistake was not at all in closing the nuclear plants. Those plants were aged and had to be closed for safety reasons. Merkel correctly took the lesson from Japan’s Fukushima catastrophe in 2011 that this technology is simply not human-friendly or reliable. New plants could have been built, but nuclear plants are extremely expensive and take a very long time to build, and their electricity costs 15.5 cents a kilowatt hour. They produce toxic radioactive waste that will remain radioactive for a very long time and for which no good storage options exist. And they sometimes blow up or come near melting down.

Article continues after bonus video
Powerless Europe? Soaring prices expose EU’s energy dependence • FRANCE 24 English

 

If what you wanted was energy independence for Europe on the off chance that Russia’s gas might become a chess piece in geopolitics, which is actually an odd thing to want, since Europe never had it for the entire Cold War, then Merkel’s error is obviously that she did not do what Scotland did, and go for 100 percent renewable power by 2020. That would be a harsh and unjustified criticism, since Merkel did more than any other leader in the G7 to push for green energy and to address the climate emergency. But even Merkel herself, as she looked back on her career last September, recognized that the pace of installation of renewables would have to be vastly accelerated to avoid a climate disaster. The unprecedented flooding last summer helped her come to this conclusion.

She did not go bigger into renewables in part because she ran up against the coal industry and workers. Coal is still 28 percent of Germany’s power production and there have been lots of equivalents of Joe Manchin on the German political scene jumping up and down and screaming about the unfairness of disadvantaging German coal. It is mined in the country and directly employs 25,000 people, which is like 75,000 in US terms.

As it is, Germany has made strides in getting off coal. Coal provided half of power production in 2000, and is now down to about a little over a quarter. And Germany has done more to put in renewables, with its “Energiewende” or Energy Switch, than any other large industrialized nation. The new Social Democratic government, which is in coalition with the Greens, plans to put enormous amounts of new renewables in every year until 2030, projecting that by that date, 80 percent of Germany’s power will come from renewables.

In contrast, the US only gets about 20 percent of its electricity from renewables and has slacked off majorly in this area compared to Germany and China, because of the influence of Big Oil and initially of Big Coal. The only reason that the US itself is not more dependent on imported natural gas (as it was only a decade ago, bringing a lot in from Canada) is that its energy industries have gone in for hydraulic fracturing in a big way. This is an earth-killing technology, not only highly polluting in itself but also a source of massive methane leaks, and the natural gas itself, though better than coal, is also a greenhouse gas that is cooking the planet.

So Germany is dependent for some of its natural gas on Russia not because it closed down old, dangerous nuclear plants but because it did not build out its renewables even faster than it did. Also, even though Germany’s dependence on Russian gas may be an annoyance to Washington in January of 2021, it actually would have been better if all coal had been replaced by natural gas by now, since it has half the carbon dioxide emissions as coal.

And despite what K Street and the Pentagon think, saving the planet is more important than Washington’s sphere of influence politics with Russia.

Washington has been trying to find a substitute for Russian natural gas in shipped Liquid Natural Gas (LNG) from other countries. I wrote to an email list I’m on, however:

  • Whatever the solution might be to a Russia gas interruption to Europe, I don’t think it is LNG in the short term.

     

    The US government met with gas majors recently and they said the market is tight & they can’t replace Russia in Europe

    Qatar is increasing production substantially. But it will take a while, and 10- year deals are already signed with China via Shell. Shifting things around is not easy given long term contracts

    The US LNG export capacity will increase this year but that expectation is already baked into the market. It cannot come close to replacing Russian supply this year

    As for Germany, if things got dire they would just turn back on the coal plants and take the reputational hit. The nuclear closure was domestic green politics for SPD coalition gov’t purposes and not done with an eye to grand strategy.

    If the crisis can wait four years, big increases in wind and solar power will replace most NatGas.

    The IEA site reports that, “The agency says that between 2020 and 2026, renewables will grow by another 60 percent to over 4,800 gigawatts, which is roughly the size of the capacity of all fossil fuel and nuclear [electricity] power plants combined. Over the next five years, renewables will capture 95 percent of the growth in the electricity sector.”

 

Please click here for the author's, Juan Cole's, own web site, Informed Comment.

Browse articles by author

More Current Affairs

Jan 14th 2023
EXTRACT: "On balance, then, the events in and around Soledar over the past week illustrate that no matter the outcome of the current fighting, this is not a turning point. It’s another strong indication that the war is likely going to be long and costly."
Jan 14th 2023
EXTRACTS: "Russian President Vladimir Putin has long regarded the collapse of the Soviet Union as a “geopolitical catastrophe.” The invasion of Ukraine, now approaching its one-year anniversary, could be seen as the culmination of his years-long quest to restore the Soviet empire. ..... "With Russia’s economy straining under Western sanctions, some of the country’s leading economists and mathematicians are advocating a return to the days of five-year plans and quantitative production targets." .... "The logical endpoint of a planned economy today is the same as it was then: mass expropriation. Stalin’s collectivization of Soviet agriculture in the late 1920s and early 1930s led to millions of deaths, and the post-communist 'shock therapy' of privatization resulted in the proliferation of 'raiders' and the creation of a new class of oligarchs. Now, enthralled by imperial nostalgia, Russia may be about to embark on a new violent wave of expropriation and redistribution."
Jan 11th 2023
EXTRACT: "These developments suggest that Indian economist Amartya Sen was correct when he famously argued in 1983 that famines are caused not only by a shortage of food but also by a lack of information and political accountability. For example, the Bengal famine of 1943, India’s worst, happened under imperial British rule. After India gained independence, the country’s free press and democratic government, while flawed, prevented similar catastrophes. Sen’s thesis has since been hailed as a ringing endorsement of democracy. While some critics have noted that elected governments can also cause considerable harm, including widespread hunger, Sen points out that no famine has 'ever taken place in a functioning democracy.' --- China’s system of one-party, and increasingly one-man, rule is couched in Communist or nationalist jargon, but is rooted in fascist theory. The German jurist Carl Schmitt, who justified Adolf Hitler’s right to wield total power, coined the term “decisionism” to describe a system in which the validity of policies and laws is not determined by their content but by an omnipotent leader’s will. In other words, Hitler’s will was the law."
Dec 29th 2022
EXTRACTS: "On August 1, 1991, a little more than three weeks before Ukraine declared independence from the Soviet Union, US President George H.W. Bush arrived in Kyiv to discourage Ukrainians from doing it. In his notorious 'Chicken Kiev' speech in the Ukrainian parliament, Bush lectured the stunned MPs that independence was a recipe for 'suicidal nationalism', 'ethnic hatred', and 'Local despotism.' ----- ....the West’s reluctance to respect Ukraine’s desire for sovereignty was a bad omen, revealing a mindset among US and European leaders that paved the way to Russia’s full-scale invasion in February. ----- .... Western observers, ranging from Noam Chomsky to Henry Kissinger, blame the West for Russian President Vladimir Putin’s decision to invade, or have urged Western leaders to provide Putin a diplomatic off-ramp by compelling Ukraine to give up territory. Policymakers, too, seem to view Ukraine’s self-defense as a bigger problem than Russia’s genocidal aggression. ----- ..... despite the massive material and military support the West has provided to Ukraine, the fateful logic of appeasement lingers, because many Western leaders fear the consequences of Russia’s defeat more than the prospect of a defeated Ukraine. ----- This war is about the survival of Ukraine and the Ukrainian people. In the words of the Israeli leader Golda Meir, born in Kyiv, 'They say we must be dead. And we say we want to be alive. Between life and death, I don’t know of a compromise.' "
Dec 29th 2022
EXTRACT: "China’s flexible, blended, increasingly dynamic private sector could do all that and more. ----- Then came Xi Jinping. "
Dec 29th 2022
EXTRACTS: "For a few years in the late 2010s, it seemed to be only a matter of time before China would replace the US as the world’s largest economy and overwhelmingly dominant technological superpower. Then came the COVID-19 outbreak in Wuhan in late 2019. " ---- "How could China’s seemingly all-powerful autocrat understand so little about the social contract on which his power rests? For all its difficulties, liberal democracy – with its transparency and self-imposed limits – has once again proved more efficient and resilient than autocracy. Accountability to the people and the rule of law is not a weakness; it is a decisive source of strength. Where Xi sees a cacophony of clashing opinions and subversive free expression, the West sees a flexible and self-correcting form of collective intelligence. The results speak for themselves."
Dec 12th 2022
EXTRACTS: "Next time you’re in Ukraine’s capital, Kyiv, don’t bother looking for Dostoevsky Street. It’s been renamed: it’s now Andy Warhol Street. ..... because many Ukrainians regard Andy as Ukrainian. Was he? The evidence is mixed." ---- "Warhol remained a committed Greek Catholic all his life. He regularly prayed, both at home and in church, and frequently attended Sunday Mass. His bedside table contained a crucifix, a Christ statuette, and a prayer book. After he died on February 22, 1987, he was buried in St. John the Divine Byzantine Catholic Cemetery, some twenty miles south of Pittsburgh, in a simple grave next to his parents." ---- "When it comes to objective cultural affiliation or subjective ethnic identification, the United States—with its diverse Slavic heritages—has the greatest claim on Warhol and his art."
Dec 12th 2022
EXTRACT: "Cellular agriculture provides an alternative, and could be one of this century’s most promising technological advancements. Sometimes called “lab-grown food”, the process involves growing animal products from real animal cells, rather than growing actual animals. If growing meat or milk from animal cells sounds strange or icky to you, let’s put this into perspective. Imagine a brewery or cheese factory: a sterile facility filled with metal vats, producing large volumes of beer or cheese, and using a variety of technologies to mix, ferment, clean and monitor the process. Swap the barley or milk for animal cells and this same facility becomes a sustainable and efficient producer of dairy or meat products."
Dec 5th 2022
EXTRACT: "After a decade of unconstrained growth – when it seemed that a new billionaire was minted every day – the tech industry has finally hit a rough patch. Elon Musk’s erratic behavior following his takeover of Twitter has left the financially leveraged platform in a precarious state. The crypto exchange FTX’s sudden implosion has vaporized a business that was recently valued at $32 billion, taking many other crypto firms with it. Meta (Facebook) is laying off 11,000 people, 13% of its workforce, and Amazon is shedding 10,000. What are we supposed to make of these setbacks? Are they isolated incidents, or signs of structural change?"
Dec 3rd 2022
EXTRACT: "Just looking at explicit debts, the figures are staggering. Globally, total private- and public-sector debt as a share of GDP rose from 200% in 1999 to 350% in 2021. The ratio is now 420% across advanced economies, and 330% in China. In the United States, it is 420%, which is higher than during the Great Depression and after World War II."
Dec 3rd 2022
EXTRACT: "The Conservative leadership must stand up to the party’s extremists, and it must do so sooner rather than later. If moderates cannot defeat the hardliners by the next election, and the outcome turns out to be as bad for the Tories as recent polls suggest, they will find they have the same fight on their hands in opposition. --- Conservatives must never underestimate the importance of their moderate supporters. If the Party continues to disregard centrists whenever the Brexiteer right stamps its feet, it may find itself out of power for a long time to come."
Nov 24th 2022
EXTRACT: "....young voters did reach the polls they voted overwhelmingly for Democrat candidates across the country. According to reports, 63% of 18- to 29- year olds voted Democrat and 35% voted Republican in the House of Representatives elections. Voters between 30 and 44 split their vote between the two parties, while older voters tended to vote Republican."
Nov 24th 2022
Nouriel Roubini: "Central banks are in both a stagflation trap and a debt trap. Amid negative aggregate supply shocks that reduce growth and increase inflation, they are damned if they do and damned if they don’t. If they increase interest rates enough to bring inflation down to 2%, they will cause a severe economic hard landing. And if they don’t – attempting instead to protect growth and jobs – they will be left increasingly far behind the curve, leading to a de-anchoring of inflation expectations and a wage-price spiral. Very high debt ratios (both private and public) complicate the dilemma further. Raising interest rates enough to crush inflation causes not only an economic crash, but also a financial crash, with highly leveraged private and public debtors facing severe distress. The resulting financial turmoil that intensifies the recession, creating a vicious cycle of deepening recession and escalating financial pain and debt distress. In these circumstances, central banks will blink. They will wimp out in the fight against inflation, in an effort to avoid an economic and financial crash. But that will lead to a higher permanent inflation rate, while only postponing the arrival of stagflation and debt crises. In other words, central banks in the United States, Europe, and other advanced economies have only bad options."
Nov 13th 2022
EXTRACTS: "Today’s autocrats wear staid business suits and pretend to be democrats, and that has been sufficient to grant them access to high-level meetings in Davos or at the G20, where they actively recruit former Western politicians, lawyers, public-relations consultants, and think tanks to make their case in the West." ---- "....whatever the weaknesses of Western democracies, they still command a degree of soft power that their autocratic competitors could only dream of. Democracy remains popular around the world – among citizens of both democratic and nondemocratic countries. That is why modern dictators pretend to be democrats." ---- "....there is no shortage of criticism about how the US and Europe function. But that itself is a product of the press freedom and political opposition that one can find only in democracies. But actions speak louder than words: Immigrants from around the world are eager to come to Europe or America, whereas few are trying to get into Russia or China."
Nov 9th 2022
EXTRACT: "In conventional macroeconomics, an economy’s longer-term growth potential is determined by the sum of labor-force and productivity growth. If one of those factors slows, the other must accelerate. Otherwise, long-term growth suffers.  China is in serious trouble on both fronts. An unsustainable one-child family-planning policy –subsequently changed to a two- and now three-child policy – means that the working-age population is declining, and Xi’s speech at the 20th Party Congress suggested that already-strong productivity headwinds are likely to intensify. "
Nov 1st 2022
EXTRACTS: "First and most obvious – it has happened before. And in an historical sense, it has happened relatively recently, with the collapse of the USSR in 1991 rightly considered a seismic event in world politics. The rub is that nobody predicted the end of the USSR either. In fact, it was confidently assumed in the West that Mikhail Gorbachev would go on ruling the Soviet Union, until the hard-line coup that failed to topple him (but left him mortally wounded in a political sense) made that view obviously redundant." ---- "So is it speculative to talk about a future Russian collapse? Yes. Is there evidence it is imminent? No. But in many ways that’s the problem: when authoritarian regimes implode, they tend to do so very quickly, and with little warning."
Oct 25th 2022
EXTRACT: " But in celebrating the CPC centennial, he [XI left little doubt of what those challenges might portend: “Having the courage to fight and the fortitude to win is what has made our party invincible.” A modernized and expanded military puts teeth into that threat and underscores the risks posed by Xi’s conflict-prone China."
Oct 8th 2022
EXTRACTS: "Recent inflation news from the eurozone’s largest member, Germany, is particularly alarming. In August, producer prices – which measure what is happening at the preliminary stages of industrial production – were a whopping 46% higher than in the same month last year. Given the long-term correlation between the growth rate of producer and consumer prices, this suggests that the latter could soar to 14% in November. Price stability – which is supposed to be the ECB’s uncompromising goal, per the Maastricht Treaty – is no longer perceptible" ----- "Since the 2008 global economic crisis, the ECB has allowed the central-bank money supply to increase twice as fast, relative to economic output, as the US Federal Reserve has. Of that growth, 83% was the result of the ECB’s purchases of government bonds from eurozone countries. With those purchases – which totaled an estimated €4.4 trillion – the ECB pushed interest rates on government bonds to around zero. This spurred countries to disregard European debt rules and accumulate debt at a breakneck pace."
Oct 7th 2022
EXTRACTS: "While some Russians have opposed the attack on Ukraine from the outset and publicly protested against the mobilisation that has just been declared, others, on the far right, feel that Russia is holding back too much and are increasingly calling for total mobilisation, the carpet-bombing of Ukrainian cities, and even the use of nuclear weapons." ----- "Will the Kremlin be able to channel the growing warmongering zeal? In view of the intensity of the rhetoric of the various wings of the Russian far right, backed recently by several Putin allies including the Chechen leader Ramzan Kadyrov, it is doubtful: whatever the outcome of the war in Ukraine, nationalist pressure is likely to become a serious and lasting threat to Russia’s internal stability."
Oct 3rd 2022
EXTRACT: "But US and global equities have not yet fully priced in even a mild and short hard landing. Equities will fall by about 30% in a mild recession, and by 40% or more in the severe stagflationary debt crisis that I have predicted for the global economy. Signs of strain in debt markets are mounting: sovereign spreads and long-term bond rates are rising, and high-yield spreads are increasing sharply; leveraged-loan and collateralized-loan-obligation markets are shutting down; highly indebted firms, shadow banks, households, governments, and countries are entering debt distress. The crisis is here."