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Ukraine’s invasion underscores Europe’s reliance on Russian fossil fuels

Even Germany, Europe’s largest economy, which has invested heavily in renewable energy sources, is still heavily dependent on fossil fuels, especially for heat and transportation. Non-fossil-fuel sources meet only 16% and 7.5% of the requirements, respectively.

In response to Putin’s actions, German Chancellor Olaf Schulz announced plans to halt the development of the Nord Stream 2 pipeline, designed to carry natural gas between Russia and the northern part of the nation.

In addition, the European Union and the United States imposed a variety of sanctions, including tougher sanctions on some state-owned financial institutions and the Russian elite. US President Joe Biden has vowed to take tougher action against Russia “if it continues its aggression.”

He stressed that the administration is deliberately taking steps to ensure that the conflict does not increase energy costs for US consumers.

“We are implementing a plan in coordination with major oil-producing consumers and producers towards collective investment to stabilize and secure global energy supply,” Biden said at the White House on Tuesday. “It simply came to our notice then. I want to limit the pain that Americans experience at the gas pump. “

There are a handful of scenarios that could lead to price increases. International sanctions can directly or indirectly increase the cost of producing or distributing fossil fuels. The conflict itself could affect the operation of natural gas pipelines through Ukraine. And Russia may decide to slow or even cut off supplies for strategic purposes.

While European nations could use other sources for oil and coal, tight global supplies and the existing pipeline system severely limit alternative options for natural gas. According to a recent analysis by Brugel, an economic think tank, a complete shutdown of Russian natural gas in Western Europe, especially in the long run, will require various drastic efforts to keep homes warm and businesses online. These could include controlling energy demand, increasing domestic production, tapping into emergency reserves, scrambling to find alternative suppliers, delaying the retirement of nuclear power facilities and possibly bringing some retired coal plants back online.

But Laurent Rusecas, executive director of IHS Markets, a consultancy focusing on gas markets in Europe and Asia, says the deep interdependence between Russia and Western Europe would make such a “worst case scenario” extremely difficult.

Russia will lose both its decisive source of income and will clearly oppose Western Europe, forcing the nations to take extreme measures to eliminate their dependence on natural gas imports once and for all. Some observers believe it could drag more countries into conflict and even prompt costly sanctions.

For his part, Putin claimed that Russia would not disrupt the flow of natural gas to international markets.

But even then the situation underscores Europe’s weakness, especially after months of already high energy prices. It has been driven by a combination of growth factors, including the revival of the global economy by the removal of epidemic controls; Particularly harsh European winters in 2020-2021 that depleted natural gas reserves; Germany’s improper decision to shut down many of its nuclear power plants; China’s excessive use of liquefied natural gas; And less than normal natural gas exports from Russia. Some saw it as a strategic attempt to raise prices, already tightening the nation’s supply, or forcing Germany to approve the Nord Stream 2 pipeline.

Some fear that developments in Ukraine and any consequent energy security issues could distract European leaders from meeting their Middle Ages climate goals. Certainly some politicians and members of the public will argue that a shift in climate policies and renewable energy sources is responsible for Europe’s uncertain energy supply. They will strongly point to unusually low wind energy production in recent months, due to weak winds in the region in the United Kingdom.

But Nikos Tsafos of the Center for Strategic and International Studies Controversy over these views And argues that any further price increase would only lead the European Union to a “double down” on the transition to clean energy. The EU has already formulated the world’s most ambitious climate policies, setting rapid targets for migration to carbon-free energy production and industrial practices. Critically, many of these measures also provide a buffer against barriers to international fossil-fuel supplies.

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