For the energy sector, which favors stability and the long term, the news is nothing short of historic, with the spectacular rise in the price of a barrel of oil and gas in Europe, and the embargo against Russian oil, in the context of the war in Ukraine.
Even more significantly, Europe, determined to end its large purchases of fossil fuels from Russia, has just released an ambitious action plan to “become independent of Russian gas well before the end of the decade”. and move more quickly towards clean energies.
Everywhere else, it is clear that states are taking notes, including China, South Korea and Japan, which are heavily dependent on foreign sources for their oil and gas supplies. The security of energy supply will be reassessed in the light of this unprecedented context, and will certainly take the lead in the scale of priorities.
It is not yesterday that the Europeans have been singled out for their excessive energy dependence on Russia. In 1981, when the gas pipeline project from Siberia to Europe via Ukraine was announced, the Reagan government imposed heavy sanctions on the companies participating in this project. Washington argued that the large revenues from these sales would only serve to strengthen the regime, giving it an additional card to bend the continent to its will.
The reaction was vigorous, especially on the German side, where the leaders have always promoted close commercial ties with the Russians. According to them, trade calms relations, because it is based on common interests.
A compromise was later established. Europe has undertaken not to import more than 30% of its gas from this country. Today, it depends more than 40% on Russian gas for its needs.
This geopolitics around Russian pipes to Europe resurfaced with the Nord Stream gas pipeline, which directly links Russia to Germany and which was put into service in 2012. Again, the United States forcefully signaled to the Europeans that this gas pipeline, sponsored by Gazprom, majority owned by the Russian state, aims neither more nor less than to circumvent Ukraine in order to weaken it because of its autonomist desires vis-à-vis Moscow. The US position gained legitimacy in two incidents, in 2006 and 2009, when Moscow cut gas flow in the middle of winter due to trade disputes with Ukraine.
The Nord Stream 2 project has done nothing to appease some parties. The invasion of Russia in Crimea in 2014, and the frontal opposition against this project in Eastern Europe, including Poland, convinced the Americans to impose sanctions against the companies participating in the project. They even passed a law to this effect in 2019: the Protecting Europe’s Energy Security Act. The project was completed at the end of 2021, but the Russian invasion of Ukraine sealed its fate, as Germany announced that it will not give the certification required for its commissioning.
Events will have proved the Americans right. Europe is now paying for its slowness in freeing itself from the Russian producer who placed it, in fact, in a situation of great vulnerability. Perhaps Europe needed such a shock to act, as was the case for the West in 1973, during the oil embargo decreed by the Arab countries because of their support for Israel. Living in a certain energy recklessness, the West had a hard time with this crisis, which caused oil prices to quadruple.
Subsequently, having become aware of their dependence, the major energy-consuming countries adopted vigorous measures in terms of energy efficiency, diversification of sources of supply and research and development. Two countries, France and Japan, have gone full nuclear.
The current upheavals in the geopolitics of energy will remind the States of the world of the importance of taking the security of their supply very seriously. The solutions are within reach, with the spectacular drop in costs associated with renewable energies over the past 10 years: betting on these local energies, consuming less and more efficiently, and becoming more linked to reliable countries for supplies from outside. .
In terms of energy, this will certainly be the great lesson to be learned from this historic crisis.