UKRAINE: US Gas & Europe’s Decarbonization Hit

Energy profit not climate change action takes precedence in U.S. foreign policy, writes Michael Davies-Venn. 

European Commission President Ursula von der Leyen on March 24, during a session in which members condemned Russia’s attack on Ukraine, urged further sanctions on Moscow and called for “protecting the European economy.” (European Parliament, Flickr, CC-BY-4.0)

By Michael Davies-Venn
International Politics and Society

As the war in Ukraine continues to shake up geopolitics, earlier allegiances formed during the Cold War are solidifying. But though a negotiated settlement to end the conflict is not in sight – as evidenced in recent U.N. Security Council resolutions –, links between global energy policy and the war are becoming increasingly clear.

The connection is illustrated in as yet perhaps one of the most unfortunate geopolitical outcomes from the ongoing war.

While the European Union’s decision to buy more liquefied natural gas (LNG) from the United States may seem to solve short-term supply energy problems on the continent, it also consolidates the EU’s fossil fuel energy infrastructure. At the same time, it weakens that of renewable energy, creates a leadership vacuum on addressing global climate change, and may well undermine how the EU implements its European Green Deal.

It’s important to bear in mind that methane, the main gas in LNG, is the second leading greenhouse gas contributing to climate change and has, since 2011, “exceeded pre-industrial levels” by 150 percent.

The continuing energy crisis in Europe — partly a result of the war — is a chance to increase the speed with which Brussels decarbonizes European economies.

Washington says, and Brussels agrees, that paying the U.S. for more LNG is a short-term fix to “enhance security of supply” for Europe. But this makes sense only if the increases does not permanently lock the continent into an energy infrastructure for importing even more fossil fuels, at a time when Brussels is supposedly committed to carbon neutrality.

US Gas Will Dominate Europe

U.S. Deputy Energy Secretary D. Turk, second from left, facing Maros Sefcovic, vice president of the European Commission, in a March 14 meeting. (DoE, Donica Payen)

Presently, projected gas import increases from the U.S. to Europe will more than likely demand ramping up Europe’s existing LNG import terminals.

Just a year ago, the European Commission approved 20 projects to improve gas transmission. At the moment, LNG terminals are either being built or commissioned in Belgium, Poland, Croatia and Cyprus, under the EU’s Projects of Common Interest framework “for electricity, gas, oil, cross-border carbon dioxide and smart grids.”

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To decarbonize the EU’s economy earlier, gas projects in the EU’s current and fifth Projects of Common Interest list were reduced by “38 percent” compared to the previous list, a progress for which the commission credits the EU’s “decarbonization objectives.”

LNG imports from the U.S. are likely to increase in the next eight years and will stall this progress. Instead, investments to develop and improve the E.U.’s import and transmission fossil-fuel infrastructure to accommodate these increases should be shifted to renewable energy.

With the U.S. the “biggest gas producer in the world,” the E.U. the “second largest consumer” only to the producer, the U.S. is the first sovereign to, perhaps unwittingly, financially benefit from the war between Russia and Ukraine.

Last year, “LNG exports to the E.U. recorded the highest volume, reaching more than 22 billion cubic metres, with an estimated value of €12 billion.”

As the war rages on and sanctions on Russia remains in place, the U.S. position becomes even more enviable as the cost of LNG gas is increasingly no longer based solely on competitive prices but on access to a single presumed secure supplier.

With U.S. LNG production exponentially increasing from the construction of new “liquefaction units,” the E.U. was in good position as a leading consumer, after the U.S. became a supplier here just six years ago. The war has changed the dynamics. Now, as the commission admits, “the United States is already the largest supplier of liquefied natural gas (LNG) to the EU.”

The EU’s Disadvantaged Position

Flood damage in Pepinster, Belgium, on July 17, 2021. (Christophe Licoppe, European Commission, Wikimedia Commons)

Whereas being a single major market supplier is certainly good for the U.S. economy, it is not for a single major consumer of a commodity now with less price competition. It is a bit of an irony that prior to the war, increasing competition and assuring energy security by diversifying energy supply were reasons given against Russia’s position as Europe’s leading energy supplier.

Now, despite EU and U.S. claims of working with “diverse sources across the globe” to replace Russian supply gas supply to Europe, the reality is that the U.S. seems to have simply replaced Russia.

All this means that the EU now finds itself in a disadvantaged position — in relation to a supplier that continues to fail to make carbon neutrality a national objective as have 27 EU member states.

Liquefied natural gas shipping container. (DoE)

Surely, this is not a good position for the EU to be in: Brussels has been trying to reduce higher electricity bills of Europeans caused by a “price hike” for consumers after wholesale electricity prices increased “by 200 percent” on a yearly basis,” which the EU says was “primarily due to global demand for gas.”

This is all the more concerning since U.S. President Joe Biden has thus far failed to lead the rest of the world on resolving the imminent global climate crisis.

By calling petrol price increases in the U.S. “Putin’s price hike,” Biden is unfortunately and deliberately politicizing a global political crisis as a national energy problem. His effort is betrayed by knowledge held among even the much less informed that Russia, an OPEC member, did not arbitrarily raise U.S. gas prices by some “75 cents.”

Biden’s comments highlight the aged but strong umbilical link between energy and economic growth and, more importantly, demonstrates that energy profit not climate change action takes precedence in U.S. foreign policy.

It also reveals as it reminds that climate change is politically expedient in the U.S., where more oil is produced than anywhere else in the world.

In short, pumping Europe with an additional 15 billion cubic tons of gas plus a possible 50 billion until 2030, ramping up fossil fuel production in recent years and failing to produce a national climate change plan, all suggest that the U.S. is not and cannot serve as global climate change leader.

Missing Climate Leader

The world has been without a steadfast and convincing global leader it needs on climate change for years. Brussels had tried to assume the role and cajole the U.S. and China into action. But with its methane deal, the EU puts itself in a rather awkward position that undermines Europe’s leadership on climate change.

And this will play out with Washington always trying to ascertain whether a call from Ursula von der Leyen, president of the European Commission, relates to gas or climate change. Such soiling of the EU’s reputation on climate change is quite unnecessary and could have been avoided had the commission focused on transitioning to renewable energies, even in times of energy supply crunch.

Perhaps no other global commodity has contributed as long a bloody history to modern economies than oil. And as gas increasingly becomes the new oil – and a “drug” for economies – links between energy and war risk further threats to lives in places where people are already dying from climate change induced heatwaves, sea-level rise, and drought – and well before what climate change models predicted.

It is inconceivable to imagine wars having such profound impacts on energy supply and security as is now the case, if main sources of energy are renewables. This isn’t the first and certainly will not be the last war waged in a far-flung place but yet impact lives farther away.

That reality and the imminent threats posed by climate change impacts should provide sufficient inducement for a more reasoned response to Europe’s present energy crisis. No one can be certain when or how the war will end, but uncertainty is not a prudent excuse for consuming ever more fossil fuel. Instead, it provides an opportunity for change, as people are more than likely to understand and accept the cost.

Michael Davies-Venn is a public policy analyst and communication expert. He works on global environmental governance with focus on climate mitigation and climate adaptation measures between developing and developed regions. He is junior fellow at Vrije Universiteit, Amsterdam.

This article is from International Politics and Society.

The views expressed are solely those of the author and may or may not reflect those of Consortium News.

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20 comments for “UKRAINE: US Gas & Europe’s Decarbonization Hit

  1. Wade Hathaway
    May 13, 2022 at 19:42

    Right on Realist. Of course the ultimate irony is that, truly, the path forward to establishing a carbon neutral or even carbon reduced world would cost next to nothing. It is only in the context of our hyper consumerism (particularly car centric infrastructures) that the cost of transitioning to post fossil fuel energy markets take on such a daunting figure. The cost of reconfiguring communities to be walkable, bikable, with access to public transportation in vastly lower. Start now by taxing the hell out of both fossil fuels and conspicuous consumption. We will all feel the initial pinch. But put that money into refurbishing our societies. We don’t even need to go to some utopian post capitalist never land. Yes capitalism would need to change, rescale down to more local focus, more emphasis on durability and sustainability. People can still make money, there can even be a form free markets but there can be no more predatory free-for-all markets where *profit is the sole* purpose. We just won’t survive buying our way out of the crisis. North America and the EU pivoting to soley US sourced LNG now, is utterly insane.

  2. Kalen
    May 12, 2022 at 18:39

    Americans should be aware what massive LNG exports to EU would mean. The production cost (also energy costs to produce LNG ) alone is 5-10 times higher than via pipeline Russian production and delivery. As effective politically motivated near monopoly US LNG can and will demand any price. Qatar just demanded outright 20 years committed to paying soaring market prices or no EU deal.

    What that means is prices of nat gas in US will soar as all the corporations will want to get on LNG bandwagon of enormous profits wanting their natgas liquified and exported. For Europe it means noose on their energy necks for many decades to come, destruction of their huge petrochemical industry and all industries relying on cheap energy resulting in more pauperization of population.

    What such a move means to EU environmental and green policies? It Means either near total repudiation of those policies or commitments or programmatic pauperization of EU citizenry namely “greening” via economic collapse via pricing fossil fuels out of consumer market.

    Bills for those senseless Russophobic policies are already arriving in our mailboxes.

    • David H
      May 13, 2022 at 17:55

      Baerbock’s position on Nordstream 2 was a joke…is a joke. Are the Greens over there infiltrated by neocons, or what’s the deal? It makes “Greens” look like they have no ideas on transitioning. None. No grasp of anything. What I heard is that Merkle got Russia to build Nordstream 2. And Greens here don’t seem to be acknowledging the Russophobic nature of what’s going down either. There’s a site that shares things called “International Affairs & Geopolitical Analysis.” Sounds deep, but what they share AFAICS is just that…”analysis.” Seems like plain lingo to me, but I guess for some it’s a little technical? Which makes me think of that old major “political science.” Yes, when it comes to “technical” and/or science [including computer science]…those who used to be the left suddenly won’t go there.

    • Mark J Oetting
      May 15, 2022 at 14:30

      To make matters worse. Germany and others are banning Nuclear power plants. Talk about being counterproductive anyone

      • David H
        May 15, 2022 at 18:45

        I think the odds are we’ll wish we had started down that road ourselves. One can only pray normal odds will keep on get’n jiggled. A million tons of radioactive water…I converted that to railroad tanker cars (forgot how many); and that much didn’t seem like it could fit in the tanks at Fuk.

  3. DavidH
    May 12, 2022 at 13:17

    “No one can be certain when or how the war will end, but uncertainty is not a prudent excuse for consuming ever more fossil fuel.”

    But it should have been seen that this excuse…just like Trump’s anti-Russia LNG-exporting pipe dream…would have been voiced loud if we turned Ukraine into super-proxy. There is the argument that extravagant industry in Europe could have used a little LNG from the US, but the stupidity of using Ukraine was the main thing to avoid in the first place. Because, as soon as it happened, resorting to the US for back-up would impinge on default/current/minimum household consumption…even after (AFAICS) makers of, say, ten luxury car models accepted the cuts in access they’d experience. If you hold limits industry would accept as fixed/quasi-rational…then really, if you accept some situation where the US has to chip in some fracked product, and if said situation was this proxy war…then it seems like the press-PTB should have been screaming early on that normal consumption would end up a challenge in such case, not to mention more.

  4. vinnieoh
    May 12, 2022 at 11:27

    I am not familiar with this writer and his style. Some passages immediately jolted me (negatively,) but as I continued to read, he conveys more nuance and depth than I am used to. I will re-read more slowly.

    One take-away that is obvious to he and I is that the US energy/climate policy under the Biden Administration only looks like it is adrift and rudderless, while below the waterline the same old ancient mariners are charting the course: sell as much hydrocarbons before the remaining surviving race bans them. Current US energy/climate policy is not a shambles – it’s a sham!

  5. Vera Gottlieb
    May 12, 2022 at 10:40

    The US has always been a very materialistic nation – in peace time or in war time. $$$ come first…no matter what.

  6. Westley
    May 12, 2022 at 08:49

    Is it beyond reason that the energy giants and their host countries, who have spent four decades or more developing the infrastructure for LNG to Europe (and the world), would regard losing trillions as — more than an existential threat, not conceivable?

  7. rosemerry
    May 12, 2022 at 01:10

    “unwittingly” may be the best word to describe all the actions of the USA and the EU for all the behavior of this complete debacle, starting with the recourse to “sanctions” by the USA towards any country it designates as disobedient.

  8. ted
    May 11, 2022 at 17:51

    The war in Ukraine is a result of the effort to impose the hegemony of the US$. The climate cult is the appropriate fig leaf. If oil and gas are not wanted, there are other raw materials for which a war seems worthwhile. The politicians do not care about the people who lose their livelihoods or even their lives. Sentimental pariotism is as little their thing as justice, – in the end it is about money. All the wars that have been fought for control over raw materials serve only this purpose.

  9. Bob McDonald
    May 11, 2022 at 16:33

    For the past decade the Europeans have poo pooed the importance of energy security. Now it’s going to pay a heavy price. High energy prices and unreliable wind/solar will permanently undermine the EU’s industrial economy. Decarbonization is the least of its problems.

    • goldhoarder
      May 13, 2022 at 11:26

      Yes. This is my issue with the climate fanatics. They don’t seem to have a clue how important and how much dependence there is on fossil fuels. They really do think we can just not use any and life will be fantastic. As the world become more cold and hungry there are going to be a lot of angry people pointing fingers.

  10. Andrew Stretton
    May 11, 2022 at 16:18

    Oh dear. Yet another unfortunate article that fails to take into account the issue of ‘Energy Returned On Energy Invested’ (the Energy Cost of Energy). As a result, the numerous assertions made in it, are deeply problematic and misleading. The Laws of Thermodynamics and Entropy do not care a jot for ‘wishful thinking’, of which this article is full.

    • Rebecca Turner
      May 12, 2022 at 03:10

      Well, Andrew, perhaps you will enlighten us with your superior knowledge.

    • Realist
      May 12, 2022 at 12:33

      It’s almost laughable how much of the energy contained in the recovered natural gas must be expended (frankly wasted) in compressing it to a liquid form (not exactly the safest procedure), then transporting it thousands of miles across the ocean (burning fossil fuel to propel the craft) to special facilities (another investment of money and energy) where it will be stored and finally decompressed back to gaseous form for transmission via pipeline to its final destination for use. The environmental damage to aquifers and other aspects of the environment, plus whatever steps are taken to mitigate such damage, must also be factored into the costs of producing “fracked” gas, which represents a massive and increasing share of the product in the USA. Some of the proprietary fracking agents (which also have a cost) are extremely toxic to both plants and animals, which should be considered another major casualty of this pointless scheme. The amount of energy literally squandered becomes preposterous when there is a demanding and convenient market place for the product right here in the United States (and Russia is equally most expedient as a source of gas for Europeans) which does not require the massive overheads already mentioned. Moreover, the stuff is a limited resource and the day will come when American consumers will regret its unavailability in the future, exacerbated by the unnecessary wastage right here and now merely to enhance the profits of the uber-capitalists with nominal control of such a valuable resource.

      The human population of the planet continues to grow implying ever increasing demands for FINITE natural resources in the future. “Peak” oil, peak natural gas, even peak potable water and peak fertile topsoil are not just archaic notions that our ignorant predecessors foolishly hypothesized. There really must be a peak availability for every human necessity on this limited world of ours–even if the population were decimated accidently or purposely.

      It does not seem unreasonable for the introduction of laws requiring the most efficient use of Earth’s dwindling resources such as they are, so they can provide the greatest good for the greatest number. Fracked gas should be minimized. It should be used as close to local as possible. And LNG should be delivered only to locations not serviceable by pipelines. The “Laws” of Thermodynamics cannot be flouted without consequence as easily as human legislated laws.

      Lithium battery-powered cars is another boondoggle that offers only a quasi-solution to ecological concerns, is highly inconvenient in practice, requires an enormous investment in lacking infrastructure (more power plants, an expanded grid and multi-million charging stations), and will be limited by the scarcity of the resource requirements and difficulty in recycling them (e.g., Lithium and the rare earth elements). Yeah, they will be wonderful toys for the rich but not the masses. They may have various specialised, industrial or mass transit uses that do not generally apply to average consumers. Rather than trying (and failing) to expand our fragile power grid and power generating capacity to accommodate a Tesla in every home garage with its own rapid (still too slow) charger, how about we first concentrate on hardening it against the next war employing EMP weaponry and the next Carrington Event from the next sure-to-come solar mass ejection powerful enough to fry the grid and make it unrepairable for the next several decades because you need current technology in place and functioning to facilitate its timely replacement. The requisite huge transformers of the 21st century grid cannot be manufactured using 19th century technology. Either harden them or stockpile replacements while still possible (it takes a couple of years to manufacture each one and only 2 or 3 companies in the world make them).

      Ah, that might be a good strategy for lifelong security for our country (and the world) but maybe not a strategy for making the biggest profits in the shortest time, which probably explains why it’s never been done. We will eventually pay for allowing only the uber-capitalists to make every decision impacting billions of the rest of us. I would respect Musk more if he simply pushed to enhance the grid, not even using his own m0ney. Actually he would stand to make more money from selling his Teslas, but his priority is to colonise Mars and probably rule his own planet. I think that Phillip K. Dick wrote a few novels about guys like him.

    • Wade Hathaway
      May 12, 2022 at 15:42

      Not sure what you are on about Andrew. I think most of us here know that we must transition to new energy sources over time. And yes, we understand the need to use fossil fuels during this transition. This article focuses on 1) using war/sanctions to manipulate energy markets purely for profit and 2) the lack of leadership around, and enactment of, serious strategies to minimize fossil fuel’s impact on climate change. It is perplexing [to say the least) that the EU and US are going to dump billions into infrastructure that will likely exacerbate our climate predicament. Getting relatively cheap fuel from Russia with rather modest infrastructure expenditures allowed EU more resources to be funneled to the transitional energy market. That focus on transitioning is in serious jeopardy.

      • Realist
        May 13, 2022 at 16:39

        He was driving at the concepts I just covered in the response above yours. He was thinking like a scientist or engineer. LNG is about as costly, inefficient and wasteful of the energy extracted from the ground as it gets. It ends up throwing much more greenhouse gases into the atmosphere than the pipeline from Russia ever would, which thwarts your very purpose of the transition. Not to mention that someone was led to squander how many billions in costs and construction materials to build the Nordstream2 pipeline which is now basically scrap metal under the Baltic. Simply absolute wastage of irreplaceable resources, needlessly pouring more heat into the atmosphere to no practical purpose, in order to project political and military power on the part of the USA.

  11. evelync
    May 11, 2022 at 14:41

    This tragic war in Ukraine (precipitated from all the evidence from 1995 on with NATO’s breaking 1990 pledge not to expand eastward if German unification approved by Russia- most especially, an encroachment with a military nuclear armed alliance lining up on Russia’s western borders thus viewed as an existential threat) seems to have become a wet dream for the anti-climate financial interests of the fossil fuel industry and the #MICIMATT.

    Was this possibly in the cards all along? Almost too good to be true as an unintended consequence….just saying… hmmmm…..

    • Anonymot
      May 12, 2022 at 21:08

      It has surely been true as a very intended consequence ever since Victoria Nuland and her direct boss, VP Joseph Biden plotted, planned and executed the regime change in Kiev’s Maidan Square with several diverse groups of self-declared Nazis who have since acquired major power positions in the Ukraine’s government.

      The trigger of proposed expansion of NATO and the expanding influence of the Svobado and Azov Battalions crossed Putin’s clearly stated red lines. The resulting fantastic sales of our armament industry, our gas and oil industry and our transportation industry must have left certain people, both stockholders and politicians trying to wipe the grins off their aces in public. So here we are again, at war, but this time with 99% proxy troops dying and bleeding along with less civilians than the last time dying and fleeing, but that’s an acceptable number to the grinners.

      Those who will suffer in descending order: The Ukrainians, the Russian soldiers and families, the EU members, the poor who face unbearable prices and by next winter lacks of food and heat, i.e. Africa, South and Central America and everywhere else including the United States of America. Everyone who lives in any climate that will be dried up, flooded out, frozen up or heated to the boiling point, and, yes, the US whose economy will be wrecked when the fantasy is over and the bill due.

      The Limits To Growth , published in 1972 told us how this would end, re-editioned on its 20th and 30th anniversaries – and here we are. Undone by virtue of ungoverned.

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