Tilak Doshi Contributor
Energy
I analyze energy economics and related public policy issues.
In a landmark address on February 27th to the Bundestag, the German parliament, Chancellor Olaf Scholz announced a stunning shift in the country’s defence posture and its energy policies in response to Russia’s invasion of Ukraine. Commentators might be forgiven if they were reminded of Samuel Johnson’s adage that nothing better concentrates the human mind than the hangman’s noose. Russia’s invasion constituted the largest military attack of one state against another in Europe since the Second World War, marking in Scholz’s view a turning point in the continent’s history.
Germany’s Radical Policy Turnaround
In a sharp reversal of Angela Merkel’s policy of free riding on US support for NATO, Germany’s new Chancellor vowed to increase military expenditure to above 2% of GDP. This will make Germany — hitherto the laggard in defence readiness with armed forces that were “more or less stripped bare” during Merkel’s 16-year reign as noted by its Chief of Army — the largest spender on the military in Europe with significantly higher defence expenditures than in the United Kingdom and France. An Irish political commentator tweeted “Germany [is] basically doing what Donald Trump demanded that they do — to widespread ridicule — for the four years of his Presidency. I know it galls people to hear it, but Trump was right about some very big things.”
In another radical departure from the timorousness of the Merkel years, Scholz agreed to deliver arms including anti-tank weapons and Stinger missiles to Ukraine directly and through third countries. The Chancellor also signalled another major turn in its policy towards economic and financial sanctions on Russia, coordinating with the G7 bloc to exclude key Russian banks from the SWIFT international payment system and constraining the Russian central bank from supporting the ruble with its ample foreign exchange reserves.
Scholz’s announcement of a turnaround in German energy policies have been equally striking. Germany is overly dependent on Russia for its energy supplies, accounting for 60% of its gas imports, as well as 50% of its coal and 35% of its oil. The previous Merkel government, which focused on ever closer economic relations with Moscow and a pacifist foreign policy, heavy dependence on Russian gas was not seen as a key source of energy security vulnerability. Her government strongly supported the Nord Stream 2 gas pipeline which would have doubled shipments of Russian natural gas to Germany. By transporting the gas under the Baltic Sea directly to Germany, Nord Stream 2 by-passes Ukraine and other East European countries which provide major routes for existing Russian gas supplies reaching Europe.
Back in November, former President of the European Council Donald Tusk said that the approval of the Nord Stream 2 pipeline from Russia was the outgoing German Chancellor Angela Merkel’s “biggest mistake”, in comments which supported the warnings from former President Donald Trump who had imposed sanctions on the pipeline. In July 2021, President Joe Biden, in his continued zeal to revoke every decision made by the preceding Trump administration, waived those sanctions to “mend” relations with the Merkel government. On 22nd February, in response to Russian President Vladimir Putin’s recognition of the independence of two breakaway regions in eastern Ukraine, Scholz suspended the certification process of the completed Nord Stream 2 gas pipeline. This was followed shortly thereafter by the Biden administration re-imposing US sanctions on the pipeline.MORE FOR YOUHere’s The List Of 317 Wind Energy Rejections The Sierra Club Doesn’t Want You To SeeRevisiting The Blame For High Gas PricesWhy Do ‘Fracking’ Opponents Ignore Its Moral Benefits?
Perhaps in an even more striking reversal of long-settled German energy policy – which aims for a rapid transition from fossil fuels and reliance on renewables for all of the country’s energy needs — Economy Minister Robert Halbeck said that “there were no taboos in deliberations” concerning options to extend the operations of the country’s coal and nuclear power stations or in importing liquified natural gas (LNG). Halbeck is a member of the Green party which ensured the subordination of EU energy policy to the goal of net zero emissions for Europe by 2050.
In Germany’s about-turn in energy policy, the government is now considering options to extend the operations of its coal power plants beyond 2030. The country had previously committed to a full exit from coal by that date. To reduce dependency on Russian gas imports, Halbeck is also not ruling out options to extend the life-span of its three remaining nuclear power plants. The country is now accelerating plans to build two LNG terminals in order to diversify its dependence on Russian gas imports. Germany has significant storage capacity — the biggest in the EU — at around 23 billion cubic meters (bcm) and now plans to expand this by 2 bcm and intends to bring in regulations to ensure minimum storage requirements on private companies.
Biden’s Incoherent Energy Policies
If a modicum of energy realism has descended upon Germany after the shock Russian invasion of Ukraine, it would seem that the Biden administration – which joined Europe in the climate crusade immediately after it took office and which put “fighting climate change” as the country’s top national security concern – continues to pursue an incoherent energy policy that borders on ridiculousness.
Having cancelled the Keystone XL pipeline to transport over 800,000 barrels per day of oil from Canada to the US Gulf Coast refiners on his first day in office, President Biden revoked US sanctions on Russia’s Nord Stream 2 gas pipeline as already mentioned. After issuing a series of executive orders in the first weeks of his presidency which halted oil and gas leases on federal lands and in the Alaskan Arctic refuge – essentially waging a regulatory war on US oil and gas production – the Biden presidency continues to implore OPEC to increase oil production as US gasoline prices surged to multi-year highs and approach $4.00 a gallon. The OPEC group including kingpin Saudi Arabia have repeatedly rebuffed these requests from the US, most recently last week.
In what may plausibly be termed as energy masochism – driven by its climate change obsession — the Biden administration continues to favour the interests of the likes of Russia and Iran at the cost of those of its presumed allies. On February 18th, in an act of bizarre timing, the Federal Energy Regulatory Commission (FERC) revised its policy for approving natural gas pipelines and export terminals which will adversely impact the already fraught permitting and construction process of new US LNG export facilities. FERC by law must vouch that projects are in the public interest and won’t have a significant environmental impact but which now includes greenhouse gas emissions in its environmental analysis.
In yet another instance of energy policy incoherence which further empowers Russia’s energy leverage over Europe, the Biden administration abruptly withdrew support for, and thereby killing, the Eastern Mediterranean natural gas pipeline project in January. It did this without consulting its closest allies in the Mediterranean region, Israel, Greece and Cyprus. The ‘EastMed’ pipeline, designed to bring natural gas from the offshore fields of Israel and Cyprus across Greece to Italy and Bulgaria, was supported by Mike Pompeo, the previous US Secretary of State when he was in office. Yet another source of much needed diversification of natural gas supplies for Europe has thus been vetoed by President Biden.
But perhaps US energy policy incoherence is best exemplified by John Kerry, President Biden’s climate envoy. Straight out from the “you can’t make this up” file, Kerry stated surreally in an interview on BBC Arabic last week that he hoped Vladimir Putin would “stay on track” in the fight against climate change on the day Russia unleashed the invasion of Ukraine.
Geopolitical Realism and Energy Realism
Author and energy commentator Rupert Darwall states concisely that geopolitical realism requires energy realism. Keen observers of realpolitik and energy affairs with an understanding of basic economics such as President Putin are under no illusions. While Europe was busy deconstructing its modern energy infrastructure in the vain hope that the erratic powers of the wind and the sun are enough to power modern civilization, President Putin was doing all he could to develop Russia’s fossil fuel resources.
In late 2020, Professor Fritz Vahrenholt – with a career that included positions in Federal Environmental Agency in Berlin and as minister for energy and environment in Hamburg state — stated baldly in a German TV interview that climate science was “politicized”, “exaggerated”, and filled with “fantasy” and “fairy tales”. He predicted that Europe “will reach the [climate policy] targets only if they destroy the European industries.” He castigated Germany as a country “in denial when it comes to the broader global debate taking place on climate science”. He went on to characterize Europe’s recent push for even stricter emissions reduction targets as madness akin to Soviet central planning that is doomed to fail spectacularly.
Perhaps it takes a Putin with the hangman’s noose to convince Germans that Prof. Vahrenholt is right on the mark.
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I have worked in the oil and gas sector as an economist in both private industry and in think tanks, in Asia, the Middle East and the US over the past 25 years. I focus on global energy developments from the perspective of Asian countries that remain large markets for oil, gas and coal. I have written extensively on the areas of economic development, environment and energy economics. My publications include “Singapore in a Post-Kyoto World: Energy, Environment and the Economy” published by the Institute of Southeast Asian Studies (2015). I won the 1984 Robert S. McNamara Research Fellow award of the World Bank and received my Ph.D. in Economics in 1992.
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Sorry Ukrainians, we are kaput over here……
Gore, Thunberg headline Kennedy Center five-week climate change program – Washington Times
Russia’s invasion of Ukraine isn’t going nearly as well as they thought it would when they first commenced their attack. Which is why they are apparently mobilizing reinforcements from other regions of the country to send into the conflict.
We also hear today that the Zaporizhzhia Nuclear Power Station, which supplies 20% of Ukraine’s electricity, was attacked by Russian forces yesterday and captured. A training building was damaged by Russian fire, but no increase in radiation levels from the plant have been reported.
The Institute for the Study of War has published its daily Russian Offensive Campaign Assessment. The report for March 3rd, 2022 starts out with:
“The Russian military has continued its unsuccessful attempts to encircle Kyiv and capture Kharkiv. The Russians continued to attack piecemeal, committing a few battalion tactical groups at a time rather than concentrating overwhelming force to achieve decisive effects. Russian commanders appear to prefer opening up new lines of advance for regiment-sized operations but have been unable to achieve meaningful synergies between efforts along different axes toward the same objectives. They have also continued conducting operations in southern Ukraine along three diverging axes rather than concentrating on one or attempting mutually supporting efforts. These failures of basic operational art — long a strong suit of the Soviet military and heavily studied at Russian military academies — remain inexplicable as does the Russian military’s failure to gain air superiority or at least to ground the Ukrainian Air Force. The Russian conventional military continues to underperform badly, although it may still wear down and defeat the conventional Ukrainian military by sheer force of numbers and brutality. Initial indications that Russia is mobilizing reinforcements from as far away as the Pacific Ocean are concerning in this respect. Those indications also suggest, however, that the Russian General Staff has concluded that the forces it initially concentrated for the invasion of Ukraine will be insufficient to achieve Moscow’s military objectives.”
Operations to envelop Kyiv remain Russia’s main effort. Russian troops are also continuing three supporting efforts, one to seize Kharkiv, one to take Mariupol and secure the “land bridge” connecting Rostov-on-Don to Crimea, and one to secure Kherson and set conditions for a drive west toward Mykolayiv and Odesa.
The Russian attack on Kyiv likely consists of a main effort aimed at enveloping and ultimately encircling the city from the west and a supporting effort along the axes from Chernihiv and Sumy to encircle it from the east.
Russian forces in the south resumed offensive operations toward Mykolayiv on March 3 after securing Kherson on March 2, but do not appear to pose an imminent danger to Odesa. Russian forces likely seek to force Mariupol to capitulate by destroying critical civilian infrastructure and killing civilians to create a humanitarian catastrophe — an approach Russian forces have repeatedly taken in Syria.”
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See the full ISW assessment report at: Russian Offensive Campaign Assessment, March 3
“The Russian military has continued its unsuccessful attempts to encircle Kyiv and capture Kharkiv. The Russians continued to attack piecemeal, committing a few battalion tactical groups at a time rather than concentrating overwhelming force to achieve decisive effects.”
That may be so – or just:
…Force-oriented reconnaissance focuses on the enemy forces (number, equipment, activities, disposition etc.) and may include target acquisition.
It might also be so that Putin is facing “the dictators dilemma” – let’s hope our leaders are not caught up in their own web of misinformation so they don’t get realistic battle field assessments as well.
Something has gone very very wrong here.
“We also hear today that the Zaporizhzhia Nuclear Power Station, which supplies 20% of Ukraine’s electricity, was attacked by Russian forces yesterday and captured. A training building was damaged by Russian fire, but no increase in radiation levels from the plant have been reported.”
I assume the Russians would like to take Ukraine’s grid down, but can’t do so until all the nuclear reactors are safely scrammed in order to prevent any core accidents arising in the event the back-up cooling don’t come up fast enough. Can any nuke experts confirm this?
Confirm your fevered imaginings?
Why should anyone?
Instead look what happened at the largest Nuclear Plant in Europe – the nationalists were routed, staged a fire in the training area, expecting incoming fire, were thwarted.
So terrorists are capable of starting a major disaster, and Russia saw all this in Syria.
Russia is dealing with an exact ISIS M.O. And Chechnya sent troops to help Russia – they know exactly what they are dealing with.
Putin: Crazy Like a Fox
https://consortiumnews.com/2022/03/02/putin-crazy-like-a-fox/
Scott Ritter, US weapons inspector has actually been there, done that.
Scott Ritter is a former U.S. Marine Corps intelligence officer who served in the former Soviet Union implementing arms control treaties, in the Persian Gulf during Operation Desert Storm, and in Iraq overseeing the disarmament of WMD.
Putin’s motivations have several facets. It isn’t one possible motivation versus some other possible motivation, as Scott Ritter and others frame the argument.
It isn’t just reestablishing a buffer zone between Russia and NATO versus reestablishing the Russian Empire of the Czars.
A goal of reestablishing a buffer zone between Russia and NATO is completely consistent with a second and equally important goal of reestablishing the Russian Empire as a profitable economic and geopolitical construct on the Eurasian continent.
Bull.
You simply have no idea.
The assessments of Putin over the last two decades which cite multiple motivations for his actions form a long-held body of opinion among strategic analysts who take a balanced look at why Putin does the things that he does.
Sorry bonbon, but your passions about the current nasty situation, however sincere, don’t counter those assessments one little bit.
As Scott Ritter shows these so called ‘experts’ got everything wrong. That is the reason this disaster is around.
He has actually been trained, been there done that, not some desk jockey.
One takeaway is while Putin’s war machine is powerful, it’s still second-rate. Before anybody gets too much comfort from that you should know the same applies to most of western Europe’s armed forces as well.
The American military, meanwhile, is no longer focused on deterrence and warfighting but is obsessed with equity, trans-rights and critical race theory. It simply isn’t what it used to be just 2 years ago. Freedom-loving American patriots are no longer welcome.
Given the problems the Russians have had in managing their invasion, and given the strength of will Ukraine has shown so far in fighting the invaders, what is likely to happen next is that in order to prevail, the Russians will use mass formations combined with sheer firepower brutality as a substitute for tactical sophistication and firepower restraint.
I don’t think they’re having as much of a problem managing their invasion as they’re up against a population that has been led to believe that NATO is going to intervene on their behalf. Not difficult to understand, since NATO did intervene against Serbia, a Russian ally, in the ’90’s. Neither that intervention nor NATO’s eastward march has been lost on the Russians, which brings us to the present. Unfortunately, the increased resistance means the Russians will have to go full-Stalin to achieve their objectives.
This is real–but late.
Which countries are sending military aid to Ukraine? | Russia-Ukraine war News | Al Jazeera
Funny thing is I never read Al Jazeera until this Ukraine war heated up, yes heated up, it has been going on since 2014.
It is the only place I seem to get reporting covering more aspects of the war.
Searches often lead there.
And as a patriotic citizen of the United States, it is incredibly sad to me that all US media is worse in reporting on this war, including Fox.
It’s been that way forever. From ‘Remember the Maine’, to the ‘Huns’ bayoneting babies in Belgium, to the Iraqis pulling babies out of incubators, etc. With a couple of exceptions, it’s all Jingoism, all the time.
I see a couple of countries are seeing this as a way to dispose of older munitions. M72’s?
I read the link to the siting issues that plague renewables. Don’t worry, they have a plan for that.
The Build Back Better bill gives the president explicit emergency executive powers to over-ride all local and state opposition to siting of renewable energy projects. In other words, the BBB bill would give the president dictatorial powers and render all private property rights meaningless.
Of course this is all completely unconstitutional. That doesn’t bother them in the slightest.
I await Duane to respond that the POTUS can not have and never has had such powers.
I do not understand how the president of the USA has the power to say “yea” or “nay” to pipelines in Europe.
CM,
Join the club. I would only suggest that these ‘powers’ have something to do with the reality that north of 80% (90%?) of what the Federal government currently does is unconstitutional. Sad, then, that a lot of folks here somehow believe that this same Federal government is both competent and motivated only to act in the their best interests when it comes to foreign policy.
Yeah, no kidding.