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An array of stunning energy-related news continues to flow out of Europe on a daily basis, as the collective decisions by the EU and various national governments to attempt to prematurely accelerate an “energy transition” away from fossil fuels to renewable energy continue to feed an expanding global energy crisis.
German Economy Minister Robert Habeck announced Sunday that his government plans to reactivate mothballed coal-fired power plants this summer in a move to conserve the country’s diminishing supplies of natural gas. “To reduce gas consumption, less gas must be used to generate electricity,” Habeck said, “Coal-fired power plants will have to be used more instead.”
Minister Habek pointed to Russia’s recent decision to cut back on natural gas flows into Europe on its Nord Stream 1 pipeline system as the reason for Germany’s latest energy-related crisis. The Economy Minister explained the goal will be to refill the country’s natural gas storage facilities in preparation for the coming winter, noting that “Otherwise, it will be really tight in winter.” Germany’s natural gas storage levels are currently at a historically low 57% level.
Meanwhile, in France, the New York Times
EDF blames the unusual level of outages on a prevalent heat wave and a “mysterious emergence of stress corrosion” in some of its aging fleet of nuclear plants, many of which remain in operation beyond their initial projected life cycles. Pointing to the fact that EDF is already 43 billion euros in debt and that debt level is about to rise due to a deal the utility recently entered into with Russia’s nuclear power operator, Rosatom, the French government is now considering the possibility of nationalizing EDF to avoid financial disaster.
Germany’s government decided to resolve its own nuclear power “problem” in recent years by choosing to retire all of its own power stations, leaving the country with no options other than reactivating dormant natural gas and high-polluting coal plants when its heavily-subsidized wind industry failed to live up to its promises starting last summer. The weakness there, of course, is that Germany and most other western European nations must import most of their gas and coal needs due to their further decisions to refuse to exploit their own mineral resources as a means of enhancing their level of energy security. Those countries by and large decided to rely on the nearest and cheapest source of those fossil fuels, Russia, despite consistent warnings from several pre-Biden U.S. presidencies that doing so was a clear security risk.
As a result of these conscious energy policy decisions, Germany, France and the rest of the European Union found themselves rendered essentially impotent to respond to Vladimir Putin’s invasion of Ukraine in late February with any effective sanctions on Russia’s energy industry. Having essentially no real energy security, they also found themselves vulnerable to Putin’s exercises of geopolitical leverage, as seen with Russia’s steadily rising restrictions of exports of oil, gas and coal into Europe. Because India, China and other importing nations are not participants in the sanctions regime, Russia has been incrementally replacing European trading partners with new partners in Asia and other parts of the world since its war began.
As a result of Europe’s lack of energy security and its geopolitical leverage, the Washington Post reported last week that Russia’s oil revenues soared to new record levels during the first 100 days following its February 24 invasion of Ukraine. According to a new study from Center for Research on Energy and Clean Air (CREA), “China was the largest importer, buying more than $13 billion worth of fossil fuels during that period, followed by Germany, at around $12.6 billion.”
The same dynamic was at play during those 100 days where Russia’s natural gas exports are concerned. France is the biggest importer by volume of Russian-sourced LNG, while Germany imported the highest volumes of Russian-produced pipeline gas.
Those two countries will now find their prospects related to natural gas supplies further limited due to the Biden administration’s own fealty to its energy transition Green New Deal policies. Germany, France and other European natural gas importing countries are pinning much of their hopes for displacing cheap Russian gas supplies with more costly LNG imports from the United States.
The U.S. industry would love to be able to fill that need, and President Biden famously promised it would do so during a press conference in early March. However, it has since become crystal clear that Biden’s regulatory agencies have no intention of reversing course and starting to expeditiously approve permits to facilitate the expansion of critical pipeline and LNG export infrastructure that would be required to meet Europe’s needs. The unfortunate reality is that, so long as Joe Biden remains in office, America is unlikely to become the reliable partner Europe needs to free itself from its self-imposed subservience to Russia for its natural gas supplies.
All of these unfortunate, but highly-predictable outcomes are directly traceable back to Europe’s – and now America’s – fealty to a wishful-thinking set of energy transition policy decisions. So long as that continues to be the dominant philosophy among western governments, we should expect to continue to see a steady stream of stories just like those cited above to flow out of Europe and continue making the global energy crisis more catastrophic than it has already become.