The prospect of a winter spent in the cold and dark is a daily reality for Ukrainians. That’s precisely the goal behind Russia’s targeting of energy infrastructure as it continues to pursue Vladimir Putin’s pipedream of restoring the Soviet empire.
The impact of the war is also being felt across Europe, as energy prices skyrocket with winter on the horizon. Even here, we’re feeling the impacts at the pump, gasoline prices on the rise again.
Putin appears to be hoping that the turmoil will help undermine support for Ukraine, prompting other countries to call for some kind of deal that will favour the Russians, who are losing on the battlefield almost as badly as they are in the court of public opinion.
Energy prices and the prospect of blackouts are weapons at Putin’s disposal, notes New York Times columnist Thomas Friedman.
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“As the Russian Army continues to falter in Ukraine, the world is worrying that Vladimir Putin could use a tactical nuclear weapon. Maybe – but for now, I think Putin is assembling a different weapon. It’s an oil and gas bomb that he’s fusing right before our eyes and with our inadvertent help – and he could easily detonate it this winter,” he wrote in a piece last week.
“If he does, it could send prices of home heating oil and gasoline into the stratosphere. The political fallout, Putin surely hopes, will divide the Western alliance and prompt many countries – including ours, where both MAGA Republicans and progressives are expressing concerns about the spiraling cost of the Ukraine conflict – to seek a dirty deal with the man in the Kremlin, pronto.”
The solution may be for countries such as the US and Canada to step up production of oil and gas to help offset Putin’s manoeuvring, which has been aided by OPEC, most of whose members are also not bastions of democracy.
“If Biden wants America to be the arsenal of democracy to protect us and our democratic allies – and not leave us begging Saudi Arabia, Russia, Venezuela or Iran to produce more oil and gas – we need a robust energy arsenal as much as a military one. Because we are in an energy war!” writes Friedman.
The near-term solution is an energy policy that provides for more production, using the cleanest technologies possible, despite climate change and the decarbonization policies.
Canada has already agreed to help Europe move away from its dependence on Russian oil and gas. Plans to provide liquefied natural gas to Europe in a few years time may be little more than lip service – there’s no LNG infrastructure and every little development in the oil and gas industry is fraught with both peril and delays – but stepped up production in Alberta could provide some stability and downward pressure on prices, though the industry would prefer higher prices … and profits.
While we’re a long way from seeing any movement on that suggestion, there’s already been pushback from environmental groups. That puts the government in something of a quandary: it’s pledged to reduce greenhouse gas emissions, but is being squeezed by public response to skyrocketing fuel prices. It’s a case of being unable to both suck and blow at the same time.
Given that there are no short-term alternatives to petroleum, Ottawa may be forced to concentrate on moves that help with pricing in the near term – reduce or eliminate carbon taxes, boost supplies, remove other disincentives – while at least signalling long-term plans to phase out fossil fuels.
If Canada and the world community are going to turn the screws on Russia for its invasion of Ukraine, helping Europe find alternatives is the key. For now, alternatives mean other suppliers of fossil fuels, particularly natural gas. We’re also busy providing energy south of the border, which has much more refining capacity.
While Canada may not be able to address the crisis today, it can help with long-term solutions to supply issues, argues Deborah Jaremko of the Canadian Energy Centre.
Certainly supportive of the Alberta-led industry, she argues in a recent opinion piece that Canadian oil and gas is part of the energy security crisis.
“Europe will continue to require substantial volumes of crude oil in the decades to come, even as more renewable energy comes online. According to the International Energy Agency’s latest outlook, Europe will consume 10 million barrels of oil per day in 2030 and six million barrels per day in 2050,” she writes.
“But the European market can’t be viewed in isolation. It’s part of the global oil trade, where, driven by emerging economies in Asia and Africa, overall demand is expected to increase to 103 million barrels per day in 2030, from 97 million barrels per day in 2019. In 2050, the IEA expects the world will still consume 103 million barrels per day.
“The Trans Mountain pipeline expansion being built to the B.C. coast is a step in the right direction to help reduce global reliance on Russia for oil, but with its vast resources and commitment to responsible development, Canada can do more.”
That pipeline will take Alberta stocks to the coast. The tankers bound for Asia won’t directly supply Europe, but will have a global impact on supply and prices. LNG plants can send natural gas in that direction, too, while plans for LNG terminals on the East Coast could eventually supply Europe directly.
“Canada’s federal government can change course to fast-track and champion major oil and gas export projects, signalling investors that Canada is the world’s energy solution,” says Jaremko.
There is of course the risk of allowing the petroleum industry to capitalize on the expression, attributed to Winston Churchill, that one ought not to allow a good crisis to go to waste. Making use of a crisis, natural or intentionally manmade, to work against the public good is precisely the playbook outlined in Naomi Klein’s Shock Doctrine, for instance. We must be careful.
That said, we’ll be continuing to use petroleum products for decades to come. The current situation with Russia adds to the energy concerns of relying on unstable sources, along with the morality of providing vast sums of money to regimes that are not worthy of a dime.
For now, defusing Friedman’s energy bomb and getting prices under control appear more pressing concerns than the often futile moves such as carbon taxes that are doing nothing to solve the climate crisis.
Which is the lesser of two evils just now?