The energy crisis

For years, the Western world saw profits in new green and renewable energy sectors and sang from their hymn book on the need to reduce carbon footprints by ditching fossil fuels, or to avoid a potential Chernobyl-style environmental catastrophe by ditching nuclear power. Western officials were going to either earbend their citizens or drag them kicking and screaming towards a new world rife with questionably executable green dreams – all in the interest of supposedly preventing Earth’s temperature from rising by 1.2 degrees Celsius from pre-industrial levels. Good luck controlling the temperature of your own room to within a single degree for any length of time, let alone that of the entire planet. Still, officials agreed on the pretext for the green shift, however dodgy, and forged ahead with their new investments and ventures. The European Green Deal was a centerpiece of the Western strategy, with €1.8 trillion euros of investments.

It’s now clear that the EU has failed to scale up their projects in time to offset the disastrous energy crunch caused by their genius decision to sanction their own gas supply from Russia in order to stick it to Russian President Vladimir Putin. Unfortunately for the EU’s top economy, Germany, it had bet a few too many of its chips on domestic green projects without any obvious alternative to its reliance on energy imports (and particularly on Russian gas) to power Europe’s primary industrial engine.

German Chancellor Olaf Scholz has since been scrambling – burning up phone lines from Qatar to Canada – in an attempt to find alternative sources, with no immediate solution in sight. Meanwhile, German industry is warning of shutdowns while authorities brace for energy and water rationing and what’s shaping up to be a very tough and precarious winter.

Berlin can’t even get repaired parts back from Canada for its own Nord Stream 1 joint pipeline with Russia because of Western anti-Russian sanctions blocking their shipment. Of course, there’s another option that’s literally just laying around – Gazprom’s Nord Stream 2 pipeline, which had been sanctioned by Washington in a power move against the EU economy even before the Ukraine conflict. Germany refuses to fire it up. Because, what’s a little national energy emergency when you can force Putin to have to flip a switch to redirect the gas to another nation state client, right? That’ll teach him, for sure.

Next door, in France, officials of the EU’s second biggest economic engine have been cheerleading Western solidarity and anti-Russian sanctions, all while Paris has been discreetly enjoying its position as the top importer of Russian liquefied natural gas.

If the hypocrisy of playing footsie under the table with Russia while whispering sweet promises of more weapons to Ukrainian President Volodymyr Zelensky wasn’t amusing enough, the EU has also been trying to figure out a way to revert to old energy habits while pretending that they’re still on a green path.

The energy shortage due to sanctions amid the conflict in Ukraine has created an even more desperate need for a U-turn on the limitations of green and renewable energy. Which explains why the EU parliament voted this month to officially move the goalposts on what constitutes green energy by simply changing the labeling of investments in gas and nuclear energy to 'green'. You have to almost feel sorry for environmentalists. What’s next? Will Germany’s recent reversion back to dirty coal in its desperation for energy sources soon be reclassified as green, too? At this rate, nothing would be surprising.

Imagine being an environmentalist in a Kafkaesque conversation with an EU official who’s trying to tell you that fossil fuels are now 'green', as is a potential future Chernobyl, even though their official policy had long been the exact opposite. You’d feel like you were being gaslit in the same way that a partner would argue that you must’ve imagined that you saw another person’s text messages on their phone.

Some officials are trying to at least pay lip service to the idea of sticking with their climate agenda, while backpedaling hard and fast on the strategy in reality. Perhaps they’re hoping that people just don’t notice or care too much amid such a dire and costly energy shortage. German Economy Minister Robert Habeck is apparently one such official. “On the one hand, the climate crisis is coming to a head. On the other hand, Russia’s invasion shows how important it is to phase out fossil fuels and promote the expansion of renewables,” Habeck said in April.

But that lofty posture was before the impact of the EU’s own sanctions sent its member states scrambling – straight towards any available fossil fuels.

Changing semantics to suit economic interests to the chagrin of environmentalists arguably started with Paris. Before the Ukraine conflict, France had long felt the heat from environmentalists over its nuclear power plants, which were neglected and allowed to corrode, with a view of phasing them out and shutting them down, to replace them with greener renewable energy. But then French President Emmanuel Macron solved the country’s nuclear image and reliance problem earlier this year by successfully lobbying the European Commission to draft a proposal labeling nuclear energy and gas as green, just in time for Macron to promote a new French “nuclear renaissance” and the construction of 14 new nuclear reactors in his reelection campaign.

What was dirty is now magically clean, and what was the dirty past is now the promising future – all at the drop of a hat. Move over windmills and solar panels – the future of sustainable clean energy is natural gas fossil fuel and nuclear reactors in what’s clearly a triumph of pragmatism over ideology.

As Berlin, Paris, and other European capitals struggle to replace Russian gas while staring at a winter of potential energy shortages, all bets are off. Sorry, environmentalists. The EU no longer has the luxury of fussing with the wallpaper while the house is burning down.

www.rt.com/news/558790-eu-redefining-green-energy

The Hungarian government declared a state of emergency over tightening energy supplies on Wednesday. Gergely Gulyas, an aide to Prime Minister Viktor Orban, announced that domestic gas and coal production will be stepped up and gas reserves filled before winter.

With the EU cutting itself off from Russian energy imports, Gulyas told reporters that the bloc will likely not have enough gas from Autumn onwards. In response to the supply crunch, he announced a seven-point plan, effective from August.

Hungary will increase domestic gas production from 1.5 to 2 billion cubic meters, while filling the country’s storage facilities with foreign gas. At present, Gulyas said that the country's reserves are 44% full.

Meanwhile, his government will impose a ban on the export of firewood, while increasing domestic coal extraction. At the same time, the coal-fired Matra power plant will be restarted as soon as possible, having been partially shut down since January 2021.

The operating hours of the Paks nuclear power plant – which produces more than half of the country’s electricity – will be extended, while customers using more than an allotted amount of power will not be offered fixed rates. Price caps currently ensure that Hungarians pay six times less than market prices for power and eight times less for gas, according to government commissioner Szilard Nemeth.

Hungary relies almost entirely on Russia for its natural gas, and has opposed an EU embargo on the vital resource. Orban predicted last month that such a ban “will ruin the whole European economy.” Hungary has also opposed the EU’s phased withdrawal from Russian oil imports by the end of this year, and has been given a waiver to keep purchasing the fuel from Moscow.

With other EU countries – such as Germany – suffering economic turmoil after placing penalties on Russian fossil fuels, Orban’s government has lashed out at proposals from the bloc to share what little gas they have equally.

“Hungarian gas storage facilities will remain Hungarian property, we will use the gas in Hungarian gas storage facilities purchased with Hungarian taxpayers’ money in Hungary,” Foreign Minister Peter Szijarto said last week, adding that the gas-sharing suggestion “reminds us of communism.”

Despite a swathe of protectionist measures, Gulyas told reporters that Hungary will have to reduce its energy consumption. Similar announcements have been made in Germany, where officials have told the public to lower their heating thermostats and take shorter showers. In May, the International Energy Agency warned of impending fuel rationing across the entire continent.

www.rt.com/news/558914-hungary-declares-energy-emergency

International ratings agency Moody’s said on Wednesday that Germany’s target of reducing its dependency on Russian gas to 10% by 2024 will be difficult.

“While Germany has already gradually reduced its reliance [on Russian imports] from 60% in 2020 to 35% by mid-April, reaching the 10% target means replacing about 42 billion cubic meters, which will not be easy,” the statement reads.

The agency also warned that a halt to Russian gas would considerably weaken growth and fiscal metrics in both Germany and Italy. Moody’s cited negative economic impacts that will increase the two countries’ debt burdens.

Germany hopes Russian gas supplies will resume
Read more Germany hopes Russian gas supplies will resume
“When looking at Germany and Italy, the immediate economic repercussions of Russia’s plan to restrict supply in mid-June are likely to be limited,” Moody’s said, noting that if Russian deliveries do not restart when maintenance on the Nord Stream 1 gas pipeline is finished at the end of July, there will be an increase in energy prices. The governments then will have to implement some type of energy rationing, it warned.

According to the report, Italy’s financial situation will probably be worse if it is completely cut off from Russian supplies. However, the country is better positioned because of its diversification of supplies and could achieve a phase-out of Russian gas by 2025 thanks to pipelines to North Africa and LNG terminals.

Gas reserves in both Italy and Germany are enough for one month of winter, and there are no guarantees that the reserves will be used for domestic consumption only, the agency said.

www.rt.com/business/558969-moodys-germany-energy-russia

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