Fuel price goes up, so Putin gets rewarded for invading Ukraine
Posted: 28th February 2022
Today America, the EU and UK will together buy £200 million of gas from the Russian state-owned Gazprom, as well as £300 million of oil. After the invasion started, exports of gas through Ukraine — the route of the key pipelines to the rest of Europe — increased, jumping 38 percent overnight. The gas price, already at a record high, soared. So much for sanctions. Indeed only last month Sir Dieter Helm, energy economist at Oxford University, predicted this price rise would mean Russia’s income would increase when Putin attacked. “Invading Ukraine may actually be self-financing,” he wrote. Western leaders may bluster that they are making life economically harder for Putin, but the cold truth is that many are so reliant on his gas that they have arguably ended up handing him a bonus as a reward for bad behaviour. How did it come to this? How did Europe, in particular, become so dependent on Russian energy? Two opposing narratives have emerged. The first is that decarbonisation and the race to net zero are to blame. By prioritising wind and solar while allowing our gas supplies to dwindle, this argument goes, we have neglected energy security and allowed Putin to gain a huge strategic advantage. Others argue our green policies have simply not gone far enough. It is our reliance on fossil fuels that has played into Russia’s hands, they say. If we had invested in windpower earlier, if we had embraced heat pumps and developed energy storage, the gas market and Putin’s dominance of it would be irrelevant. So which interpretation is right? Richard Black, founder of the Energy and Climate Intelligence Unit, said British ministers had led us into a limbo with an energy policy that paid lip service to the idea of decarbonisation but did not embrace it wholeheartedly. Black pointed to ministers’ repeated failure to insulate properly our leaky housing stock,the moratorium on onshore wind under David Cameron, and the failure to put solar panels on industrial buildings. “They’ve done it half-heartedly and that’s why we’ve got into this mess,” he said. “They say they want to be in the fast lane of the motorway, but they’re going along in third.” Times 27th Feb 2022 https://www.thetimes.co.uk/article/is-addiction-to-russian-gas-because-were-going-green-too-fast-or-too-slow-86jk2w3hf
Russia and Fossil Fuel prices
Q&A: What does Russia’s invasion of Ukraine mean for energy and climate change? Russia’s invasion of Ukraine is inextricably linked to the global energy crisis. With wholesale gas prices already at extremely high levels, in part due to Russia’s actions, the attack on Ukraine has prompted widespread debate over how to respond. As a major humanitarian crisis has unfolded, there have also been fears that climate action could be relegated by world leaders to an afterthought. Concerns over energy security are particularly acute in Europe, which is heavily reliant on Russian exports of coal, oil and gas. Two major narratives have emerged in response. Many, including leaders from the European Commission’s Ursula von der Leyen to the UK’s Boris Johnson, have emphasised the need to accelerate the rollout of clean energy technologies. Some politicians have coupled this with calls to boost domestic fossil fuel supplies, so as to reduce the need for Russian imports. Meanwhile, climate sceptics have made domestic oil and gas their sole focus, in some cases going so far as attempting to argue that clean energy is part of the problem. In this Q&A, Carbon Brief rounds up the best charts, analysis and commentary on what Russia’s invasion of Ukraine means for energy, commodities and, ultimately, climate action. More than a third of Europe’s gas supplies come from Russia, according to the New York Times. It has produced a map showing how Russian gas exports are received across Europe. While Europe is heavily reliant on Russian fuel supplies, Russia is in turn reliant on revenues from fossil fuel sales, which make up more than two-fifths of government revenue. According to Javier Blas writing for Bloomberg, the UK, EU and US collectively spend more than $700m a day buying Russian oil and gas. In the UK, up to 22million households could already see a 54% spike in energy bills – from £1,277 to £1,971 – on 1 April when the energy price cap is raised.Following the Russian invasion, many publications quoted figures from Martin Young, an analyst at the banking group Investec, who has stated that the energy price cap could hit £3,238 when it is next revised this autumn, if wholesale prices remain elevated. The publications cited concerns that Russia could “weaponise” its resources by restricting gas flows and driving up wholesale prices. Carbon Brief 25th Feb 2022 https://www.carbonbrief.org/qa-what-does-russias-invasion-of-ukraine-mean-for-energy-and-climate-change