Filenews 18 May 2022
By Ken Silverstein
Nord Stream 2 should be compared to the Berlin Wall: generations upon generations of oppression are coming to an end and a new day is coming. If the shattered Wall symbolizes the fall of communism, the collapse of Nord Stream 2 embodies the death of autocracy and the rise of renewable energy sources.
Despite its dependence on Russian oil and gas, the European Union has signalled that it will accelerate its transition to the green era and disengage from the Russian economy. The bloc aims to increase the share of renewable energy to 32% by 2030 while moving away from Russian fossil fuels. "Tsar" Vladimir Putin poses a global threat not only to peace-loving countries, but also to environmental
security.
"Let's move quickly to renewable energy," urged Frans Timmermans, Executive Vice-President for the European Green Deal. "Renewable energy is a cheap, clean and potentially inexhaustible source of energy that, instead of financing the fossil fuel industry in other regions of the world, can create jobs in Europe."
The "Green New Deal" (2019) aims to reduce Europe's greenhouse gas emissions by 50% by 2030 and make the continent climate-neutral in terms of carbon dioxide emissions by 2050. If Europe 'steps on the accelerator' in this direction, it will cause economic turbulence, with a direct impact on individuals and businesses paying more for energy. But does Europe want that?
Nord Stream 2 is a project worth EUR 11 billion. dollars, designed to bypass Ukraine. It travels a distance of 1,200 kilometres to reach the German Baltic coast. Today he is "dead": the first victim in Russia's gratuitous war against Ukraine. Germany has now renounced Russian gas and is committed to becoming completely "green" by 2035. Meanwhile, the continent of Europe is stepping up its investments in energy efficiency and demand management.
Russia is Europe's largest gas supplier, covering 1/3 of its needs in 2021. The war will cut demand by 6%, the International Energy Agency predicts. At the same time, in 2021 the world added new RES units with a capacity of 295,000 megawatts (a record number), despite supply chain disruptions, delays in the construction sector and the rally in raw material prices. That number will rise to 320,000 megawatts this year. Europe increased the energy produced from RES by 30% in 2021 to 36,000 megawatts: numbers that are expected to increase.
"Tougher competition for LNG supplies is inevitable, as Europe reduces its dependence on Russian gas. However, the optimal and most permanent solution to today's energy challenges would be to accelerate energy efficiency in all sectors of the economy and accelerate the transition from fossil fuels to low-carbon energy sources," says Keisuke Sadamori, director of the International Energy Agency for energy market and security.
Where the U.S. is turning
But what are the implications for the US? Washington has banned imports of Russian oil and gas. Domestically produced natural gas replaces carbon and improves carbon dioxide emission levels.
President Biden wants his state to become climate-neutral to coal by 2050 — to do so he will have to abandon the use of fossil fuels and turn to energy consumption from RENEWABLES.
The American president is committed to helping the regions that are lagging behind in achieving this goal. The US needs to electrify its economy: from transport to manufacturing. In short, they need to make much more use of renewables to get rid of coal.
To that end, Joe Biden signed an executive order banning oil and gas exploration on federal lands. However, only 9% of U.S. production is made in private ownership. So Biden is focusing on slowing down the utilization of new energy sources and encouraging the use of existing sources. The oil and gas industry, however, argues that the time has come — with gas prices soaring — for Joe Biden to reconsider this policy.
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In this context, the U.S. Department of the Interior announced that it is cancelling planned sales of oil and gas leases to Alaska and the Gulf of Mexico. Republicans have sharply criticized the White House, while oil companies will not take the risk. In addition, the legal landscape is constantly changing. Oil and gas producers have 9,000 unused drilling licenses.
"The industry is free to use these licenses in how it thinks best. He just hasn't used them," Interior Minister Deb Haaland said while speaking to a House of Representatives Committee.
Will the United States continue to turn to cleaner energy or will it double its fossil fuel production to meet the increased demand from Europe and the rest of the world? The country will produce more and more quantities of natural gas for export. However, from 2030 onwards, global and U.S. markets will need more green energy.
The big oil companies may be "reading the signs"
The U.S. Energy Intelligence Agency estimates that the U.S. will increase liquefied natural gas exports to 12.2 billion cubic feet per day, surpassing Australia and Qatar, reaching No. 1 globally. However, it predicts that the share of renewable energy used for electricity generation will increase to 42% in 2050 from 21% today. Renewables will "prevail" of natural gas in the U.S. by 2030.
"The climate of uncertainty for other energy sources will work in favour of RES since they are a cheap source of electricity," joe Keefe, CEO of Pax World Funds, said in a morningstar report. "They have become very competitive in terms of price and are good long-term investments. Germany and other European states have an even greater incentive to do something with RES if access to Russian gas is compromised," he points out.
Russia will lose market share, but fossil fuels will not "evaporate". Energy, they make up 80% of the world's use. Nevertheless, the Russian invasion of Ukraine is a signal to the oil majors that they need to diversify: to make long-term purchases, to explore wind and solar energy, and to develop battery storage facilities and carbon sequestration infrastructure.
Chevron says it promotes hydrogen through strategic partnerships. These include a partnership with the US Department of Energy to explore the potential of renewable natural gas – gas from landfills, for example – to produce hydrogen. The oil company is working with Toyota and Cummins to create new hydrogen value chains for heavy trucks.
Meanwhile, Exxon Mobil has invested $10 billion in emissions-reducing technologies such as: carbon capture, battery storage technology and promotion of green hydrogen. In addition, BP says it will increase its annual investment in clean energy to $5 billion, and within a 10-year period of $500 million. 1/5 of the 1,000 oil and gas industry executives surveyed by DNV GL said its companies are already investing in hydrogen.
"The invasion benefits renewables more than it harms them," Shawn Kravetz, president of Esplanade Capital, notes in the Morningstar report.
Russia underestimated the power of the Ukrainian army and the will of its people. And now, he is taking a second lesson on the West and its desire to become green and climate-neutral in terms of coal.
Source: Forbes
