Peter Foster: How EU Climate Policy Served The Russian Bear

  • Date: 26/03/14
  • Peter Foster, Financial Post

Europe’s commitment to green energy has been expensive and disruptive and left it comprehensively exposed to Russian blackmail

It seems hard to believe that a decade ago, former state oil company Petro-Canada (since acquired by Suncor) was contemplating building an LNG plant near St. Petersburg to export Russian gas, possibly to Canada.

If that plant had been built, and there had been no North American shale gas revolution, perhaps Stephen Harper would not have been shadow boxing quite so much above his weight on the G7 sidelines of this week’s nuclear summit in Europe, which was dominated by Russia’s annexation of Crimea.

Russia’s strategic strength in Europe springs (apart from its willingness to use force) from the fact that the EU has been asleep at the energy policy switch, blinded by its climate obsessions. While policy makers have been focused on the angels’ pinhead of sustainability, and postured against “intergenerational tyranny,” Europe has disarmed itself in the face of very real this-generation tyranny.

Europe’s commitment to green energy has been not merely expensive and disruptive – without measurable impact on climate – it has left the EU comprehensively exposed to Russian blackmail.

Europe has relied on Soviet/Russian oil, and more recently gas, for a century, and Russia has played its energy card skillfully. As Oxford University economist Dieter Helm notes in a recent Energy Futures Network Paper, Russia has embraced its customers and clients in a strategic “bear hug.” It has carefully cultivated a “special relationship” with Germany (Former Chancellor Gerhard Schroeder approved a gas import pipeline from Russia then retired to head the pipeline company). Mr. Putin uses gas giant Gazprom as a political instrument. Russia has also developed close relations with many energy Western energy companies, who are disturbed by saber rattling on either side. Sanctions might not mean much to Stephen Harper but they mean a lot to German companies, a fact no doubt that Chancellor Merkel will have stressed to the Prime Minister this week.

Bringing Ukraine into line has been more urgent for Russia since the “Orange Revolution,” which threatened to pull the former Soviet Republic further into the Western democratic orbit. Transshipped gas has been Russia’s trade weapon of choice. It has used it on several occasions, by disrupting supplies in 2006 and 2009, by bypassing and isolating Ukraine with new pipelines, and by blocking gas lines to Europe from other former Soviet Republics. Ukraine has also been kept from NATO membership (like Georgia) by naked demonstrations of Russian force.

While Russia was flexing its muscles, Europe was fretting about controlling the weather a century hence. The EU claimed that the promotion of wind and solar would enhance security. In fact, their congenital unreliability has inevitably contributed to greater insecurity. Meanwhile the one technology that would have increased security, nuclear, is being phased out.

Professor Helm notes the irony that the only enhancements to European security have come from economic decline, which has led to excess solar and wind capacity, and from coal, which makes ‘a mockery of the “greening” of Europe’s energy sector,’ especially since fracking faces continent-wide bans and demonstrations.

Meanwhile dependence on Gazprom has grown.

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