Europe’s Energy Hypocrisy!

Germany made global news recently when its government approved the demolition of a wind farm for the expansion of a strip-mining operation. The lignite operation will be used to supply formerly mothballed coal power plants being reactivated.

The governments of Europe have apparently forgotten that the 18th century de-forestation of its continent and other parts of the world was one of the key drivers behind the transition to burning coal for heating, cooking and transportation purposes. Today, in their zeal to get to their somewhat arbitrary “net-zero by 2050” climate goals, European leaders are turning back to this medieval energy technology to burnish their ESG scores.

According to the U.S. Energy Information Administration (EIA), the U.S. exported almost 664 thousand tons of biomass in August of this year, most of it in the form of wood pellets bound for Europe. The cutting of forests in the U.S. for this purpose is most heavily concentrated in the Southeastern region of the country.

Amongst all this, the Ukraine war has impacted global crude oil prices, which surged amid supply disruptions and sanctions imposed by the United States and its allies. Apart from being the world's biggest natural gas exporter, Russia is the second largest oil exporter after Saudi Arabia and a member of the Opec producer group that decided to cut output. Putin said that Russia planned to hold oil production and exports at current levels until 2025 and that Moscow would not cede its leading position in the global energy market despite Western sanctions.

Russian oil imports into the European Union and United Kingdom fell 35% to 1.7 million barrels per day (bpd) in August from 2.6 million bpd in January. But according to International Energy Agency (IEA), EU is the biggest purchaser of Russian crude oil.

This comes even as the EU has said that it will ban importing Russian oil from December 5 2022. It plans to ban seaborne imports of Russian oil with a phase-in period of six months for crude oil and eight months for refined products. The ban will most likely create a shortage of oil due to a general lack of spare crude volumes in the world. This would in total cover about 90% of Russian oil imports to the EU.

According to a report by Reuters, so far imports from the US have replaced about half the 800,000 barrels of lost Russian imports, with Norway providing around a third. Outside the EU, Russia's top crude oil export markets are China, India and Turkey.

As Europe’s mostly self-inflicted energy crisis spreads its ancillary impacts across the globe, the apparent hypocrisy present in these and other policy actions is becoming more than some developing nations leaders are willing to quietly bear. President Musevini points to another example of these conflicting priorities in his message to COP 27: “Now with Europe reinvesting in its own fossil fuel power industry to bring mothballed power plants back online, in a truly perverse twist we are told new Western investment in African fossil fuels is possible—but only for oil and gas resources that will be piped and shipped to Europe. This is the purest hypocrisy.”

It is a compelling point that is becoming increasingly difficult to argue against. As Europe continues to export its energy crisis to other nations that lack the financial resources to compete, fewer are going to be willing to try. Double standards and hypocrisy are the hallmarks of the West. And they like to preach to others about sanctions on Russia or Iran but quietly trade with them. Don’t they remember, it was also U.S. sanctions on Japan that started the conflict in the Asia-Pacific region resulting in WW2?

References:

Europe’s energy hypocrisy attracts increasing notice, David Blackmon, Forbes, 21 Nov 2022

Nearly eight months into Ukraine war, EU still biggest buyer of Russian crude, Times of India, 12 Oct 2022