OPINION: This week may go down in history books as a fateful one for Western Europe, and the wider world.
Germany is waiting to discover a destiny that, for a singular moment, is out of its own hands.
Russia — far less reliant on natural gas revenues than Westerners sometimes imagine — has reduced gas flows, creating a second wave of uncertainty and insecurity in Berlin and beyond.
The first wave came in late 2021, when a complacent European Union woke to discover that Russia’s Gazprom was passing up the opportunity to make extra bucks on soaring prices and sticking to strict contractual limits.
The simple act of doing something different to familiar practice seemed enough to wrong-foot EU leaders who were clearly not paying attention to the messages that Russia has been sending about its overriding strategic aims.
That time, it was reduced flows along the Yamal and Ukraine transit systems that caused gas markets to tighten.
This time the focus is on the Nord Stream pipeline.
Russia began reducing flows several weeks ago, blaming repairs being made by Siemens Energy in Canada on a Nord Stream compressor.
Gazprom subsequently issued a notice of force majeure for Nord Stream shipments, playing on German fears that supplies will not resume as planned.
Saving the day
Governments are often told they do more harm than good with over-regulation or interference in the economic sphere, but this is one of those moments when big government can save the day.
Europe has witnessed a scrambling into action at member state and multilateral level. Demand for Russian gas is falling, but a lot of work still needs to be done to fill the gaps.
For all their efforts to secure additional gas supplies and to boost investments in renewable energy, key European nations such as Germany, France and Italy must take decisive and painful measures to manage demand, as well as bailing out some key players.
There are models for doing this, such as Brazil's successful effort to flatten demand through efficiency incentives when the nation's hydroelectric capacity was affected by drought in 2001.
Russia’s President Vladimir Putin has turned disruption of adversaries’ domestic political terrain into something of a science, but the level of cohesion that EU nations and their allies have shown in a crisis has surprised him once and can do so again.
The die is cast
For Europe and the wider West, the die is probably cast.
The only way forward now is to press ahead with the parallel aims of developing clean energy even as the bloc works hard to secure alternative supplies of oil and gas.
Russian threats may be unnerving, and the West may worry as Russia edges closer to China, Iran and others, but Europe and Washington still hold some trump cards, not least in the supply of gas from the US.
The main lesson to draw for Western democracies is that energy security requires a balanced and holistic approach to making energy affordable for the masses, even if this means retreating from decarbonisation targets.
Soaring prices, vicious heatwaves and the disgust that most people feel about war mean the global population is primed and ready, as never before, to support energy transition.
This retreat, if that is what it is, must be a strictly temporary one. The world wants affordable and clean energy and this is an attainable objective.
The EU, in its moment of difficulty, can — and should — make this breakthrough.
(This is an Upstream opinion article.)
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