Was Russia’s decision to cut off natural gas exports a mistake?

“Despite Western powers’ broad condemnation of and efforts to isolate Russia, the country has managed to maintain ties and partnerships elsewhere around the world. In April, the UN General Assembly voted on a resolution to suspend Russia from the Human Rights Council over its invasion of Ukraine. The resolution succeeded after it received a two-thirds majority of votes from member states with 93 nations voting in favor of Russia’s suspension from the body. But 24 of the body’s members voted against the action while 58 members abstained from the vote altogether.

Results of the UN vote signify the complexities of real-world diplomacy even in the face of war. Countries in Africa, South America, and Asia have increasingly sought to resist taking sides as the Russia-Ukraine war threatens to shape the world into political factions. But the West’s waning influence in other parts of the globe, combined with economic and political interests at stake, has resulted in many nations opting to maintain their independence when it comes to relations with Russia.

In Asia, where growing vigilance over China’s increasing influence is shared across borders, nations in the southeast and the south of the continent have expressed their intentions to remain on good terms with Russia in spite of the situation with Ukraine. Among Russia’s most loyal partners is India, with whom it has maintained a strong relationship since the Soviet Union’s backing of India during the 1971 war with Pakistan, even as India remained officially non-aligned during the Cold War.

Another factor behind their continued friendship is India’s reliance on Russia as a military arms supplier — from the 1950s to now the country has received an estimated 65 percent of firearms exports from the Soviet Union or Russia, according to the Stockholm International Peace Research Institute. India’s border disputes in the Himalayas with China, which triggered a bloody clash in 2020, is another motivating factor for India as Russia has functioned as an important mediator in the conflict with China.

China, another key Russian partner, has refrained from condemning Russia outright, instead asking for the warring countries to reach a peaceful resolution. In a March virtual meeting with France and Germany, President Xi Jinping called for “maximum restraint” on the issue and expressed concerns over the broader impact of sanctions on Russia. But some, like Herrera, doubt how far China will continue to toe the line if the situation worsens.

“China has not said they would not abide by the sanctions and they are so far going along with the sanctions against Russia,” Herrera said. A potential turning point, she said, could be Europe’s next sanctions, particularly any secondary sanctions it puts out, which will be “a big crossroads for China to decide whether to participate with those.”

But its ties with Russia could still end up serving China economically. President Vladimir Putin has stated Russia will “redirect” its energy exports to “rapidly growing markets” elsewhere to help buttress against sanctions, perhaps an effort to maintain support from its key ally.”

The death of the gas station

“While some gas stations have taken the leap and installed charging ports alongside their pumps, people tend to do the lion’s share of their EV charging at home. And since EV chargers can be installed in almost any location that’s connected to the power grid — they’re now available in office garages and rest stops, and will soon be in some Starbucks parking lots — the gas station is increasingly unnecessary for some Americans.”

“To adjust this business model for the EV era, some gas stations are now installing Level 3 chargers, which can deliver as much as 20 miles of range per minute, alongside their old pumps and convenience stores. Some of these fast chargers make EV charging almost as speedy as filling up a gas tank the old-fashioned way, and they’re much faster than what people typically use at home. Several gas station owners who have or are installing Level 3 chargers told Recode that their goal is to become “fuel agnostic” and appeal to EV drivers as well as those with gas-powered cars.

But for many gas stations, the cost of an EV charger outweighs the benefits. The charger itself can cost tens of thousands of dollars, which is a tough expense for a small business. The overall cost can be much more, since installation often involves drilling through asphalt and laying electrical wiring, and sometimes gas stations also need to buy transformers to boost the overall electrical capacity of their sites. Chris Bambury, who operates several gas stations in California, told Recode that setting up just four EV chargers at one of his locations would have cost about half a million dollars if government and utility programs hadn’t covered about 90 percent of the bill.

An even bigger challenge is that gas stations already face intense competition from other public EV chargers. Data collected by the Department of Energy shows that, of the public charger locations the agency fully tracks, there are currently more public chargers located at hotels and inns, shopping centers, and government buildings than there are at gas stations and convenience stores. This is a limited picture of the nation’s charging network, and it doesn’t include the large number of chargers built by private companies like Blink, Electrify America, and Chargepoint. These companies also seem to prefer installing these chargers in places with parking spots connected to the grid, where EV drivers can find something to do while charging, like go to a grocery store or a restaurant.”

“But perhaps the biggest obstacle facing gas stations: Charging an electric vehicle is often as simple as parking it. Many EV owners buy chargers that plug into a standard home wall outlet just like their laptop or phone, and that virtually eliminates the need for frequent refueling trips. These are typically less expensive Level 1 chargers that take a few hours to fully recharge a battery, which is perfectly acceptable for charging a vehicle overnight. And since the average EV can travel 260 miles on a single charge, most people only need to plug their cars in once a day.”

“even if gas stations do install fast chargers, people who are traveling long distances may be their main customers. This situation is already playing out in Norway, where about 90 percent of new cars sold are now electric or hybrid. While gas stations have moved quickly to install charging ports, many EV drivers in Norway are only visiting them on a monthly basis.
The rise of EVs could actually lead to a new generation of pit stops. Some private companies, for instance, are opening their own luxurious destinations with multiple charging stations. Electrify America plans to open a series of flagship, EV-focused travel lounges with solar canopies and event spaces that could possibly offer valet services and curbside deliveries in California and New York later this year. Automakers are also experimenting with the idea of premium charging stations. In California, Tesla has already opened a charging hub for its vehicles that incorporates a lounge, an espresso bar, and free wifi. Porsche and Audi are developing similar plans for stations of their own.

None of this is necessarily surprising. New innovations often make old technology obsolete. After all, the phasing out of travel by horse also meant the demise of the horse-drawn carriage industry and the repurposing of stables. Now, after a century spent building complex infrastructure around gas-powered vehicles, another transition seems inevitable. This means that EVs aren’t just transforming the kind of cars people drive, but also where they take them.”

EU closes in on Russian oil ban — but how tough will it be?

“An immediate, full-blown ban imposed by the EU on oil is still a no-go for economic powerhouse Germany. Berlin has indicated to other EU capitals it’s ready to consider cutting Russian oil — even if it is not yet able to abandon imports of gas — but only under specific conditions, which are now being discussed with the European Commission.”

Can you believe the price of gas? States move quickly to help drivers

“Tymon said there’s no guarantee that savings from cutting gas taxes would be passed on to consumers, whereas other relief mechanisms would have more control.

“If you do suspend the gas tax, you’re stopping a critical source of revenue that’s used to invest in transportation infrastructure,” he said. “It doesn’t seem like it’s a good precedent to set.”

Environmentalists are worried that a tax rebate could be a perverse incentive for gasoline-guzzling cars to hit the road more in an age of worsening climate change.”

America can’t solve its gas price problem (or its Russia problem) with drilling

“Biden has done nothing to halt oil leasing. In fact, the Biden administration has outpaced Trump in issuing drilling permits on public lands and water in its first year, according to federal data analyzed by the Center for Biological Diversity. His administration set a record for the largest offshore lease sale ever in the Gulf of Mexico last year, before a federal court blocked the lease sale for not considering climate impacts.

There was a temporary pause on new federal leases in the first few months of Biden’s administration when he placed a moratorium on them while the administration reviewed how to better integrate climate costs in lease sales. Meanwhile, the president has done nothing to prevent the vast amount of gas production that occurs on private lands or halt existing oil leases on federal lands. The moratorium is now irrelevant, anyway, because a Louisiana federal judge ruled against it last June. (There’s a second, temporary pause on new lease sales because another court invalidated the administration’s use of a social cost of carbon.) The US also became the world’s largest exporter of liquified natural gas (LNG) for the first time in 2021.

Clark Williams-Derry, an energy analyst with the Institute for Energy Economics and Financial Analysis, offered a reality check to those complaining that climate regulations have changed the fate of oil and gas. “The idea that the tiny marginal changes in US policy have anything to do with the big shifts we’ve seen in prices is just preposterous,” he told Vox. The marginal Biden measures — like reversing Trump-era environmental rollbacks — haven’t made any kind of dent in the global oil market.”

“oil companies have made it clear in earnings calls with shareholders that they don’t plan to produce much more, anyway. Remember that just two years ago the industry was in a complete free fall when demand crashed because of the pandemic. Banks sought government bailouts for oil investments that went under, and oil prices actually hit negative levels as producers grew desperate for oil to be taken off their hands.”

““If the president wants us to grow, I just don’t think the industry can grow anyway.’’ The largest US fracking companies reiterated in earnings calls in February that they intend to keep output roughly flat, according to reporting from the Wall Street Journal.

In other words, now that companies are making handsome profits, they’re using that extra cash to reward investors and pay down debts, not invest in new production.”

“LNG exports don’t solve Europe’s or America’s energy challenges. In some ways, they exacerbate them.

To export gas to Europe, a facility first needs to convert it to liquified natural gas, which cools and pressurizes the methane so it can be shipped across continents. On the other end of the ocean, another facility must turn it back into gas for shipment via pipeline.

That’s a lot of infrastructure, which is impossible to scale up in enough time to make an impact on current prices. There’s one new LNG terminal that opened this year in Louisiana. On the European side, the LNG terminals are already at capacity. This isn’t going to help make up Russia’s supply of 40 percent of Europe’s gas either.

So it’s not particularly helpful or possible to boost exports to Europe, but it also wouldn’t help prices in the US.

Williams-Derry says that US exports of liquified natural gas have been the primary reason for climbing prices. In 2016, the US completed its first LNG export terminal in decades, which the gas industry hoped would alleviate a glut of natural gas that was keeping US gas prices too low for the industry’s liking.

“The reason we’re experiencing higher natural gas prices right now is we’re exporting more,” Williams-Derry said last week. “It’s not that we’re consuming more. It’s not that we’re producing less. It’s that we’re exporting.””

“LNG will always be the more expensive option because of its processing and transport. “By locking yourself into a gas-powered future, you’re locking in higher costs for the long haul,” Williams-Derry said. “There’s not a good alternative to Russian gas if you want to have inexpensive gas in Europe.”

“If you’re going to double down on gas, essentially, you’re doubling down on Russia,” Williams-Derry added.”

“The biggest risk is if the US and Europe respond to this crisis by over-investing in the future of fossil fuels. Actions like building LNG terminals and approving new leasing don’t help in the short term when people are struggling to pay high bills. It doesn’t achieve energy independence. But it would lock the world onto a dangerous path for climate change.”

How high can gas prices go?

“The US is not a major consumer of Russian crude oil, which makes up less than 4 percent of US consumption, so banning imports shouldn’t have a huge effect; the US doesn’t import any Russian gas. The US can make up the oil gap with imports from other countries, and the Biden administration already is pursuing that path by opening talks with Venezuela. Nor is Russia all that reliant on the US, because US purchases account for about 9 percent of its exports.

The bigger impact on the price of oil comes from what Biden’s announcement portends. Global oil prices have been fluctuating wildly in recent days, reflecting that there is a wide range of uncertainty over what could happen next. One of the uncertainties is whether more countries will follow the US’s move to ban imports, taking Russian oil off the table for a number of foreign markets. Cutting out Russia makes oil more expensive, because it upends the existing network of pipelines and makes countries’ paths to getting oil longer and more expensive.”

Putin Has a Big Piece of Leverage Over Europe. Here’s How to Take It Away.

“Europe does not need to be this reliant on Russian gas. A look back at the last 20 years reveals a series of decisions — notably by Germany, but also by decision-makers across the continent — that created the present-day vulnerability. While some of these choices can’t be undone, Europe can still learn from history to reduce its vulnerability to energy-market manipulations driven by geopolitics. Just as the United States during the 1970s invested in emergency oil reserves to insulate itself from the effects of Middle Eastern oil embargoes, Europe should do the same with natural gas. The lesson of that era is that it’s not just the amount of energy supply that matters; countries also need to invest in resilient systems to fall back on when a crisis occurs.

What’s more, energy security doesn’t have to come at the price of climate goals. Contrary to what some commentators have suggested, this isn’t the time for Europe to revert back to its own fossil fuels. Instead, by continuing to invest in renewable energy while prioritizing a system that can withstand shocks, Europe can do both: keep phasing out fossil fuels and weaken Russia’s hold over its foreign policy.”

“Three critical decisions in recent years made Europe dependent on natural gas and, therefore, vulnerable to Russian machinations. The first was Germany’s momentous decision to phase out its nuclear reactors in the wake of the 2011 Fukushima disaster. Eliminating nuclear energy, which does not emit greenhouse gases and has an impeccable safety record in Western Europe, put enormous pressure on the rest of Europe’s energy supplies. Had this choice not been made, Europe’s energy system — which includes the electrical grid but also other components, like the energy used to heat buildings and fuel transportation — would be less dependent on imported natural gas.

The second key set of decisions, by Germany and the EU, was to allow the Nord Stream 2 pipeline to be built. The natural gas pipeline, which connects Russia to Germany directly, is not yet operational, and the German foreign minister has explicitly threatened to block it if Russia invades Ukraine. Still, Scholz has yet to say the same, and Nord Stream 2 has some powerful backers, including former Chancellor Gerhard Schröder, who sits on the board of directors of multiple Russian oil and gas companies. Anticipating the pipeline’s completion, the rest of the German system has made investment and planning decisions that curtail the amount of other energy available.

Germany’s moves took place as the EU was trying to lower the cost of gas by increasing market competition. One tactic was to make it easier for global suppliers to compete by favoring “spot markets” with tradable contracts over long-term, fixed contracts. As intended, the policy lowered the average cost of energy in Europe. The unintended side effect, however, has been to make the natural gas system more fragile and vulnerable to manipulation.

The third key decision was a failure across Europe to invest sufficiently in natural gas storage and pipeline interconnections that could serve as a buffer in the event of an emergency. Storage tanks and pipelines can hold reserve energy to make up for a shortage, while pipeline interconnections can resolve shortages in some parts of the system by temporarily flowing natural gas from others. Both are expensive to build and maintain, though. True, some real progress has been made increase interconnections, as energy expert Andreas Goldthau points out. But the system remains vulnerable in case of emergency: In mid-December, Europe had roughly 690 terawatt-hours of gas stored, but one analysis suggested that under certain conditions such as an extreme winter, it could need more than twice that amount. (Fortunately, this winter has been relatively mild so far.)”

“It is true that the gradual transition from fossil fuels to wind and solar creates more demand for “bridge fuels” like natural gas or nuclear power. But energy security is not at odds with climate ambitions, so long as a country invests in sufficient emergency supply capacity to ride out potential market manipulations like Russia’s.

How do we know that gas vulnerability could be solved this way? Because the same thing happened with oil in the 1970s. Then, the West was vulnerable to oil embargoes, just as Europe’s gas supply is vulnerable now. Before 1973, oil-exporting petrostates regularly used embargoes or boycotts to try to coerce target countries to make geopolitical concessions, with varying degrees of success, as I discuss in my book Partial Hegemony. But after the massive disruptions of the 1973 oil crisis, the United States and Western oil consumers got serious about oil storage. The United States created the Strategic Petroleum Reserve, which still exists — in fact, the Biden administration released oil from these reserves to ease an energy crunch in the fall. Japan, Germany and the other members of the International Energy Agency (IEA) also created oil reserves in the 1970s and agreed to coordinate with the United States on how to use them. The effects were dramatic: Petrostates immediately stopped trying to enact embargoes, and major oil consumers have not faced import shortages ever since.”

Ukraine crisis prompts Germany to rethink Russian gas addiction

“Behind the rude awakening on energy security lies an even more unsettling realization for many German elites: That a decades-long goal of bringing Berlin and Moscow closer together through mutually beneficial trade seems to have failed.”

“The idea that growing trade links with other nations would help to gradually embed Western democratic standards in those countries has already taken a hit when it comes to China, which has only become more and more repressive despite growing economic links. Still, leading German politicians have long held out hope that “Wandel durch Handel” might still work with Russia, and defended Nord Stream 2 as a tool to also influence Russia for the better.
“Obviously, this policy has totally failed when it comes to Russia,” said Marcel Dirsus, a non-resident fellow at the Institute for Security Policy at Kiel University. He argued that instead of influencing Moscow by making Russia more dependent on Germany, the policy had the opposite effect.

“Right now, when push comes to shove, Berlin is dependent on Moscow when it comes to energy, and that influences the way it positions itself,” he said, referring to Berlin’s initial reluctance to include Nord Stream 2 in potential sanctions against Russia in the case of further aggression against Ukraine.

It took weeks of internal bickering and harsh international criticism before Scholz’s Social Democrats agreed to put the pipeline on the sanctions table.

“Now, they are coming to this realization [that they are too reliant on Russia] and now they are also admitting it in public, but now it’s too late,” Dirsus said.”

Texas went big on oil. Earthquakes followed.

“Seismologists say that one of the state’s biggest industries is upsetting a delicate balance deep underground. They blame the oil and gas business — and particularly a technique called wastewater injection — for waking up ancient fault lines, turning a historically stable region into a shaky one, and opening the door to larger earthquakes that Texas might not be ready for.

The state is finally trying to change that. In December, the Texas Railroad Commission — the state agency that regulates oil and gas operations and no longer has anything to do with railroads — suspended wastewater injection at 33 sites across a region where more than half a million people live. This is a notable turnaround for the Railroad Commission, which until recently did not acknowledge a link between oil and gas operations and earthquakes, and might be a sign of just how serious the earthquakes have gotten.”