Mar 12, 20228 min read

Fossil Fuels and War: Time for a Change?

Fossil Fuels, Civil Unrest and War: Time for a Change?

As I begin to write this article, my thoughts are still in pieces with how to start, I think: “is it going too far to blame the fossil fuel industry for instability and ultimately, war?” I swiftly answer: no, no it’s not. One of our writers recently analysed the role that fossil fuel subsidies have played in prompting civil unrest as seen in several nations from France to Kazakhstan more recently. This past week, the pictures of Russian tanks rolling across Ukraine seemed surreal, yet as many in the energy industry would know to commentate: almost inevitable. The short-term consequences of this travesty are slowly unfolding, with the loss of life taking the forefront, and in a less comparable manner, oil and gas prices spiking on the day of the Russian invasion - 24 February. The mid-term and long-term aftermath are yet to be seen or experienced, with consistently changing information appearing every hour.

To get something clear: this is not a war over fossil fuels, but it is one that has great implications both short term and long term in the ways we understand the role that renewable energy plays in powering our homes.

What I have previously labelled as the Russian chokehold over Europe, is now one of the biggest factors that has led to a deepening of the energy crisis, and the reveal of Europe’s weak energy policy. Europe’s undeniable dependence on predominantly gas imports (although roughly 10 percent of oil is also imported from Russia), has forced the bloc on its knees. Despite the fancy proclamations of sustainable development going hand in hand with energy security in the European energy policy and as part of the Green Deal, recent events have shown just how unprepared Europe was to face a war that was brewing for several months. There are now two alternatives for Europe to get back on its feet and to ensure energy security for its citizens (perhaps three, but two are based at home and the third depends on imports): first, to restart lignite production, second, to pump renewable energy, third, to replace its natural gas imports with LNG imports coming from the US, Qatar and Azerbaijan. Unfortunately, as many of us can guess: the former has taken precedent as the easiest solution, which underlines the sidelined role that renewable energy sources play, while revealing the true green(washed) hues of energy policy in Europe and the world.

What has happened in the world

In Greece, Energy Minister Kostas Skrekas said that lignite stocks can also cover the country’s electricity needs for more than 30 days despite the fact that most lignite-fired plants have been shut while some still account for 6 percent of Greek power generation.

Note: the rising energy prices preceding the Russian invasion of Ukraine, saw the use of coal surging over the winter which led to an increase in emissions while clean energy installations fell below the levels needed.

This is all the while Germany and Italy are considering firing up coal plants concurrently to their efforts to decarbonise - indeed, a paradox - to compensate for their losses in light of the war.

Meanwhile, 31 Member Countries of the Governing Board of the International Energy Agency agreed to release 60 million barrels of oil from their emergency reserves. This is the fourth in the history of the IEA, which was created in 1974 with previous collective action being taken in 1991, 2005 and 2011.

Despite Germany’s short term reliance on coal, the nation’s government concurrently announced the country’s aim to get 100% of its energy from renewable sources by 2035 in an attempt to ensure its energy security. The country’s Economy Minister Robert Habeck described this expansion as a key element in making the country less dependent on Russian fossil fuels.

As with many energy crises in the past, big powers such as the US have turned from imports to national production: today is no different to the early 1970s and history does repeat itself. The boom of US exports as a result of the revolutionary fracking technology in the early 2010s, have now led to what is perceived - although remaining debatable - energy independence in the US. Despite this, the US has been one of the closest and fastest shoulders to arrive for the EU to lean on during this new and exponentially deepening energy crisis. According to Daniel Yergin, the energy historian and vice chairman of IHS Markit “Europe would have basically caved” had it not been for the US supply of LGN - a clear reflection of the US gas exports that doubled between last November and January.

Some History Lessons

The fossil-based energy market is characterised by volatile prices. As I am writing this, the price of oil has reached 121$/barrel and oil jumped to $139 a barrel at one point yesterday: the highest level for almost 14 years as the US hints at a ban of Russian energy. As oil has become an essential commodity in the smooth functioning of global economic life, the price volatility that comes to characterise the market has also often hurt industrial and retail consumers. The spiking prices of oil lead to increasing inflation as the price of goods increases due to the higher prices of raw materials including energy.

If we take a walk down history lane, we can see that several Western nations have been there before: in 1973 during the Yom Kippur War, between 1979 and 1981 during the Iran-Iraq War, and several more including The Gulf War in 1990 where countries and consumers saw the price of imported oil doubling.

There is a relationship between oil and war and this is not just on price, but also the role that an energy-centric approach plays in escalating conflict. In his book, Jeff Colgan, director of the Climate Solutions Lab at Brown University, has laid down research that shows that countries with economies reliant on oil and gas exports, are 50 percent more conflict-prone than non-petrostates. Before Putin’s invasion, Russia’s finance ministry announced the profits that the country saw as a result of the high oil and gas prices.

Complexities & opportunities coming with renewable energy

Undoubtedly, turning to renewable energy in the time of crisis today is premature. There are still several issues surrounding the replacement of fossil fuels with renewable energy, which makes this a less feasible alternative in energy policy at the moment. Despite this, I am critical of the lack of preparedness to face an energy crisis accelerated by the Russian invasion - or frankly, any instability that may have involved Putin and his unstable regime. This is purely to do with the large European reliance on Russian energy sources. The conflict today showed that climate change and the role that energy plays therein are absolutely not in the ‘high politics’ agenda: hence the shift in lignite production in some countries following the slowly-approaching depletion of national natural gas and oil reserves.

The complexities with renewable energy can be indicated as such: without proper storage, we risk going back to depending on nature’s clock to meet our energy needs despite the fact that our demand peaks as the sun sets. We depend on the sun’s clock, or the weather’s winds, creating the opposite of energy supply security. This is what is called the Duck Effect. The graph shows the difference in electricity demand and the amount of available solar energy throughout the day. While some breakthroughs have been made, this transition cannot be done without sources of energy that can be stored including nuclear, hydrogen and (eeh) natural gas. I have spoken about the role of natural gas before, so, I will not get into it here. I have also discussed nuclear energy, and Ugurcan Turkkan will be talking about hydrogen. These are but a few examples of the ways that the shift to renewable energy is now feasible.

Quoting Bill McKibben’s article: “now is the moment to remind ourselves that, in the last decade, scientists and engineers have dropped the cost of solar and wind power by an order of magnitude, to the point where it is some of the cheapest power on Earth. The best reason to deploy it immediately is to ward off the existential crisis that is climate change, and the second best is to stop the killing of the nine million people annually who die from breathing in the particulates that fossil fuel combustion produces. But the third best reason - and perhaps the most plausible for rousing our leaders to action - is that it dramatically reduces the power of autocrats, dictators and thugs.”

The fossil fuel market is characterised by persistent market vulnerability to world events, with spikes occurring often, while the cost of solar has dropped by 85 percent since 2030 and the costs of both onshore and offshore wind have dropped by about 50 percent. European households equipped with solar panels are saving an average of 60 percent on their monthly electricity bills during this crisis according to the World Resources Institute. Renewable energy therefore acts as a buffer against the market forces that affect fossil fuels for residential and commercial energy users. Definitely, governments must expand and modernise transmission and distribution grids to increase efficiency and accessibility, while investing in solutions to address weather variability and energy storage solutions.

Briefly: the role that spiking oil prices play in building infrastructure for renewables

As a result of the inflation caused by the spike in oil prices, capital costs for renewables are also increasing while international and national oil companies are seeing higher returns. Further, Russia continues to be a large exporter of raw materials used in the construction of renewable energy infrastructure - letting the rift caused by the Russian invasion of Ukraine create another gap for the quicker development of renewable energy in Europe.

Closing Thoughts & Why The Fight Against Climate Change is a Fight Against War

The war in Ukraine has shown that Europe was not ready and perhaps not willing to face the climate crisis heads on through consistent investment coming prior to 2022. The concurrence between the war and the release of the newest IPCC report has highlighted the imminent nature as well as utility of the energy transition in accelerating climate change mitigation. Nevertheless, there is scarce political willingness to disrupt the status quo. Whilst the energy policy objectives to integrate sustainable development through the energy transition are definitely noble, they seem to be but words that are now evaporating as lignite powered stations and LNG production are taking the lead while renewable energy production and the opportunities that come along with it are now being sidelined.

For the case of Ukraine, I have written above that this is not a war for fossil fuels, however, some have argued that it may be. Svitlana Krakovska of the Ukrainian Hydrometeorological Institute says “human-induced climate change and the war on Ukraine have the same roots, fossil fuels, and our dependence on them.” Putin’s war machine is fueled by oil and gas - not that I doubt that we will find sustainable ways to wage war, because we definitely will - but echoing Jeff Colgan’s (director of the Climate Solutions Lab at Brown University), Putin’s war is funded by oil money that has allowed him to counter political opponents and build a strong military. Moving away from fossil fuels, therefore, holds the power to create a just energy transition with the aim of net-zero.

Sources:

Fossil Fuels and War: Time for a Change?

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