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Opinion | How Putin Has Played His Energy Cards – The New York Times

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Opinion Writer
Almost as soon as the war in Ukraine began, in February, I found myself returning to an essay published online in Foreign Affairs in November. In “Green Upheaval,” Jason Bordoff and Meghan O’Sullivan predict that global decarbonization, while necessary, will not be the glide path to a peaceful green future that many climate activists imagine. They say that decarbonization will instead be a great disruption to geopolitics, in which many conventional assumptions about who would “win” and who would “lose” in the green transition would be shown to be naïve.
Bordoff, who was an adviser on climate and energy in the Obama White House and now co-leads the Columbia Climate School, and O’Sullivan, a deputy national security adviser to George W. Bush and now a professor of international affairs at Harvard’s Kennedy School, are both climate-conscious policy people and hard-nosed energy realists. Among the key propositions of their essay was that during the transition, as many wealthy countries backed away from fossil fuels, the power of petrostates would at least temporarily grow, since they would control a growing share of fossil energy supplies that much of the world still considered necessary.
To me, this suggested one way of understanding Russia’s invasion: an autocratic leader of a petrostate facing long-term decline but enjoying short-term strength and choosing to push his advantage while he still enjoyed it. During a visit to The Times to discuss climate policy last week, former Secretary of the Navy Ray Mabus made the same point: “One of the many gross miscalculations that Putin made was that Europe would not stand against this, because of their dependence on Russian oil and gas,” he said. A few days later, Cristiana Figueres, the former head of the U.N.’s Framework Convention on Climate Change and a central architect of the Paris climate accord, described Putin’s handling of Russia’s energy supply more bluntly to me: “blackmail.”
In mid-May — after Russia had suspended gas supply to Poland, Bulgaria and Finland — I spoke with Bordoff and O’Sullivan about how energy and climate may help explain the invasion and what the war has meant and will mean for the global energy landscape and the pressing project of decarbonization. (Since then, Russia announced it would cut off the Netherlands and likely Denmark, too, and the European Union announced a partial oil embargo in response.)
You wrote in the fall, before the invasion, that “today’s calls from European lawmakers for Russia to increase its gas output to avoid an energy crisis this winter are a reminder that Moscow’s importance to Europe’s energy security will rise before it declines.” You also wrote that a full green transition would mean that “the influence of the petrostates and Russia’s leverage in Europe will be diminished” and that Russia in particular would be left “worse off.”
Is it naïve to think that this sense of diminishing leverage might have shaped Putin’s choice to wage this war now, as opposed to a decade from now?
MEGHAN O’SULLIVAN: I think there’s certainly a case that could be made, and I’ve actually made it on other occasions. But I don’t know that it’s the strongest case. If you look at the investments that Putin has made over the last 15 years — that Gazprom or Russia has made — the effect has been to double down on gas infrastructure to connect Russia with Europe. And his strategic lens, going back to the mid-2000s, has been to try to reach the energy market in Europe without going through Ukraine.
Right, though even those investments are, among other things, investments in dependency and leverage.
O’SULLIVAN: There’s a good book by Thane Gustafson called “Klimat” on how climate change affects Russia and how the Russians have started to realize this climate change thing is real, relatively recently, and that it’s going to affect their markets with Europe, because of the more serious conversation in Europe about the cross-border adjustment mechanism.
That’s essentially a tariff on imported carbon or carbon-intensive products.
O’SULLIVAN: In the last few years, that conversation has taken on a real seriousness of purpose. And Russia is one of the countries that is going to be most affected by it. Russia has been aware for some time that Europe was going to move away from gas for climate reasons. But now the Europeans are talking about putting in place some mechanisms that might disadvantage Russian gas as soon as 2023. That’s really close. That’s not 10 years out. That might affect Russia’s leverage in a much shorter period of time. So there is that whole context.
The second thing I’d say is that we wrote that piece before the Russian invasion. We were talking about Europe becoming more dependent on Russian gas before it becomes less dependent, but already at the time it was obvious that Russia was creating more of a crisis by holding back on providing needed gas to Europe — gas it wasn’t required to provide by contract, but which it would have historically provided. So Putin was creating the grounds for this energy crisis — and his strong energy hand — well before the invasion.
In retrospect, it could look even like an effort to gain more leverage.
JASON BORDOFF: I think there were several factors that are probably more consequential than energy and climate in what drove Putin to do what he is doing. But in the broader context, the point we were trying to make was, when it comes to climate ambition and climate reality, we’re obviously having a large and growing — not a shrinking — gap. You’ve written about that eloquently. We’re going in the wrong direction. The likelihood that Europe might get completely off of natural gas — I don’t think was the base case before this all happened. And Russia is the cheapest source of gas, so we were still going to have a sizable volume of gas going into Europe.
O’SULLIVAN: I do think that’s a relevant backdrop.
Europe’s energy dependence on Russia, you mean.
O’SULLIVAN: But if I were arguing on the other side, that the energy situation might have led Putin to wait rather than rush ahead, I would say, if Putin was really being strategic, he would have waited for Nord Stream 2 to be up and running.
That’s the Russia-to-Germany gas pipeline that was all but ready to open, then pulled offline just as the war began.
O’SULLIVAN: It’s just so crazy he didn’t wait. He would have been in a much better position. And had he waited until more gas pipelines were connecting Russia to Asia, he would have also been in a better position. This would have taken several years, but right now, it’s just a tiny bit of gas that can be redirected there.
Which means if Russia can’t sell its gas to Europe, it won’t be so easy to sell it elsewhere.
O’SULLIVAN: He would have had even more leverage if he’d waited. But I think that just speaks to his idea that there is nothing that would lead Europe to shut down these energy flows. I think he really had confidence that dependency really brought him immunity.
It seems to me he still feels it gives him the upper hand, even if it hasn’t given him immunity like it did in 2014 when he invaded Crimea with almost no response from Europe. Now Putin is the one taking more aggressive actions on supply — it’s Russia who began cutting off exports, country by country, before Europe started blocking any imports.
Early on in the war, there was a lot of enthusiasm in the U.S. and across Europe about how much was being done with sanctions — how powerful these unprecedented sanctions have been. But while there are a lot of different ways of tabulating that impact, in general I think it’s been smaller than was expected — Russia’s trade surplus is at record highs, for instance.
BORDOFF: I think the sanctions have had a somewhat bigger impact than that.
O’SULLIVAN: I agree. But neither of us is going to challenge your overall thesis: This has all given Putin an enormous security blanket. There’s no question about that. If these energy relationships didn’t exist, this would be a very different story. We’d be looking at a very different landscape.
BORDOFF: And obviously the Europeans and the Americans — for the most part, with very small exceptions — chose not to sanction Russian energy supplies precisely because that would have been too economically painful for them.
Can you explain that?
BORDOFF: Well, the basic goal of sanctions is to impose pain on your target while minimizing it on yourself. In an integrated global economy, that’s kind of hard, because there’s lots of interconnections. If you cut people off from the banking system and they can’t export the stuff you need, well …
It hurts you, too.
BORDOFF: Plus, I just think the numbers with Russia are too large to think about doing it. And right now we’re in a market with almost no buffer of spare capacity, with limited extra ability to get oil from somewhere else.
So you’re basically choosing between Russian oil and no oil.
BORDOFF: Gas is even harder, because it’s even less of an integrated market, and in Europe a lot of it is pipelines.
You can’t easily move those.
BORDOFF: So if Europe were to actually have imposed secondary sanctions on Russia to cut off its ability to put any oil or gas in the global market, you’d be talking about a barrel of oil maybe hitting $150 or $200. And not enough natural gas to keep the lights and the heat on or to keep industry from rationing energy and producing a real economic crisis.
On all of this, Meghan was prescient in arguing two things quite early on. The first is, financial sanctions may exclude energy, but if you go after the banking system and the financial system, that is going to hit energy anyway. And there is a whole set of reputational issues with people doing so-called self-sanctioning: They didn’t want to do business with Russia on energy, even though it was allowed, because of perception issues.
On some level, that’s the most unprecedented thing — not the sanctions themselves, which are themselves unprecedented, but the voluntary, extralegal self-sanctioning done by individuals and corporations beyond them.
BORDOFF: The second thing is, that posture, We can’t go after energy because it’s too hard — it was simply unsustainable in the face of these horrific abuses we were seeing in Ukraine. And inevitably the pressure would grow, and then you couldn’t not go after energy, even though it would be painful.
O’SULLIVAN: I don’t think that the sanctions story is over. We’ve had Europe going back and forth on this oil embargo and the European countries are ready to do it with the exception of Hungary. And so they’re trying to figure out how to deal with that. But my sense is they will figure out how to do it. And you will have an embargo on Russian oil from the E.U.
So I think that the oil picture — that’s still not fully written. And I think it’s very interesting that Russia is doing this piecemeal sanctioning of gas, right? If Putin really wanted to impose a lot of pressure on the Europeans, he would just stop the gas flows to everyone right now.
So why isn’t he doing that?
O’SULLIVAN: I think there’s one good explanation: that he is trying to create more division within the European Union. That’s in his interest and that’s one tool he has to do it, whereas if he sanctioned everybody at once, it would be very galvanizing in Europe.
At the more macro level, we’re all still commending one another for the unity that this crisis has brought both within Europe and in the trans-Atlantic community. But there are little cleavages emerging, between East European countries and West European countries, with the East European countries — the Baltics and Poland — saying, why are you guys so slow? Why aren’t you tougher on Russia? And countries like Germany were saying, look, if we cut off gas, it’s 400,000 lost German jobs.
On the trans-Atlantic side, we could be moving into a new period. I think as this progresses and as Europe bears more and more of the costs of this, with the United States looking to be more and more the beneficiary — because of the huge quantities of natural gas it will be selling to Europe — that we’re going to be tougher on Russia than the Europeans are going to be. And if there’s a negotiation, the United States will want to keep sanctions on longer than the Europeans are going to want to.
The European Commission recently released a proposal for Europe to cut its dependency on Russian gas by two-thirds by the end of this year. Is that plausible, do you think? When I saw those numbers I thought, first, two-thirds is an awful lot to cut, and second, that still leaves one-third, which is still plenty of leverage, especially at the end of the year heading right into winter.
BORDOFF: I think it’s a very ambitious goal. It will be hard to achieve. And if the Russian gas supply were cut off by the end of the year, I think that would be more economically painful than some recognize. You’d be talking about needing to make plans for how to ration energy. Governments would need to be having those conversations now — and they are.
The second thing I would say is that half of that two-thirds reduction is supposed to come from imports of liquid natural gas. And there’s not that much extra LNG you can sort of ramp up and put in the market. So if it’s coming into Europe, it’s not going somewhere else. That’s why China’s planning to increase coal production by 300 million tons, and coal prices are already at incredibly high levels. And Asia’s going to be using more coal, and emerging markets and developing economies are really struggling to make it through the hot summer, made worse, as your book reminded us, by climate change. Typically, they rely on cheap coal for that, but there is no cheap coal anymore, and that all feeds into the food crisis and all the rest. So these things are all kind of interlinked in really worrisome ways.
O’SULLIVAN: The International Energy Agency put out its own report back in March, a 10-point plan for how to reduce reliance on Russian gas. It indicates that Europe can get off of a bit more than half of the Russian imports of gas right now but there’s a certain segment it will be exceptionally hard to do.
And then there’s the question of how clean or green doing that would be.
O’SULLIVAN: According to the I.E.A., roughly half of what Europe might do in the short term is actually consistent with its climate goals — these are things Europe wants to do already, and the war is just hastening the process. And then the rest of what can be done immediately is actually contrary to its climate goals — like a lot of bringing in new coal.
And it’s all well and good to take steps that bring us to a clean future more quickly. But the reality is that’s chapter one. And then there’s chapter two: Are we going to agree to increase our emissions in pursuit of that energy security objective and hope that we can make it up in the long term?
How do you see that playing out?
O’SULLIVAN: I think the debate in Europe is pretty interesting and clear on the long-term goals. But I’m more worried about what Jason talked about, in terms of the developing world and the coal usage there. And I think that’s a story that hasn’t really been written about: the reverberations from this conflict for the rest of the world. We’ve all been talking about what this means primarily in terms of Europe’s energy transition.
And there, even if there are short-term setbacks, you can still tell yourself a story in which, in the long run, this accelerates the transition by making clear the cost of doing business with autocrats and petrostates.
O’SULLIVAN: What it means for the rest of the world — there’s not a lot of silver linings there as far as I can see.
BORDOFF: And then, what happens if you take Russia off the board? Today, we still require a fair amount of hydrocarbons. Where are they going to come from? How do we think about meeting that need but also taking seriously the goal of 1.5 degrees, which comes from science and we shouldn’t waver on that.
I don’t want to say I’m hopeful, that’s the wrong word. But I have this desperate desire that we not lose the opportunity of this moment to remember that the things that give us energy security in the long run also can give us climate security. That has to be the message. Twenty years ago, we were able to talk to conservative national security hawks and left-wing environmental groups, both, about the need to reduce oil use because we were importing most of our oil here in the U.S. And then we had the shale revolution and we were a net exporter and energy was abundant and affordable. And we sort of lost the thread with a collective complacency about energy security being a risk. And now, of course, even though we are a net exporter, we’re still feeling pain at the pump.
But when something happens in Russia, we should remember that we would be more energy secure if we used less oil and gas in the first place. The political system in D.C. doesn’t seem that promising right now, but I hope this is a moment when Europe and the U.S. can remember we need to move faster to use less oil and gas in the first place.
Personally, I can’t really imagine a future in 2030 where Europe is importing Russian energy like they are today. But you seem less sure.
BORDOFF: Well, I think it’s a really interesting question. It’s one that I recently asked the European Union energy commissioner on our podcast. We have really short memories when it comes to energy crises. Europe is going to get energy from other sources, in the long term — solar and wind. But only about a quarter of Europe’s gas use is for electricity. Most of it is heating and industry, and the zero-carbon alternatives there — they’re not as cheap as natural gas.
So it seems impossible today to imagine that Europe would ever feel comfortable getting 40 percent of its energy from Russia again, but I don’t know. Four years, five years, six years, seven years from now, if Putin’s not in power and opposition leaders are in place, if something has changed and everyone’s sitting there saying like, well, my energy bills are really high. Do I still want to pay two or three times as much when there’s really cheap Russian gas sitting right next door waiting to come here? I’m wondering whether our memories will be short with this too.
I don’t think anybody is going to be building new infrastructure to try to connect Russia to Europe right now. I do think it’s a waning market. But it may take a long time to wane.
You hear quite frequently that Russia will just start pumping its gas in the other direction.
O’SULLIVAN: Many analysts have kind of jumped to this idea that Russia and China are kind of two peas in a pod and they’re closer on everything. And definitely, this is going to be a moment in the geopolitical order where the two are pushed more closely together. But I think there could be some unexpected twists and turns. Europe had 40 percent of its supply coming from one supplier. The Chinese are pretty emphatic about not having more than 10 or 15 percent come from an individual supplier. So the idea that suddenly Russia is going to become the gas station for China — I think there are some political limits on that.
Even so, it does call to mind something you wrote about in your “Green Upheaval” piece — the fracturing of the world between decarbonizing countries and those indifferent to climate concerns, potentially such a profound fracturing that they might find themselves almost operating in parallel.
O’SULLIVAN: I still do think that the real risk is exactly as we articulated there — that there is this gap. The countries that are able and have the political consensus and the wealth to transition more quickly, they transition more quickly. But there is a whole host of countries in many parts of the world that already had a much harder challenge than the developed world, because they have the additional element of energy poverty to deal with.
It was already hard to think about decarbonization in that context. And I think we’re already starting to see many of those countries that said they were going to move off of coal think about their timelines with a little more flexibility. China is among them.
Are those nations that might be using more coal over the next two or three years — are they going to also be using more coal over the next 10 or 20 years as a result of these dynamics?
O’SULLIVAN: I think it could persist for some time. That trajectory also depends on other factors like how quickly we can overcome many barriers that exist to scaling clean energy. And what role natural gas plays as a bridge fuel in the developing and emerging markets. It’s probably not the same role it might’ve played in the past, in the developed world.
I do believe this will accelerate a push for zero-carbon energy. Oil and gas, globally traded, inevitably expose you to geopolitical risk. And this conflict will remind people of that. And as we wrote in that piece, although clean energy can have its own geopolitical risks, they are likely smaller. And so you will see more of a push for things like Brussels telling countries they have only one year to permit renewable energy projects, because there’s a national security reason, not just a climate reason.
But two things can both be true. You can push much harder on clean energy and yet you’re still using a lot of oil and gas, just because of the scale and the numbers.
Roughly 80 percent of global energy still comes from fossil fuels today.
BORDOFF: So I think over time, you’re still going to have a lot of global trade in energy, but more of a focus on security of supply chains and some more diversification and more optionality to be able to pull supplies in as you need. But the thing I’ve been thinking about is, how uncertain this whole outlook is. Europe’s talking about Russia being really risky, about how we can’t depend on it because of Putin. So, they say, let’s go build electricity, transmission lines and green hydrogen pipelines to Algeria. Well, that’s not the most stable country politically, either. And you can kind of imagine, 10 years from now there’s a new leader in Russia and something happens in North Africa and everyone’s going to suddenly think differently about where security of supply comes from.
MEGHAN O’SULLIVAN: If you have Europeans and maybe Americans really getting even more serious on the transition, even more so than before, what does that mean? Are they talking about their own transition or are they talking about the global transition? Hopefully they’ll be talking about the global transition and that will mean an enormous effort to try to get finance into the developing world for clean energy projects there, which is so lacking.
Before the invasion, obviously there were big failures of reaching the $100 billion-a-year target.
That’s the green financing pledge made by the rich countries of the world to the world’s poor.
O’SULLIVAN: Which we know is insufficient as it is. So it’s just interesting to think, is one of the ways the developed world is going to get more serious that they’re going to be putting more money into the developing world? I haven’t seen any evidence of that yet because one of the other legacies of this invasion is likely to be a recession.
BORDOFF: But one other thing I also believe is true is from your book: There are going to be tipping points with this transition and tipping points in technology, and I have no doubt there will also be tipping points in social mobilization and the collective sense of urgency with the climate crisis. That’s going to happen. But I don’t know if it’s three years or five years or 10 years.
“Researchers took blood and tissue samples from 93 bonefish in Biscayne Bay and the Florida Keys since 2018, when the study started. They found each bonefish had an average of seven pharmaceuticals present, including blood pressure medications, antidepressants, prostate treatment medications, antibiotics and pain relievers, according to the release. One fish had a total of 17 different pharmaceuticals in its tissues.” (CNN)
“Because of global climate change, areas of Colorado, Utah and Wyoming could have much less water, and future hydrologic conditions may more closely resemble those of the arid Southwest regions of the basin today.” (Yale Environment 360)
“Forest Service fire investigators on Friday placed the blame for the Calf Canyon fire — one of two wildfires that combined to become New Mexico’s largest blaze — on a planned burn set over the winter that continued to smolder for months.” (The Washington Post)
“A man seemingly disguised as an old woman in a wheelchair threw a piece of cake at the glass protecting the Mona Lisa at the Louvre Museum and shouted at people to think of planet Earth. ‘Think of the Earth! There are people who are destroying the Earth! Think about it. Artists tell you: think of the Earth. That’s why I did this.’” (Associated Press)
According to one preprint study, an estimated 1.5 million adults in New York City were infected with the BA.2 and BA.2.12.1 variants of Covid-19 just between April 23 and May 8 — more than a fifth of the city’s population and about 30 times as high as the official case count. (CUNY study on medRxiv)
David Wallace-Wells (@dwallacewells), a writer for Opinion and a columnist for The New York Times Magazine, is the author of “The Uninhabitable Earth.”
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