The Euros are screwed. Face off against Putin and they could go dark and cold. Let him have his way with Ukraine and it could be them next and he could still shut off their energy.
They were warned this could happen, yet they persisted in killing their nuclear reactor programs and relying on the Kremlin for energy. Now, it’s time to pay the piper. Phil Flynn of FBN clarifies.
Putin is Stalin reincarnated. NATO can’t figure out what to do. Nord Stream 2 Pipeline is too strategic to Europe. Germany heavily relies on Russia for its Gas supply. For now, Putin have all the cards to play, & he’s boxed NATO into a corner. How will this Cold War be resolved?
— NEFERTITI (@firstladyship) February 11, 2022
Flynn: As a war between Russia and Ukraine seems more likely, so does a shock to global energy markets. Oil rose for the eighth straight week, topping $93 per barrel on Friday.
Russian President Vladimir Putin has Europe in his back pocket. With rash decisions to reach net-zero emissions by 2050, investment in oil fields has fallen off. At the same time, Europe cut the use of nuclear power, which ironically does not emit greenhouse gases. Those decisions could have long-lasting consequences for the continent and the world as Europe has ended up sacrificing its ability to create its own energy, playing right into Russia’s hands.
Brent, the global benchmark, hit $94 per barrel. Germany is one of the main examples of this craziness after it decided that nuclear power was too dangerous and vowed to replace it with renewable energy. Yet, Germany found it is not possible to replace the power from its 19 nuclear reactors with renewables, and so it had to look for alternatives. The best alternative it found was natural gas. Yet, the country could never produce the amount of natural gas it needs, so it decided to look to Russia as a supplier.
That’s why the $11 billion Nord Stream 2 undersea pipeline between Russia and Germany is being used as a political weapon as Russia has seemingly held back supplies to Europe, not only to make more money but as a reminder of its energy dominance. It was also a warning to Europe that it had better be careful if it decides to disrupt Russia’s ambitions in Ukraine.
Over in the United Kingdom, wind and solar transition failed, so now it’s more reliant on energy imports. The wind was generating 25% of England’s supply, but when the wind stopped blowing, it dropped to just 7%, prompting electricity prices to jump to all-time highs.
The impact of this alternative energy folly is evident in data from the Energy Information Administration. European Union imports jumped back to 65.5% this year, and on top of that, 38% of the natural gas used by the EU in 2020 — and over 40% in 2022 — was imported from Russia, according to Eurostat.
The Biden administration says the U.S. will prevent Nord Stream 2 from coming online if Russia invades Ukraine. Yet if Russia then cuts off natural gas and oil supply in retaliation, can it be replaced? Maybe, if foreign natural gas and oil producers heed the Biden administration’s plea for help. The U.S. could assist, but it’s unclear why we are not leaning on the domestic energy industry.
Many experts know that if Russia decides to cut the supply, it would almost be impossible to replace. At the same time, a war could critically damage energy infrastructure in the region that could take years, if not decades, to fix. Not to mention the human cost of war that is devastating. In Europe, backup energy supplies are at historically low levels, and that is partly by design.
If there is indeed a war between Russia and Ukraine, the world could experience one of the worst energy price spikes we’ve seen since the 1970s that could drive the world into recession, and it could push Europe back into a new Dark Age where it can’t keep the lights on.
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