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It's about time!


A former high school friend shared this article with me on facebook, in which Pres. Nauseda declared Lithuania completely free of Russian natural gas.  I wish we could say the same for gasoline but that will take longer to do, as Russia still remains the primary source of crude oil.  

Like it or not, the EU is far too dependent on Russian oil, gas, coal and timber.  There is no way to make a clean break, at least for the moment.  So now Putin attempts to extort the EU by making it pay in rubles, which he appropriately announced on April 1, in an effort to prop up his failing currency.  The EU has some leverage in that demand is falling, but not a lot.  We will only gain an advantage when we completely wean ourselves off Russian fuel supplies.

It makes you wonder where Europe got its gas and oil before the Soviet Union collapsed.  In the early 1960s, there was virtually no connection but temptation was great.  The USSR had begun to reach out to Europe, building an enormous pipeline from Siberia to the western border of the country.  The pipeline was dubbed Druzhba, or friendship, and was designed to supply Europe with cheap oil.  Pres. Kennedy tried to block the pipeline but could only get a handful of European countries to agree.  As a result, the pipeline became the first link between Europe and Russia, resulting in the oil and gas dependency we see today.

Still, supply was rather limited throughout the late Soviet era due to pressure from the United States.  Following the collapse of the Soviet Union in 1991, the trickle became a torrent, as Russian oil was much less than OPEC prices.  Natural gas was also cheap, so the EU began to gobble it up, believing that a new dawn had emerged and that Russia would become an integral part of the European economy.  However, Russia eventually joined with OPEC nations to control oil output to keep prices up.  It also began to tinker with gas prices, charging some EU nations more than others, depending on how much influence the Kremlin thought it could wield in a particular country.  Oil and gas became a political tool, often a bludgeon, with Russian state companies turning the tap on and off depending on whether or not it liked a current European government in power.

This was the case in Lithuania.  Russia would periodically close the gas pipeline down for repairs as a form of extortion.  For years, Lithuania had its "Chernobyl-type" nuclear power plants to fall back on but one of the conditions for EU membership was to decommission these plants, which it spent a small fortune doing.  After which, the government invested heavily in a Liquified Natural Gas terminal off the coast of KlaipÄ—da, so that it would no longer be reliant on Russian natural gas.  It took more than a decade to complete this project with the promise that it would not only reduce Russian dependency but bring the cost down.  Unfortunately, it only succeeded in the former.  Gas prices have skyrocketed since the terminal was completed in 2014, with our utility bills literally soaring through the roof.

It has taken even longer for the government to invest more in sustainable energy, but over the years more solar farms and wind turbines have been linked to the electrical grid so that now we see electric heat pumps replacing gas heating systems.  In due time we should be able to cut gas and oil dependency entirely, and have a much cleaner environment.  For now, Lithuania imports about 600,000 tonnes of crude oil per year from Russia.

The odd thing about this relationship is that Russia puts so little money of its own into these projects.  Much of the cost of these pipelines is financed by Western shareholders and energy companies.  For instance, Royal Dutch Shell covered a staggering 50 percent of the cost of Nord Stream 2, which connected Russian Gazprom directly to Germany, essentially rendering the gas pipeline that ran through Ukraine obsolete until the war broke out.   I don't think Putin expected Germany to go along with the EU in shutting down this pipeline after having invested so much money in it.  I guess he thought Gerhard Schroder still had some influence in German politics.

You just have to wonder why European countries are still so reliant on gas and oil when the EU has offered so many lucrative incentives to switch to sustainable forms of energy.  I suppose part of the reason is that natural gas is still viewed as a "clean" form of energy, as it doesn't produce the abominable level of carbon emissions associated with coal and oil.  So, countries like Germany felt they could buy time by resorting to natural gas while they slowly made the switch to sustainable forms of energy.  Germany is quite proud of having decommissioned its coal plants, and plans to shut down its remaining nuclear plants this year.  Ironically, Germany put itself in exactly the same position Lithuania found itself in 2009, when it shut down its nuclear plants before it had viable energy alternatives in place.

I can understand not wanting to build more nuclear reactors, but when you have serviceable nuclear reactors that offer relatively cheap energy and produce no carbon emissions, it would make much more sense to keep these nuclear reactors running rather than resort to natural gas until you can achieve more environmental friendly forms of energy.

The one upside to this war is that EU countries are finally making the push toward sustainable forms of energy that they have long been promising.  So far, the only EU countries to achieve an impressive level of sustainable energy use are Sweden, Finland and Latvia.  Lithuania is improving rapidly.  However, these countries amount to a small fraction of the EU population.  Lagging far behind are Germany, Spain, Italy, France and Poland, which comprise a significant portion of the EU population.  Given all the sunshine in Spain and Italy it is hard to understand why they haven't made a greater commitment to solar energy.  Poland still relies heavily on coal-burning plants, with much of its coal imported from Russia.  I suppose this is why Putin thought Poland would be amenable to his imperial ambitions, not taking into account that Poland remembers history even better than he does.

Will we finally see the long-anticipated switch to sustainable forms of energy, rendering Russian oil, gas and coal redundant?  The popular will is there.  It is just a matter of when European leaders will act upon it.  Then comes the question of what to do with all that pipeline under the Baltic Sea?

 



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