EU New Green Plans To Serve As Shot In The Arm For Russia, US
The EU, the self-declared crusader of green energy and sustainable development, has miserably lost the plot by greenwashing natural gas and nuclear energy as green energy sources for future use.
The so-called green transition move by the largest trade bloc in the world is going to aid the cause of the United States and its arch-foe Russia, which is also the EU's largest energy supplier.
The net gainer from the EU Parliament move, which on July 7 voted in favor of calling nuclear power and natural gas as green or sustainable sources of energy to make it easier for private investors to inject money, is going to be the U.S., which is set to reap rich dividends with the vast energy market in the EU.
If Russian energy giants are shown the door by the 27-member EU, the place will be grabbed by the U.S., which currently supplies nearly 5 percent of the EU gas demand.
From day one of the Russian invasion of Ukraine on Feb. 24, the U.S. has played spoilsport with the EU and saw to that Russia did not become too important to the EU. The U.S. move to sanction Russia and to stand against the commissioning of Nord Stream 2, which supplies energy from Russia to the EU, has much to do with this goal.
Nord Stream 2 would have opened a common pan-European market and would have resulted in a more considerable consolidation between Eurasian nations which house 70 percent of the world's population.
As the EU is going to take up natural gas and nuclear power as the transitional fuel, at least for Europe, the U.S. is eying the Russian supply of 25 percent of oil and 40 percent of natural gas to the EU.
Quoting the International Energy Agency, Bloomberg reported on July 1 that the U.S. supplied more natural gas to Europe than Russia by pipeline for the first time in June and filled up the gap created by Russia and its energy giant Gazprom which has slashed shipments through Nord Stream, its biggest pipeline to Europe. Moscow has also cut off shipments to EU nations that refused to comply with new payment terms.
"...the EU has imported more gas via LNG from the U.S. than via pipeline from Russia," IEA Executive Director Fatih Birol said in a tweet.
In March, the EU inked a pact to buy an additional 15 billion cubic meters of LNG from the U.S. this year in place of Russian gas. In a strategic move, the bloc is planning to replace a third of Russian gas with LNG from other sources, including the U.S.
Russia's war against Ukraine is paid for by climate-heating fossil fuels and the EU Parliament move will serve as a shot in the arm for the beleaguered Russian President Vladimir Putin.
Despite stiff opposition from others, it was Germany, the largest EU economy, that took the initiative to include natural gas, a fossil fuel primarily made of methane and a major contributor to the climate crisis, as green energy in the EU green taxonomy system.
Currently, Germany gets a third of its gas from Russia, and the new move will help Russia to continue getting billions from Germany and other EU nations to fund its war chest.
Paul Tang, a Dutch EU lawmaker affiliated with the center-left Social Democrats, criticized the EU plan and said that it was influenced by Russian state-owned energy companies, led by the "the lobby from Gazprom and Rosneft."
The EU is often called a world climate leader for its inspiring green energy initiatives. Under the new plan, natural gas -- a fossil fuel that typically emits less carbon dioxide than coal, and nuclear power, which is a low-carbon source of energy but produces harmful radioactive waste, are taken up by the EU over fears of an economic and political crisis in the next winter if Russia suddenly cuts off the gas or manipulates with its supply to the EU.
The possibility of a Russian tit-for-tat was hinted by European Commission President Ursula von der Leyen on July 6 when she urged countries to be ready if Russia completely cuts off natural gas supplies. Already there are fears over the Nord Stream 1 pipeline that it may not restart after a scheduled maintenance shutdown later this month.
Russia has already reduced gas supplies to EU countries, including Germany. Gazprom has reduced supplies through the Nord Stream 1 pipeline by 60 percent and supplies to Italy have been cut by half.
Ahead of the next winter, when heating demand rises, the EU is scrambling to fill its underground gas storage. At present, the EU's underground storage caverns are 60 percent full. With the new move, the plan is to reach 80 percent capacity by Nov. 1 as it plans to phase out Russian gas entirely by 2027.
The goal is to prevent the steady revenue stream of $850 million per day Russia was getting from oil and gas sales to the EU before the start of the war.
A complete cutoff of Russian supply would send gas prices soaring in the EU to the record level of 206 euros ($217) per megawatt-hour. At the start of the Ukraine crisis, spot gas prices were 19 euros per megawatt-hour.
The new norm will come into effect in 2023, unless 20 of the union's 27 members reject them, which is most unlikely.
In any case, the EU has already undermined its entire green credibility. The fear is that other nations and trade groupings also may pick up where the EU has left.