Adam, I congratulate you for writing with conviction. This is a brave, thought-provoking and honest essay on a complex problem that has been many years in the making and has no easy solutions.
I’m going to dissect a key paragraph, line-by-line:
“Putin has been consolidating Russian influence through his energy policy.” - Agree 100%. It is the most powerful tool in his foreign policy armoury.
“Europe's dependency on Russian gas was short-sighted and foolhardy.” Agree 50%. It was also pragmatic, as the sheer volume, affordability & availability was a boon for consumers. No other source ever came close, and that holds true today. Domestic EU production is waning because of depletion & shale exploration pulled a blank. That was before fracking was banned.
Could European buyers have bought more US LNG? They underpinned the first wave of projects, but the flexibility of those contracts allowed much of it to flow to premium Asian markets. Should EU buyers have insisted on destination clauses? That goes against US commercial practice and EU competition rules — see the EC’s anti-trust investigation into Qatar Petroleum (which was recently dropped because, yep, now Europe really needs any LNG the Qataris can spare, no questions asked!). Undoing those rules 10 years ago would have tempered the deregulatory push to transition away from oil indexation and embrace market-based gas hub pricing, which saved EU consumers an estimated $70 billion over the past decade, according to the IEA. That was because Gazprom was exposed to competition from global suppliers ie LNG and this held their feet to the fire in price negotiations. It worked fairly well for many benign years until, of course, markets tightened. The lesson here is that outsourcing energy security to ‘the market’ means paying market rates to compete for marginal supply. It means consumers benefit more during a global glut, and suffer more when there’s a shortage.
The foolhardy part comes, in hindsight, from believing that buying Russian gas would ensure peace in Europe. Maybe us Europeans were naive. Right up until the invasion I doubted Putin would do this, thinking the economic cost would deter him. Clearly we don’t understand the man & his motives.
“So too has been its ideological experimentation with renewable energy dependence.” Mostly disagree. If Europe had installed zero wind turbines and solar panels, what would the mix look like today? Nuclear would not necessarily have risen to the challenge, the European nuclear industry ran out of steam long before wind & solar became mainstream power sources. You would have a power sector even more dominated by gas, not less. Gas is flexible, it ramps up & down to balance renewables. Every kilowatt-hour of wind or solar power replaces the same kWh of gas. Now, does this add wider system balancing costs? Yes absolutely. Hence the introduction of capacity markets to remunerate dispatchable plants for their availability. The cost of these schemes should be considered holistically as part of the renewables pívot. ‘Naked’ wind & solar is great for investors, who garner part of their profits by socialising these system costs. We need to move on from that failed model.
So, Europe needs a holistic approach to its energy predicament that doesn’t rule out sources as ‘good’ or ‘bad’. Success or failure will hinge on deploying the right mix of techs & sources in the right places after considering system-wide costs & benefits. This means more centralised planning & implementation. The market needs guidance to navigate this tricky energy transition (and we’ve only really discussed electricity so far, not domestic or industrial heating, where gas demand is v. sticky). The balance is certainly far from perfect, but let’s not demonise energy sources. We’re going to need them all, to varying degrees.
A final point: to paraphrase Dan Yergin, the energy transition is a misnomer. We’ve only had energy additions. As long as demand keeps rising, clean energy sources won’t displace dirty ones. The danger is to believe they can, and to constrain investment in conventional energy sources before replacements are ready at scale (if indeed this ever happens). So don’t blame the addition of renewables (despite their shortcomings they are helping, a lot, believe me), blame the zealotry that leads to constraints on investment in fuels that the world will need for decades to come. Lack of investment in the 2010s was largely due to poor market conditions, not policy/ideological constraints. But there is a very real threat that stymying investment today will exacerbate future supply shortages. That nuance is important.
I’ve written more about all this in Energy Flux and Energy Monitor:
One more point I'd add is that I don't think it's logical to split up 'pro-human' and 'pro-planet' as you do in your list of priorities. The reason we should care about the planet can be boiled down to pure self-interest. We don't try to save endangered species because they're cuddly and cute (even if advertisements make it seem like this is the case), but because they hold the environment which we rely on in balance. I think that separating these priorities makes it seem like environmental protection is for the environment's sake. Really it's for the sake of the people of today and tomorrow.
Pretty shortsighted read. Putin may be trying to salvage as much control as he can NOW due to our needed energy shift to keep the planet alive. This may be his only shot. Bl But to say we are doing it too quickly is ridiculous. We are transitioning at a snails pace, and achieving reduction of fossil fuel needs would also prevent this war from happening, while salvaging the planet and Billions of future humans. Imagine your pie charts with little exports from Russia needed to those countries? As for why exactly you think that decarbonizing the planet has led to Russia inalvading Ukraine...u didnt get specific...like at all. Decarbonizing will reduce the dependence of Russia. Reduce thier importance. Reduce their power. When is a better time than yesterday in that respect. Paying a few extra dollars at the pump for a while and for goods is well worth it to me. Fossil fuels should be more expensive anyway...as they come with so mucn damage and real world costs. That forces an even faster market change.
Thought provoking and interesting read Adam. There’s lots to agree with but lots that needs to be dug in to. We have done anything but “recklessly prioritize” dealing with climate change in my lifetime. Climate science/scientists started warning about the perils of GHG build up in the atmosphere almost four decades ago (by some measures even longer). A gradual energy transition could have started in the 80’s were in not for a “reckless” commitment to fossil fuels by societies and governments both. Alas our world is enormously complex, contradictory, and nuanced…so keep digging my friend…. …And one final note, I would argue there is no logic without humans, and no humans without a livable planet, so perhaps that list should be reversed! ✌🏼
Great distillation of complex and widespread issues facing a global crisis. The need for sound logic and thought has never been greater! Glad to know such rational logical minds out there working to educate the public on the most important issues of our generation.
Great piece. One part I had an issue with was the "children's children's children" comment. While I agree that there are immediately pressing issues like the Russia-Ukraine situation that need far more attention right now, climate change is already costing lives and will do so at a much faster rate in the near future. Desertification is already causing famine, sea-level rise is already submerging people's homes, extreme weather events are already ravaging towns and cities, etc. People like to say stopping climate change is about 'leaving a habitable world for future generations,' but really it's about people today (like you and I) who will have to face the turmoil that climate change will impart on the humanity.
Really insightful stuff. Clearly lays out our options, shortcomings, and opportunities to fix the mess in addressing climate change, and how we talk about it. Particularly relevant and pointed to the abhorrent events in Ukraine
Good piece. The central issue IMHO is that people think it is "Either / Or", not both. We can have renewables so we use LESS natural gas, coal, and oil. And Nuclear is a very viable baseload solution vs fossil fuels as you pointed out. Our policy makers just need to get out of the all / nothing type of mindset.
Did you mean to say "nuclear fission" when you wrote "nuclear fusion?" Because electric power via nuclear fusion is not yet affordable and accessible and reliable, is it?
Adam, I congratulate you for writing with conviction. This is a brave, thought-provoking and honest essay on a complex problem that has been many years in the making and has no easy solutions.
I’m going to dissect a key paragraph, line-by-line:
“Putin has been consolidating Russian influence through his energy policy.” - Agree 100%. It is the most powerful tool in his foreign policy armoury.
“Europe's dependency on Russian gas was short-sighted and foolhardy.” Agree 50%. It was also pragmatic, as the sheer volume, affordability & availability was a boon for consumers. No other source ever came close, and that holds true today. Domestic EU production is waning because of depletion & shale exploration pulled a blank. That was before fracking was banned.
Could European buyers have bought more US LNG? They underpinned the first wave of projects, but the flexibility of those contracts allowed much of it to flow to premium Asian markets. Should EU buyers have insisted on destination clauses? That goes against US commercial practice and EU competition rules — see the EC’s anti-trust investigation into Qatar Petroleum (which was recently dropped because, yep, now Europe really needs any LNG the Qataris can spare, no questions asked!). Undoing those rules 10 years ago would have tempered the deregulatory push to transition away from oil indexation and embrace market-based gas hub pricing, which saved EU consumers an estimated $70 billion over the past decade, according to the IEA. That was because Gazprom was exposed to competition from global suppliers ie LNG and this held their feet to the fire in price negotiations. It worked fairly well for many benign years until, of course, markets tightened. The lesson here is that outsourcing energy security to ‘the market’ means paying market rates to compete for marginal supply. It means consumers benefit more during a global glut, and suffer more when there’s a shortage.
The foolhardy part comes, in hindsight, from believing that buying Russian gas would ensure peace in Europe. Maybe us Europeans were naive. Right up until the invasion I doubted Putin would do this, thinking the economic cost would deter him. Clearly we don’t understand the man & his motives.
“So too has been its ideological experimentation with renewable energy dependence.” Mostly disagree. If Europe had installed zero wind turbines and solar panels, what would the mix look like today? Nuclear would not necessarily have risen to the challenge, the European nuclear industry ran out of steam long before wind & solar became mainstream power sources. You would have a power sector even more dominated by gas, not less. Gas is flexible, it ramps up & down to balance renewables. Every kilowatt-hour of wind or solar power replaces the same kWh of gas. Now, does this add wider system balancing costs? Yes absolutely. Hence the introduction of capacity markets to remunerate dispatchable plants for their availability. The cost of these schemes should be considered holistically as part of the renewables pívot. ‘Naked’ wind & solar is great for investors, who garner part of their profits by socialising these system costs. We need to move on from that failed model.
So, Europe needs a holistic approach to its energy predicament that doesn’t rule out sources as ‘good’ or ‘bad’. Success or failure will hinge on deploying the right mix of techs & sources in the right places after considering system-wide costs & benefits. This means more centralised planning & implementation. The market needs guidance to navigate this tricky energy transition (and we’ve only really discussed electricity so far, not domestic or industrial heating, where gas demand is v. sticky). The balance is certainly far from perfect, but let’s not demonise energy sources. We’re going to need them all, to varying degrees.
A final point: to paraphrase Dan Yergin, the energy transition is a misnomer. We’ve only had energy additions. As long as demand keeps rising, clean energy sources won’t displace dirty ones. The danger is to believe they can, and to constrain investment in conventional energy sources before replacements are ready at scale (if indeed this ever happens). So don’t blame the addition of renewables (despite their shortcomings they are helping, a lot, believe me), blame the zealotry that leads to constraints on investment in fuels that the world will need for decades to come. Lack of investment in the 2010s was largely due to poor market conditions, not policy/ideological constraints. But there is a very real threat that stymying investment today will exacerbate future supply shortages. That nuance is important.
I’ve written more about all this in Energy Flux and Energy Monitor:
https://www.energyflux.news/p/gas-shock-europe-strategic-frailties?s=w
https://www.energymonitor.ai/policy/market-design/opinion-liberalisation-and-decarbonisation-are-a-recipe-for-volatility
One more point I'd add is that I don't think it's logical to split up 'pro-human' and 'pro-planet' as you do in your list of priorities. The reason we should care about the planet can be boiled down to pure self-interest. We don't try to save endangered species because they're cuddly and cute (even if advertisements make it seem like this is the case), but because they hold the environment which we rely on in balance. I think that separating these priorities makes it seem like environmental protection is for the environment's sake. Really it's for the sake of the people of today and tomorrow.
Pretty shortsighted read. Putin may be trying to salvage as much control as he can NOW due to our needed energy shift to keep the planet alive. This may be his only shot. Bl But to say we are doing it too quickly is ridiculous. We are transitioning at a snails pace, and achieving reduction of fossil fuel needs would also prevent this war from happening, while salvaging the planet and Billions of future humans. Imagine your pie charts with little exports from Russia needed to those countries? As for why exactly you think that decarbonizing the planet has led to Russia inalvading Ukraine...u didnt get specific...like at all. Decarbonizing will reduce the dependence of Russia. Reduce thier importance. Reduce their power. When is a better time than yesterday in that respect. Paying a few extra dollars at the pump for a while and for goods is well worth it to me. Fossil fuels should be more expensive anyway...as they come with so mucn damage and real world costs. That forces an even faster market change.
Thought provoking and interesting read Adam. There’s lots to agree with but lots that needs to be dug in to. We have done anything but “recklessly prioritize” dealing with climate change in my lifetime. Climate science/scientists started warning about the perils of GHG build up in the atmosphere almost four decades ago (by some measures even longer). A gradual energy transition could have started in the 80’s were in not for a “reckless” commitment to fossil fuels by societies and governments both. Alas our world is enormously complex, contradictory, and nuanced…so keep digging my friend…. …And one final note, I would argue there is no logic without humans, and no humans without a livable planet, so perhaps that list should be reversed! ✌🏼
Adam, this is hands down your best piece, just loved it
Great distillation of complex and widespread issues facing a global crisis. The need for sound logic and thought has never been greater! Glad to know such rational logical minds out there working to educate the public on the most important issues of our generation.
Great piece. One part I had an issue with was the "children's children's children" comment. While I agree that there are immediately pressing issues like the Russia-Ukraine situation that need far more attention right now, climate change is already costing lives and will do so at a much faster rate in the near future. Desertification is already causing famine, sea-level rise is already submerging people's homes, extreme weather events are already ravaging towns and cities, etc. People like to say stopping climate change is about 'leaving a habitable world for future generations,' but really it's about people today (like you and I) who will have to face the turmoil that climate change will impart on the humanity.
Really insightful stuff. Clearly lays out our options, shortcomings, and opportunities to fix the mess in addressing climate change, and how we talk about it. Particularly relevant and pointed to the abhorrent events in Ukraine
Good piece. The central issue IMHO is that people think it is "Either / Or", not both. We can have renewables so we use LESS natural gas, coal, and oil. And Nuclear is a very viable baseload solution vs fossil fuels as you pointed out. Our policy makers just need to get out of the all / nothing type of mindset.
Did you mean to say "nuclear fission" when you wrote "nuclear fusion?" Because electric power via nuclear fusion is not yet affordable and accessible and reliable, is it?