Author: Vassilia Orfanou
Editor: LUDCI.eu Editorial Team
In an era of globalisation, the economies and interests of the states are deeply interconnected with one another. Still, this does not necessarily mean that they will always align with one another.
For sure, one state cannot go alone in a global community – the reliance to one-another seems inevitable and most of the times, the decisions of one can affect the other and all of them when not aligned affect the entire community, usually in a bad way.
This was the case of the decisions made surrounding the covid era (more details here check on paid news and the Journal here and we are now unfortunately approaching another series of decision-making possibly leading to energy lockdowns; increase of prices; no heating in houses; families-children and elderly leaving in extreme temperatures to save on costs.
The case of the gas supply chain is currently a serious problem. Gas is the same as the water or food supply. It is necessary to leave and breath depending on where one resides. it is a simple necessity as the alternatives may not be the most cost-efficient one, plus in any case scenario that we see this, it will once again affect the people’s financial standing and in many cases, leaving and breathing.
For sure, the Ukrainian War is not just a war between two countries. It is a global War. An Energy War. A Currency War. Ultimately, it is a War of the fittest, which brings it down to another Financial War, which by 99.9% will affect our everyday living.
For sure, Moscow is destined to punish both America and the European states for their sanctions imposed at the kremlin regime after the Ukrainian invasion, which by default was a defense rather than offence and contrary to how we may wish to portray this.
Russian top power echelons believe that the energy dependence of the European states may resolve their firm stance against Russia. However, the spearheads of Europe need to understand that short term plans are not viable against Moscow agitation.
More alarmingly, the prices of gas increased up to 300 percent in comparison to last year.[1] While we need to understand that this Energy War is here to stay for the next 2 years.
As such, long term plans are based on well-crafted strategies required to mitigate the impact of energy disruption.
In the short term, three major pathways lie ahead. The first is securing the necessary level of physical gas at higher prices to meet the requirement of industries and households. The second way may increase the dependence of Europe on the Russian gas pipeline which is not in the favor of European leaders. The third way is to stop cooperating with Russia altogether, continue the sanctions and find alternative ways to pursue gas either from the USA or elsewhere. Obviously, in this case scenario, what needs to be understood is the form this gas will be provided, which will obviously increase the costs, making some states richer and others, rather depleted.
The European states have already taken steps, LNG cargoes are being redirected to Europe. The USA is moving in the direction of the Qatar LNG, but the ability of the Qatar to redirect LNG from Asian customers to Europe is rather limited.
Conclusion:
In the long term, Europe, Russiam and US led responses are crucial to curb the current challenges as a result of the Ukrainian War. To cope with current gas short fall, the International energy agency has advised that Europe must replace the Russian energy with renewable and nuclear energy[2]. But then again, this discussion brings to the fore, another discussion on nuclear energy, whereby a number of states globally were citing against a couple of decades back.
Moreover, IEA said that “In light of the renewed interest in nuclear power’s role in clean energy transitions, the war has underscored the need to explore options for investment in new facilities, as well as the reopening of existing (uranium) conversion plants.”[3]
The European leaders are making strenuous efforts to come out of the Russian energy trap with IEA stating that $2.4 trillion are set to be invested on renewable energy sources[4]. To avoid any set back, European states need to protect businesses and households from high energy costs.
Moreover, the government’s campaigns must encourage consumers to reduce the use of gas during the upcoming winter season.
In a nutshell, there should be a series of measures that all European states should take up to keep up any state’s, country’s and more so – ant consumer’s head above the water. But unfortunately, what we have seen to-date is leaders that will always by 100% drown the people from one generation to the next, to exercise the necessary control and bring only specific people above water that happen to make the decisions, which by default are entirely wrong for the people and still serve specific people; specific realities and specific agendas.
[1] “Europe May Shift Back to Coal as Russia Turns down Gas Flows.” n.d. Europe May Shift Back to Coal as Russia Turns down Gas Flows. Accessed June 26, 2022. https://www.trtworld.com/business/europe-may-shift-back-to-coal-as-russia-turns-down-gas-flows-58215.
[2] “Europe May Shift Back to Coal as Russia Turns down Gas Flows.” n.d. Europe May Shift Back to Coal as Russia Turns down Gas Flows. Accessed June 26, 2022. https://www.trtworld.com/business/europe-may-shift-back-to-coal-as-russia-turns-down-gas-flows-58215.
[3] Reuters. 2022. “UPDATE 2-Russia May Cut off Gas Completely, Europe Must Act Now – IEA,” June 22, 2022, sec. Commodities News. https://www.reuters.com/article/iea-energy-investment-idAFL1N2Y90F8.
[4] “US$2.4t Put into Energy in 2022 Not Enough to Tackle Supply Crunch: IEA.” 2022. The Business Times. June 22, 2022. https://www.businesstimes.com.sg/energy-commodities/us24t-put-into-energy-in-2022-not-enough-to-tackle-supply-crunch-iea.
Featured photo by Petra M. Greening, Pexels
