Will Putin’s Aggression Spur Renewable Energy Growth?
The U.S. and Europe are slapping Russia with harsh sanctions and banning the imports of oil, natural gas, and coal imports in response to the unprovoked and merciless invasion of Ukraine. Gas prices have temporarily spiked in response. Will the long-term result be an expedited shift to renewables?
The crisis in Ukraine has roiled global energy markets as countries ban imports of Russian oil and gas. Before the war, Russia provided approximately 12% of the world’s oil and 17% of its natural gas. But that quantity is quickly shrinking as governments, companies, and even energy behemoths BP, Shell, and Exxon are severing ties with their Russian counterparts.
In 2021, the United States imported approximately 8% of its oil from Russia (3% of which was crude oil), equating to roughly 700,000 barrels per day.
Since the Russian invasion of Ukraine, the price of crude oil has skyrocketed to over $100 per barrel for the first time since 2014, causing a dramatic spike in prices at the pump.
To prepare the public for a prolonged economic pinch, President Biden recently proclaimed that “defending freedom is going to cost.” To bridge the temporary gap in oil demand—and possibly to sideline Russia on a permanent basis—the Biden administration has engaged in conversations with Saudi Arabia, the United Arab Emirates, Kuwait, and even formerly-shunned, sanctioned countries like Venezuela, and Iran.
Politics at Play
With the upheaval of global energy markets, politicians are jockeying for position. Some assert that Russian oil should be replaced by increased national production. Others advocate for the immediate transition to renewable energy and electric vehicles.
Senator Markey (D-Mass) jumped on the chance to introduce the Severing Putin’s Immense Gains from Oil Transfers (SPIGOT) Act, a proposal mandating that the U.S. replace dirty Russian oil with clean energy sources, stating that “Our global addiction to oil keeps us locked into dangerous cycles of conflict and corruption, but we can choose a cleaner path to peace. By eliminating our addiction to Russian oil, we can build a pathway to a more prosperous and peaceful future, free from reliance on dirty oil and natural gas.”
The proposed legislation, now with bi-partisan support from Nancy Mace (R-SC), is being pitched as a means to increase national security, bolster economic stability, and decrease geopolitical risk.
Europe Doubling Down on Renewables
Europe, which gets nearly 40% of its natural gas supply from Russia, has also seen record-high natural gas prices since the onset of the Ukraine invasion. In response, the European Union is taking dramatic steps to reduce its reliance on Russian oil and gas, cutting Russian imports by 75% in 2022 while simultaneously bolstering energy efficiency initiatives and renewable energy adoption.
“We are doubling down on renewables,” insisted Ursula von der Leyen, the president of the European Commission. “This will increase Europe’s strategic independence.”
The United Kingdom plans to phase out Russian oil imports entirely by the end of this year.
Germany, which has relied on Russia for nearly 50% of its natural gas supply, has suspended the certification of the Nord Stream 2, a 1,200 km pipeline that runs under the Baltic Sea, designed to double the flow of Russian natural gas to Germany.
But it seems to be two steps forward, one step back for Europe—the deficit of Russian oil is forcing some European countries to backtrack on climate goals. For example, Germany is keeping a handful of coal plants online that were scheduled to be shuttered, and other countries are looking to liquified natural gas as an intermediary solution.
Clean or Dirty?
The silver bullet question: As oil and gas prices climb, will countries shore up their domestic supplies with more fossil fuels, or will they embrace renewables?
It’s no surprise that special interests like the American Petroleum Institute are lobbying hard in the U.S. for the expansion of fossil fuel extraction, pressuring the Biden administration to approve export terminals and increase drilling on federal lands.
But clean energy advocates are making a convincing case in favor of renewables, championing investments in solar panels, wind turbines, batteries, electric vehicles, heat pumps, and green hydrogen, calling out the urgent need for decarbonization.
These advocates are quick to spotlight that the United States already has the installed capacity to meet our national energy demand with renewables. In fact, the Energy Information Association (EIA) estimates that America’s existing onshore and offshore wind power resources have the technical potential to produce 40 million GWh of electricity each year, equivalent to 11 times U.S. electricity use in 2020.
Furthermore, it is now less expensive to build new onshore wind and utility-scale solar power generation facilities than it is to operate existing fossil fuel facilities due to the decrease in the cost of wind and solar system components, improvements in efficiency, and lower marginal operating costs. Not to mention that, according to the latest Clean Jobs America Report, clean energy remains the biggest job creator across America’s energy sector, employing nearly three times as many workers as the fossil fuel category.
Nonetheless, the full-scale transition to renewables will invariably take time, and some analysts predict that if people feel too much pain from soaring gas prices, energy bills, and related costs, it’s possible that public support for the transition to renewables may begin to wane. In that case, as often happens, it’s likely that short-term political expedience would trump our urgent climate imperative, long-term economic stability, and basic common sense.
With that said, the longer oil prices remain over $100 a barrel, the more attractive renewables and electric vehicles become.
New Global Energy Economy
No doubt, the oil wars have already been devastating, and until we wean ourselves off fossil fuels, they’re only going to get worse.
Fortunately, a new global energy economy is emerging. Last year, more than 90% of the power plants built across the globe utilized renewable energy (mostly wind and solar). Electric car sales are booming. Battery storage technology is advancing at an exponential rate. Clean hydrogen is becoming a reality.
As Middlebury professor, author, and sustainability activist Bill McKibben wrote in an article in The Guardian:
If you want to stand with the brave people of Ukraine, you need to find a way to stand against oil and gas. So now is the moment to remind ourselves that, in the last decade, scientists and engineers have dropped the cost of solar and wind power by an order of magnitude, to the point where it is some of the cheapest power on Earth. The best reason to deploy it immediately is to ward off the existential crisis that is climate change, and the second best is to stop the killing of nine million people annually who die from breathing in the particulates that fossil fuel combustion produces. But the third best reason – and perhaps the most plausible for rousing our leaders to action – is that it dramatically reduces the power of autocrats, dictators, and thugs.
Certainly, the Ukraine conflict has brought to the forefront of our international dialogue the importance of the U.S., Europe, and other allies working together to create solutions that simultaneously address the energy crisis, the climate emergency, and global security.