Ukraine, Conflict and the Climate Crisis
The war in Ukraine is entrenching our dependency on fossil fuels more than ever. This isn't just two tribes going to war, it's a battle for the survival of the entire human race.
This post focuses on Ukraine as a case study for the intricate relationship between climate breakdown and conflict and how the crisis has consolidated and extended our dependency on fossil fuels.
The story so far… . I previously covered reports produced by the Pentagon on climate change.
The first report produced by the CNA Corporation (Center for Naval Analyses), National Security and the threat of Climate Change, was published in 2007. A further report was put out by the Pentagon in 2015 covering the security concerns of climate change. The general message is that the US military - by some miracle - wants to decouple itself from fossil fuels, but still sees itself as a global policeman. It recognises the problem, but it’s quite clear that it doesn’t comprehend the problem. Indeed its objective was summed up thus:
The Department’s defense strategy, as reflected in the 2014 Quadrennial Defense Review (QDR), emphasizes three pillars: protect the homeland, build security globally, and project power and win decisively.
I outlined this here in a section that analysed just how the US military machine ticks and how totally dependent it is on fossil fuels, as are other countries’ militaries.
Now that the US is involved in a proxy war with Russia in Ukraine, how does that tie in with climate change? First some background as to why Ukraine emerged as a battleground in the first place. Some of that story is covered here.
It outlines how US agricultural corporations were seeking to take advantage of the breadbasket of Europe. Ukraine has some of the most fertile areas in the world. It’s no surprise that the war has instigated serious food shortages. But as always where there’s geopolitical tension, energy resources lie at the heart of it. Ukraine is no exception. It all links into Russian oil and gas.
It’s A Gas
In 2005, the gas crisis came to a head as the Orange revolution in Ukraine generated instability in the country. A paper published by Jonathan Stern, Director of Gas Research at the Oxford Institute for Energy Studies, The Russian-Ukrainian gas crisis of January 2006, outlines what was effectively a hangover from the breakup of the Soviet Union.
At the time, Russian gas giant Gazprom supplied nearly 40% of Europe’s gas supplies, with around 80% routed through Ukraine. Ukraine had struggled to meet gas payments during the 1990’s, leading to high levels of debt. This led to intermittent interruptions of gas supplies through the country. However agreements were reached in 2004 that secured transit of gas supplies that included a loan from Gazprom to Naftogaz, Ukraine’s largest oil and gas company. This also set up a supply of gas to Ukraine from Turkmenistan. Everything was fine until the political changes in December 2004 turned everything upside down. The first point of contention was a rise in gas prices. Market prices had been rising and the price hikes proposed by Gazprom and Turkmenistan was to bring prices in line with European levels.
Another player entered the fray. The gas transit company had changed. RosUkrEnergo (RUE), a Swiss-registered venture company, is 50% owned by Gazprom, through its subsidiary Swiss-registered Rosgas Holding A.G., and another 50% by Swiss-registered private company Centragas Holding A.G., as part of a consortium of the GDF Group owned by Dmytro Firtash and Ivan Fursin. The company was formed in July 2004 following a deal by Ukrainian President Leonid Kuchma and Putin. In 2009, RUE filed a lawsuit against Naftogaz for allegedly embezzling 6.3 billion cubic meters of transit natural gas. On June 8, 2010, the Arbitration Institute of the Stockholm Chamber of Commerce:
obliged the national joint stock company Naftogaz Ukraine to return 11 billion cubic meters of gas to Switzerland-registered RosUkrEnergo (RUE) and to give it 1.1 billion cubic meters of gas as compensation, according to the Centragas company, which is a shareholder of RosUkrEnergo.
"This ruling confirms that the gas in question was taken by Naftogas in breach of its storage contract with RUE, and that Naftogas will return 11 billion cubic meters of gas in storage in Ukraine to RUE on the same terms as before the expropriation," the press release of Centragas reads.
However it would appear that RUE was also engaged in corrupt activities as reported by the Kyiv Post. Documents released by Wikileaks outline suspected links with Russian Mafia head Semyon Mogilevich. The cables show links with Mogilevich, Firtash and Fursin, although criminal wrongdoing hadn’t been conclusively determined. Nevertheless the original agreements for piping gas through Ukraine were falling apart.
As 2006 dawned, gas supplies to Europe dwindled as a direct result of Ukraine tapping into supplies for its own use. This was denied by the Ukrainian Government. Gazprom’s reaction was to pump more gas into the system to compensate. As such a serious crisis was averted within the week. A new agreement was signed by all parties to resolve supply issues. But even here there were inconsistencies, particularly with respect to prices.
Not surprisingly there was a political backlash to the gas crisis. According to President Viktor Yushchenko:
“Vladimir Putin intends to destablilise Russia’s western neighbour in the hope of unseating its leader…with elections looming in Ukraine, President Putin regards this as the right time to exert pressure”.
Some familiar rhetoric came from the US:
The US Secretary of State [Condoleezza Rice] said that the episode:
“..appeared to us to be politically motivated efforts to constrain energy supply to Ukraine. The game just can’t be played that way…when you do it the way it was done, with an obviously political motive, of course it causes problems.”
It should be born in mind here that Yushchenko had an axe to grind against Russia, and Russia at the time was attempting to recover from the devastation wrought by Boris Yeltsin’s tenure. Revenue from oil and gas exports were crucial to the resuscitation of the battered Russian economy. For Russia to engage in gas politics with Europe would have been economic suicide. The paper summed up the situation:
The crisis can be considered political in the sense that all commercial gas relationships between CIS [Commonwealth of Independent States] countries require the approval – and very often the signing of the key documents – by presidents and prime ministers. It was also political in that, had President Yushchenko not won the 2004-05 elections, then relations between the two countries would not have deteriorated to the same extent, and a price accommodation between Gazprom and Naftogaz would probably have been reached. However, President Putin’s proposal of a three month delay in the application of the new price regime which would have protected President Yushchenko from any effects of the price increase until after the March 2006 elections and after the worst of the winter period, could be regarded as a conciliatory political gesture.
A logical political interpretation to be placed on these events is that if Ukraine wishes to turn away politically from Russia towards the EU and NATO – and is opposed to any relationship with Gazprom in terms of ownership of gas assets - then it can expect the same commercial terms as those countries. This is akin to the political and commercial changes which took place between Russia and the former CMEA countries in Central/Eastern Europe after 1990. Had Ukraine chosen to maintain a closer political relationship with Russia, there is no doubt that it could have continued to pay lower gas prices at least for a period of time.
But with instability becoming inherent within Ukraine, the gas crisis would raise its head again, posing questions about energy security in Europe. The crisis that hit in January 2009 was worse than that of 2006 as Europe struggled with one of the coldest winters in years. This paper, The 2009 Russian-Ukrainian Gas Dispute: Lessons for European Energy Crisis Management after Lisbon, evaluates the crisis through the lens of energy security.
The first major agreement between Russia and the EU was the Partnership and Cooperation Agreement (PCA), established in 1997, initially for a period of ten years, with energy security a key element:
The agreement aims both at security of energy supply but also at assisting Russia in overcoming its shortages in the energy sector. This includes modernization of the latter’s energy infrastructure, promotion of energy saving and energy efficiency, and improvements in the management and regulation of the energy sector in line with market economy principles.
The events in Ukraine though in 2004 prompted discussions on a new PCA. This led to a summit in 2010 whereby the EU and the Russian Federation, ‘launched a new partnership for modernization, including on energy and climate change’.
The PCA enhanced cooperation and trade with the EU and Russia. This was consolidated in the ‘EU-Russia Energy Dialogue’ in 2000. This:
constitutes a platform where the EU and Russia aim to further integrate their energy markets and highlight common interests for political institutions on both sides, thus keeping each other informed about recent events and developments in the energy sector.
Emerging from these agreements was the construction of the NordStream pipeline. But on January 1, 2009, Gazprom stopped gas supplies to Ukraine, claiming that Naftogaz had failed to pay late-payment fines and penalties. This revolved around ‘stolen’ gas:
On 4 January, Gazprom claimed Ukraine had ‘stolen’ 50 million cubic metres (mmcm) in the 24 hours up to 10.00am on that day – 25 mmcm from Gazprom’s European customers and 25 mmcm from RUE’s stored gas. On 5 January, Gazprom claimed that during the first four days of the year Ukraine had ‘stolen’ 65.3 mmcm of gas and called upon Ukraine to make this up by supplying from its own resources a corresponding volume on its western border.
A consortium of actors involved in the dispute, including Gazprom and EU gas companies, was formed to resolve the dispute by raising funds to finance a system restart. Following a summit in Moscow, supplies were resumed on 10 January.
Following the crisis, the EU began to diversify supplies. This involved getting supplies from former Soviet countries such as Armenia, Azerbaijan, Moldova and Belarus, including further investment in Ukraine’s gas infrastructure. In addition, plans were implemented to tap into supplies from the Caspian region and the Middle East.
Clearly political instability and uncertainty in Ukraine played a role in the crisis. But another factor was lack of resilience within the EU and other countries for dealing with such a crisis. A revision of the EU Gas Directive would attempt to tackle such deficiencies within the market. As the paper sums up:
Our analysis showed two clearly demonstrated loopholes in the EU’s current strategy to resolve supply crises: (i) the fragmented character of information on the internal market and the coordination thereof in terms of emergency plans; and (ii) the sometimes haphazard manner by which bilateral diplomacy is conducted.
What’s the solution and what legal frameworks are in place? In 1999, the Energy Charter Treaty was ratified, This has been seen as a means for international dispute resolution. However Russia has pulled out of the treaty due to concerns of pricing levels and supply availability and protection. The EU outlines the treaty’s aims:
The Energy Charter Treaty is a multilateral framework for energy cooperation designed to promote energy security through more open and competitive energy markets, respecting the principles of sustainable development and sovereignty over energy resources, based on the principles in the Energy Charter.
The decision by the Council of the EU and European Commission approves the Energy Charter Treaty and the Energy Charter Protocol on behalf of the European Communities (EU) and Euratom.
But Russia’s concerns over the Treaty are entirely justified. This is outlined in an article from the International Institute for Sustainable Development (IISD). To explain:
The Energy Charter Treaty, commonly referred to as the ECT, is an investment treaty that was developed in the 1990s to enable multilateral cooperation in the energy sector in the wake of the Cold War. Its 53 contracting parties include countries in Europe, Asia, and the Middle East, as well as the European Union and Euratom.
However, the treaty is being used more and more frequently by fossil fuel investors to mitigate the losses they incur from public policies. Using a mechanism known as investor–state dispute settlement, or ISDS, the fossil fuel industry has sued governments and obtained record-breaking damages awards that cost taxpayers millions of dollars.
The ECT is in effect a trade agreement and ISDS has become a major area of contention. An article from Global Justice Now outlines how ISDS operates. It’s an account from UN human rights expert Alfred-Maurice de Zayas, speaking to the UN Human Rights Council. He was referring to the now defunct Transatlantic Trade and Investment Partnership (TTIP).
In short, ISDS allows Corporations to sue Governments if their profits are threatened. These cases are heard in secret courts and there’s no appeals system or public accountability. I’ve previously gone into this in some detail.
A report from the Transnational Institute (TNI) outlines how Spain has been impacted by the ECT. Over the past decade, Spain has been caught up in more ISDS cases than any other country, ‘a total of 51 claims, of which 27 have already been resolved, 21 of them in favor of the investor.’ The ECT is generally seen - by the European Commission and EU member states - to be outdated, whereby its ISDS policy allows ‘private investors to challenge public policy measures in the energy sector’. Also it is ‘not in line with the objectives of the Paris Agreement on Climate Change or the Sustainable Development Goals.’
An article from Corporate Europe Observatory offers a broad overview of the problems with the ECT. In short:
governments that phase-out coal, end gas production or stop new oil pipelines to keep fossil fuels in the ground can be held liable for billions in damages under the Energy Charter Treaty (ECT). The ECT allows foreign investors in the energy sector to sue governments for decisions that might negatively impact their profits – including climate policies.
According to supporters of the treaty, it can encourage investment in renewable energy initiatives. However:
There is no clear evidence that agreements such as the ECT actually attract investment. In 2018, the Organisation for Economic Cooperation and Development (OECD) concluded in a review of available studies on the issue that “little robust evidence has been generated today”. A recent meta-analysis of 74 studies found that investment agreements’ effect on increasing foreign investment “is so small as to be considered zero”.
It therefore follows that such investments tackle climate change? An ECT insider who just happens to be an advisor to Gazprom stated that, “[The] ECT today first of all protects renewable energy sources... from unilateral worsening of investment climate by host countries.”
Although there has been some cases involving renewables, the majority have covered fossil fuel investments. Indeed on a global basis:
only 18 per cent of energy investment was in renewables while fossil fuels comprised 52 per cent, a staggering US$976 billion (the remaining share went into electricity grids, nuclear power and energy efficiency). On top of that governments support fossil fuels with enormous subsidies, estimated at an annual US$5.2 trillion globally and US$289 billion in the EU.
An obstacle for countries pulling out of the ECT is the 20 year rule that ties countries to litigation after they have pulled out. This ‘sunset clause’ was also included in CETA and TTIP. However pulling out does:
significantly reduce a country’s risk of being sued: because the provision only applies to investments made before withdrawal, while those made after are no longer protected by the ECT.
The main thrust of the ECT was to smooth relations between the EU and the former countries of the Soviet Union. It emerged from the negotiations around the Conference on Security and Cooperation in Europe (CSCE). It has eight key components:
(1) definitions of energy materials and products; (2) commerce (both trade and transit); (3) investment protection (non-discrimination for existing investments and protection against expropriation); (4) miscellaneous issues (stipulating sovereignty over natural resources, environmental aspects, transparency, state and privileged enterprises, security provisions, etc); (5) dispute settlement (investor-to-State and State-to-State disputes); (6) transitional provisions; (7) institutions of the Energy Charter (Conference and Secretariat as well as provisions on the quinquennial review of the Energy Charter process); and (8) final provisions.
The ECT became an important factor in ensuring the freeflow of gas supplies to Europe through Ukraine and other transit countries. However there was an impasse with the EU regarding a ‘transit protocol’. Given the issues with Ukraine, Russia failed to ratify the ECT but remained a signatory. Following the 2009 crisis further negotiations took place.
Fast forward to the 2022 invasion, and the ECT has raised its head again. It revolves around the completion of the Nord Stream 2 pipeline. Nord Stream 2 AG is a subsidiary of Gazprom, registered in Switzerland. NS2 served as an expansion of the Nord Stream (1) system. Its purpose was to bypass Ukraine as a transit route for natural gas. But following the recognition by Russia of the Donbas region, Germany pulled out of the project.
However it should be noted that Germany hasn’t cancelled the project completely, it halted the certification of the project. The reason for this is the ECT. Climate Home News goes into the background:
In 2019, the multinational consortium behind Nord Stream 2 used the treaty to sue the EU over the implementation the implementation [sic] of measures to separate energy supply and generation from transmission included in the 2019 revised EU gas directive.
Shell, one of the companies behind the project, ‘pushed for the case to be against Germany rather than the EU – which the European Commission was happy to support.’
Germany has fallen foul of the ECT before from Swedish company Vattenfall over pollution and nuclear power disputes. As such, NS2 could revive an arbitration claim if the project is cancelled completely. In a meeting on 24 June 2022, long awaited reforms of the ECT failed to impress, reports Friends of the Earth Europe. Many of the existing elements of the original agreement remained. Under the existing set-up the NS2 would remain protected within the EU up until 2040. As German environment minister Svenja Schulze put it:
“We also run the risk of ending up in international arbitration courts with compensation claims if we stop the project.”
What ever way you look at it, trade agreements like the ECT act like road blocks when it comes to energy transition. They become suicide packs that stymie action on climate change. As the article sums up:
It has been used by energy companies to sue governments whose policies damage their investments, whether fossil fuel based or renewables.
As noted above, the US is engaged in a proxy war in Ukraine. The reason? Controlling global energy resources. In 2017, the US imposed sanctions on NS2. Concerns were that the EU would increase its dependence on Russian gas. But behind it all was the aim of the US to increase liquefied natural gas (LNG) sales to Europe. In reality though, the EU imports around 37% of gas from Russia, a decline from 75% since 1990. If the EU somehow manages to push through an energy transition, then that decline will continue. But it would make economic sense in the interim to continue to import gas from Russia. It’s 25% cheaper than LNG. And although LNG terminal building is increasing, which would open the market, there are other reasons why LNG is problematic. In May 2021, the US lifted sanctions on NS2. But of course just before the invasion, NS2 was closed.
Since the outbreak of the war, LNG exports to Europe from the US increased from 34% in 2021 to 74%. This may have eased the winter blues and the issues created by the war, but, as DeSmog put it, The US Is Exporting a Fracked Climate Catastrophe.
As a result of the shale gas revolution, the US has become the world’s leading producer of both oil and natural gas.
Because so much gas has been produced, there has been a glut, especially during the COVID pandemic when the industry was badly affected by the global shutdown.
Much of this excess was just simply burned off:
Another result of the fracking boom has been a huge increase in the U.S. industry flaring and venting (burning and releasing) natural gas, which is primarily the greenhouse gas methane.
“This recent increase in methane is massive,” said Cornell professor Robert Howarth, the author of a recent study linking fracking to a spike in atmospheric methane. “It’s globally significant. It’s contributed to some of the increase in global warming we’ve seen and shale gas is a major player.”
The war in Ukraine then has been a godsend for the US oil and gas industry, mostly linked to shale production. On 25 March 2022, a task force was instigated by the EU and the US, ‘to reduce Europe’s dependence on Russian fossil fuels and strengthen European energy.’ Its two primary objectives will be:
Diversifying liquefied natural gas (LNG) supplies in alignment with climate objectives [and]; Reducing demand for natural gas.
The statement released by the White House reflects the most credulous impression of delusional thinking that leaves the whole issue in a fantasy world. It is seeking to ensure exports to Europe of around 15 bcm in 2022, ‘with expected increases going forward.’ It then goes on to state (emphasis added):
The European Commission will work with EU Member States toward the goal of ensuring, until at least 2030, demand for approximately 50 bcm/year of additional U.S. LNG that is consistent with our shared net-zero goals.
In addition, transporting LNG to the EU will require significant infrastructure that will lead to stranded assets following the eventual transition away from fossil fuel dependency, we hope. As the New York Times put it:
The moves caught many in the U.S. energy industry by surprise. Oil and gas executives who have become accustomed to being pilloried for their contributions to climate change were suddenly being called up to help liberate European allies from Russian energy. While the industry was not certain how Europe would make such a giant pivot, executives clearly relished their new casting as saviors rather than villains.
In order to deal with the problem, the EU is apparently going to increase energy efficiency and renewables as well as moving over to hydrogen, and to somehow ‘decrease greenhouse gas emissions from L.N.G. infrastructure and pipelines and to reduce the release of methane from gas operations.’
US based Earthworks is campaigning against a decision by the Biden Administration to increase production of shale gas and oil:
The Biden administration in April announced that it would start selling oil and gas leases on 144,000 acres of public lands in nine states. The lease sales will start this June, and more will almost certainly follow.
The administration is about to announce a new five-year plan for more leasing in millions of acres of ocean waters. Last year, Biden offered more than 80 million acres of offshore waters for drilling in the Gulf of Mexico.
Rather than ending fossil fuel development on public lands, Biden is expected to offer a series of weak “reforms” on federal leasing that will only keep oil and gas companies drilling, when what we really need is an end to fossil fuel extraction on public lands and waters once and for all.
This article from DeSmog puts everything into perspective. The debate on LNG exports to Europe was sparked by the annexation of Crimea by Russia. One of the main protagonists is the notorious American Petroleum Institute (API), a key industry player with a history of rigorous climate denial. The API, amongst others, has been using the war “as a proxy to expand U.S. energy exports,” according to Julieta Biegner, U.S. campaign and communications officer for Global Witness. She goes on to say, “We’ve seen a PR blip of executives and representatives [from the fossil fuel industry] claiming that the U.S. can come to Europe’s rescue.” This has been dubbed “peace washing” (as opposed to greenwashing). Either way it all boils down to ensuring that the bottom line is boosted.
This is common corporate behaviour in situations of crisis, where corporate vultures swoop in to take advantage. Its called disaster capitalism. And of course the irony is that the same rules apply to Russia:
Not only are Western fossil fuel companies cashing in on this global crisis — which is not new — they also “played a critical role in getting Putin to this point,” Jamie Henn, director of Fossil Free Media, said. “There’s no way that Putin would be in the position he is to launch this terrible war and invasion, if it wasn’t for the profits that come from fossil fuels,” Henn added. “And that’s the terrible irony of this moment — that oil and gas companies helped create this crisis.”
The central argument here is the portrayal of gas as a bridge fuel, that somehow natural gas will be a transitional saviour in the eventual switch to renewables. But that position has been well and truly debunked. Yet despite this, a vote by the EU parliament on 6 July 2022, rejected a motion to oppose the inclusion of nuclear and gas as environmentally sustainable economic activities. This concerned the EC’s ‘Taxonomy Delegated Act to include specific nuclear and gas energy activities, under certain conditions, in the list of environmentally sustainable economic activities covered by the so-called EU Taxonomy.’
The International Energy Agency (IEA) has got into the act through a 10 point plan to reduce the EU’s reliance on Russian natural gas. But ultimately it doesn’t matter who’s gas it is, it’s fossil fuels altogether. It should be a global effort. So perhaps the greatest irony of all is that if an official enemy can suddenly bolster the planet (specifically the west) into reducing dependencies on fossil fuels, which is what the EU is apparently now trying to do, it can be done globally. But of course that’s not in the interests of the fossil fuel industrial complex. And they will do anything to ensure that we generally remain dependent on fossil fuels for some time to come.
A briefing from InfluenceMap outlines the tactics that the industry is using to take advantage of the conflict. As IM points out, these tactics were similar to those employed during the pandemic, as I have previously reported on:
The API is the largest trade association for the oil and gas industry. DeSmog outlines the background of the API. It has funded climate denial organisations, with the aim of promoting '“uncertainty” about climate change science and links to fossil fuels.' It claimed that using natural gas would reduce CO2 emissions, taking the position without a hint of irony that:
The oil and gas industry considers climate change a very important issue and is engaging constructively to address this complex global challenge.
In an effort to prop up the US fracking industry, the API grossly exaggerated the number of jobs, claiming that 'more than 7.5 million jobs would be at risk from a fracking ban'. However official records estimated the total number of jobs at 636,000. According to OpenSecrets, the API spent $7,080,000 on lobbying in 2019 and $6,970,000 in 2018.
Much of the information put out by such groups are misleading. IM notes that:
The extent to which energy independence will be achieved for European countries looking to replace Russian import by simple switching to US LNG imports is highly questionable. As UN Secretary General, António Guterres stated, the only "true pathway to energy security" is to accelerate the phase out of all fossil fuels, and stating the "[a]ddiction to fossil fuels is mutually assured destruction ".
Social media has become a favoured platform for misinformation. IM cites a study by Media Matters on the issue, specifically concerning "energy independence". But the push on LNG as a clean energy source is particularly pernicious:
the oil and gas industry has continued to promote that LNG is a clean, low-carbon source of energy that can help transition the energy mix and achieve emissions reduction goals. The claim that fossil gas is a clean or green energy sources has already been regulated against by advertising authorities in the UK for containing misleading claims or misinformation. Moreover, the recent IPCC report from Working Group III on the 'Mitigation of Climate Change' has warned that the future CO2 emissions from existing fossil fuel infrastructure already exceeds the remaining cumulative net-CO2 emissions pathways that limit warming to 1.5C with no or limited overshoot. Suggesting an increase in fossil fuels and fossil fuel infrastructure, such as new LNG terminals and pipelines, is therefore at odds with the science of climate change.
Despite this, the industry has been pushing for ‘the faster and expanded approval of oil and gas infrastructure, including pipelines and LNG terminals.’ Indeed even before Russian invasion, the industry was full of anticipation.
API has been boosting the case through Facebook via an astroturf front group Energy Citizens, to make it look like a grassroots campaign.
To sum up:
Since the invasion of Ukraine, many of the sector's largest industry associations have been sending letters directly to policymakers to lobby for favorable oil and gas policies or call for the reversal of previous or current climate policy decisions. This lobbying appears to focus on pipelines – including the proposed FERC climate policy and Line 5- and LNG terminals.
Its not just in the US that lobbying has been taking place, its happening in the EU as well. In 2017, Corporate Europe Observatory published the report The Great Gas Lock-in: Industry lobbying behind the EU push for new gas infrastructure.
The European gas industry lobby has become a potent and influential force in EU politics, with an annual expenditure of about €100 million, with around 1,000 lobbyists. The European Commission and national governments are highly receptive to the Lobby. Indeed the key players were set up by the EU itself:
The European Network of Transmission System Operators for Gas (ENTSO-G) is a gas infrastructure lobby group created in 2009 under the Third Energy Package by the European Commission, Parliament, and Council to “promote the completion and functioning of the internal market in natural gas and cross-border trade”. Its role, enshrined within the EU’s ‘Trans-European Networks – Energy’ (TEN-E) regulation, is to propose infrastructure projects as part of its bi-annual plan to develop the EU’s gas network, based on its own projections for future gas demand.
ENTSO-G projects itself as independent, but it works with the EC and usually overestimates the demand for gas in Europe, distorting the true picture. It has also pushed the myth of gas as ‘clean’ and denies its position as a lobby group, ‘registering itself as an NGO and claiming it does “not do lobbying activities as such”.’ But:
ENTSO-G is in reality a gas lobby group with unrivalled influence over the European Commission and the EU’s national governments, and is a key piece of the puzzle explaining why Europe is being locked into decades of unnecessary and costly gas infrastructure.
Its aim is to push for additional pipeline infrastructure and LNG terminals to meet this inflated demand. The EU and national Governments then provide the political and financial support to build this infrastructure. Not surprisingly one of the key drivers has been the gas crisis in Ukraine since 2006. This sparked the establishment of the Third Energy Package in 2009, which opened up gas markets to make it easier to trade.
The EU has a Transparency Register that is supposed to list lobbyists. But given its limited effectiveness, opacity register might be a more appropriate description. It can be difficult to assess lobbying expenditure. Add to that a vague account of meetings that take place with Commissioners, full accountability is difficult to establish. As the report points out:
Four out of ten organisations identified as actively lobbying on gas are not part of the voluntary EU Transparency Register, meaning there is no hard data for the resources they spend on lobbying.
Almost all – over 90 per cent – of the companies proposing projects for the ‘Projects of Common Interest’ process are unregistered. …only 11 of ENTSO-G’s 52 members and observers are in the register, despite the fact that they are closely involved in gas policy-making decisions via this EU-created lobby group.
It sums up:
Without a legally binding and fully enforced transparency register that ensures accurate and detailed declarations of lobby spending and activities, it is impossible to be fully precise about the true firepower of the gas lobby.
As noted above, the main thrust of the lobbying campaigns is the myth that gas is ‘clean’ energy. This has been the subject of well orchestrated PR, that extended gas infrastructure is the panacea and gateway to a clean energy future. A key argument as far as renewables are concerned is that gas is required as ‘baseload power’ source. However this notion has been debunked. The CEO of the UK and northeastern US National Grid, Steve Holliday stated that, “The idea of large power stations for baseload is outdated”. He points out a trend towards distributed systems e.g. solar panels on peoples’ roofs. This will become the new baseload he says.
In short (CEO report):
Investing in big infrastructure risks locking us into using gas for decades and slowing down the transition to renewable energy.
With the inevitable consequence of stranded assets, renewables is obviously the answer - not withstanding gas lobby infiltration of the renewables industry. The report makes reference to a Guardian article, Fossil fuel firms accused of renewable lobby takeover to push gas:
Major fossil fuel companies and energy utilities have used their financial power to take control of key renewable energy lobby groups in Europe in an effort to slow the continent’s transition to clean energy, according to industry insiders.
Big energy firms such as Total, Iberdrola, E.On and Enel have together adopted a dominant position in trade bodies such as the European Wind Energy Association (EWEA) and European Photovoltaic Industry Association (EPIA). Their representatives now constitute a majority on both group’s boards.
The reason is simple. With the inevitable shift towards renewables, the answer has been, ‘if you can’t beat them, join them’, thus maintaining a dominant position in the market, if not actually taking it over outright. The end result was that climate negotiations were stymied and climate targets watered down. As the report points out:
Many oil majors like BP, Shell, Chevron, and Total, have bet their future on gas as a way to stay in business while being able to claim they are doing their bit to fight climate change. Realising that oil use will decline, especially as climate policy leads to the increasing electrification of transport, they are gambling on rebranding gas as a ‘clean’ fuel so they can use their technological expertise and financing models honed on oil drilling. They even seem prepared to sacrifice the coal industry, labelling it as ‘dirty’ and pulling investments if it means gas is accepted as a fuel of the future.
The gas lobbyists enjoy a cosy relationship with the EU hierarchy, with civil society excluded from much of the debate. Two of the biggest players are ExxonMobil and Gazprom. Exxon uses PR company Fleishman-Hillard, one of the biggest in the world. FH is also on the books of API, raking in $51.6 million between 2011 and 2013 as reported by the Climate Investigations Center.
CEO also reported on a secret lobby campaign for Monsanto in 2019:
Leaked documents showed how Monsanto had paid FleishmanHillard to – potentially illegally – compile and document information on critics of their chemicals and GMOs.
Gazprom is represented by PR firm GPlus, which is notorious for:
hiring ex-EU officials and being the mouthpiece of Gazprom (from whom trade associations ‘officially’ earns up to €200,000 a year) and the Kremlin. According to its website, Deputy Chairman Tim Price is Senior Communications Advisor to Gazprom Export (the trading branch of Gazprom), but since 2006 has also been a senior media adviser to the Press Service of Vladimir Putin.
In 2020, G-Plus was taken over by Portland Communications. Both companies were subsidiaries of parent company the Omnicom Group.
According to the Morning Star, Tony Blair’s former adviser Tim Allen founded Portland. Given Blair’s close ties with Putin, the Russian Federation became a key Portland client in 2011. More of Blair’s inner circle became involved with the Russian connection. Former Blair spin doctor Alastair Campbell joined Portland. Peter Madelson developed Russian business interests, becoming a director of Sistema, ‘one of Russia’s biggest firms and includes some weapons manufacture, so he has meetings with Putin in the Kremlin.’ In 2016, The Canary linked Portland to an attempt to oust Jeremy Corbyn as Labour leader.
Another major player in Brussels is BusinessEurope. Their remit has been to weaken the EU commitment to renewables and energy efficiency. The European employers’ confederation has been largely successful in its endeavours.
Now that the invasion has taken place, where does the gas lobby stand now? The simple answer is - no change - the same script is being rolled out for 2022, as it was in 2006, 2009 and 2014, the EU needs to reduce its dependency on Russian gas. And, guess what? There’s a push for more LNG infrastructure. It’s also been picking up on the narrative for ‘green’ hydrogen, something that I’ve already covered in detail.
But there’s another danger that further investigations from DeSmog has revealed. Radiation in natural gas. It appears to be a well documented phenomenon, but not well publicised. The problem is radon gas, which is present in shale gas deposits. Radon breaks down into radioactive lead-210 and polonium-210, which is highly toxic. These substances can build up in LNG storage areas such as transport ships and pipelines carrying gas. But no one appears to be paying much attention to the problem. Perhaps not surprising, as radioactive contamination of LNG supplies would be rather bad for business if the word got out.
If all that hasn’t reminded you of the old adage that repeating the same thing over and over again and expecting different results is a sign of insanity, the EU wants to go down the road of producing biomethane, most of which will likely come from food crops, thus putting pressure of food production causing rising prices and food shortages, something that has already become a problem. I’ll be covering that in the next section. The new EU policy is laid out in its REPowerEU: Joint European Action for more affordable, secure and sustainable energy. If only… .
Food for Thought
As already noted, the war has generated food shortage issues. Climate Home News reports that:
Ukraine and Russia are both agricultural powerhouses, and together account for nearly a third of global wheat and barley exports. 45 African and least developed countries import at least a third of their wheat from Ukraine or Russia, and 18 of those countries import more than half. If the war drags on, countries like Egypt could face food shortages as soon as this summer, triggering what the UN secretary general has warned could become “a hurricane of hunger and a meltdown of the global food system”.
This is a harbinger of things to come. As climate breakdown becomes more acute, food security will be impacted. This will be exacerbated if the EU and others end up moving into biofuel production to make up the shortfall of Russian gas. But there is another angle to this crisis. The rise in food prices have been significant. But what supersedes everything else is the fact that conflict is good for business. It’s not just arms companies that make a killing from war (so to speak), it’s oil and gas and ‘Big Ag’. International Development Economics Associates (IDEAs) reports on how agricultural concerns are taking advantage of the war to push up prices. Then there’s the food speculators. The article notes:
The increased speculative activity is confirmed by important work done by Kabir Agarwal, Thin Lei Win and Margot Gibbs, who have tracked the activities of financial investors (investment funds in particular) in commodity markets. They find that, for example, “in the Paris milling wheat market, the benchmark for Europe, speculators’ share of buy-side wheat futures contracts has increased from 23 per cent of open interest in May 2018 to 72 per cent in April 2022.”
Indeed we’re already seeing the impact of intersecting crises amplifying through climate change and conflict. The Food and Agriculture Organization of the United Nations (FAO) warns of a ‘looming widespread food crisis as hunger threatens stability in dozens of countries.’ Its report finds that:
alongside conflict – frequent and recurring climate shocks continue to drive acute hunger and shows that we have entered a ‘new normal’ where droughts, flooding, hurricanes, and cyclones repeatedly decimate farming and livestock rearing, drive population displacement and push millions to the brink in countries across the world.
It lists countries in the global south as being most vulnerable to shocks. Now Ukraine has been added to that list. But we’ve been here before. As markets crashed in 2008, key food commodities like maize and wheat doubled in price. Rice prices tripled, as reported in a paper published by International Food Policy Research Institute. The report identifies the uptake in biofuels as a key driver of the food crisis along with increasing oil prices. Another important driver was commodity speculation. Also in 2007, severe drought in Ukraine caused a downturn in grain production. This is becoming a recurring pattern due to climate change.
Another casualty of the war is fertiliser production, as this article from The Conversation outlines. Fertiliser production has a high energy input, using around 2% of world energy consumption, amounting to about 5% of natural gas consumption. In short, what we have is a vicious circle of rising fuel prices leading to rising food prices and a global system that is hypersensitive to shocks. Combine that with conflict and climate change and you have your crystal ball projection of the future, not to mention the unlikelihood of Ukrainian farmers getting production up again due to the war.
Wrapping It All Up
As this Nation article sums up all this is ‘just the tip of the melting iceberg’. Despite the Pentagons’ apparent awareness of the security threat of climate change, out of its massive $773 billion budget for 2023, ‘$3 billion is being sought to address the effects of climate change on the US military.’ The rest of us it seems are destined to either drown as sea levels rise or perish in some unforeseen mega-storm or just simply starve to death as climate induced global famine takes hold. Anyone who survives all that will have to run the gauntlet of the inevitable violence and depravity that will break out globally as a result of climate and civilisation breakdown. In short, climate change will exasperate conflict and conflict will exasperate climate change, all driven by neoliberal market forces in the shape of the symbiotic relationship between the fossil fuel/military/agricultural industrial complex. Its a positive feedback loop that obeys the inviolable laws of Physics, the one law that humanity can never hope to break regardless of how insanely confident we are of controlling nature.
If all this seems rather dystopian, its because it is. People can argue whether their glass is half full or empty. But that won’t matter of the glass falls and shatters, spilling our hopes and fears. But don’t just take my word for it. This paper published in the Journal Science, Quantifying the Influence of Climate on Human Conflict, analyses the links between climate change and conflict, through mainly quantitative interdisciplinary sources. To set the scene:
Human behavior is complex, and despite the existence of institutions designed to promote peace, interactions between individuals and groups sometimes lead to conflict. When such conflict becomes violent, it can have dramatic consequences on human well-being. Mortality from war and interpersonal violence amounts to 0.5 to 1 million deaths annually, with nonlethal impacts, including injury and lost economic opportunities, affecting millions more. Because the stakes are so high, understanding the causes of human conflict has been a major project in the social sciences.
The paper covers conflict within a broad context, from individual-level violence to political instability and civil war. The analysis covers global historical events going back 10,000 years till the present day.
The study has found a correlation between conflict and climate change. It notes that aggressive behaviour tends to occur at high temperatures in individuals and that the association ‘appears robust across a variety of contexts.’ This can lead to intergroup conflicts and possible police violence in such situations. In particular the study notes that:
in extreme cases, entire communities, civilizations, and empires collapse entirely after large changes in climatic conditions. These documented catastrophic failures all precede the 20th century, yet the level of economic development in these communities at the time of their collapse was similar to the level of development in many poor countries of the modern world, an indicator that these historical cases may continue to have modern relevance.
The study has found that effects are widespread and that ‘coping or adaptation mechanisms are often limited’. With respect to the current climate crisis:
large climatological changes, combined with the quantitatively large effect of climate on conflict—particularly intergroup conflict—suggest that amplified rates of human conflict could represent a large and critical impact of anthropogenic climate change.
Dealing with the crisis would require substantial adaptation. It’s likely that climate change will impact economic productivity e.g. food production, causing price rises. The paper makes this observation:
climate anomalies might result in conflict because they can make cognition and attribution more difficult or error-prone, or they may affect aggression through some physiological mechanism. For instance, climatic events may alter individuals’ ability to reason and correctly interpret events, possibly leading to conflicts triggered by misunderstandings. Alternatively, if climatic changes and their economic consequences are inaccurately attributed to the actions of an individual or group—for example, an inept political leader—this may lead to violent actions that try to return economic conditions to normal by removing the “offending” population.
The paper provides a historic example of how climatic variation affected two separate civilisations a world apart:
Sediments from Lake Huguang Maar in China indicate abrupt and sustained periods of reduced summertime precipitation that coincided with most major dynastic transitions. The collapse of the Tang Dynasty (907) coincided with the terminal collapse of the Maya, both of which occurred when the Pacific Ocean altered rainfall patterns in both hemispheres.
There are of course other variables that may affect outcomes and this is an area that warrants further research. But there is another historical precedent that has been used as a model for our current plight. The phrase ‘Easter Island Syndrome’ has been used in conjunction with environmental collapse.
Easter Island (Rapa Nui) is situated 2300 miles west of Chile. It was originally settled about 1200 years ago. The plight of the original inhabitants was one of ecological collapse and conflict, as this BBC Horizon article outlines. It revolved around the construction of the moai - giant stone statues.
When Dutch explorers arrived on the island in 1722, they observed an island devoid of trees. As the article notes:
Making moai, too, must have used huge numbers of trees. The statues had been getting more elaborate at that time, which must have depleted the forests ever more rapidly. Flenley believes Easter Island is an amazing example of total deforestation, sparked by obsession. The Islanders' cult of ancestor worship cost many of them their lives. Soil erosion with no trees severely hit farming. And there were no canoes in which to escape. Trapped in a hell of their own making, the Islanders turned on each other. It was a self-inflicted ecological disaster.
Easter Island was a closed system because of its remoteness. The Earth is a closed system also. But just like the Easter Islanders before us, we have the fatal illusion of abundance, trapped within our beliefs. Therein is the lesson should we choose to learn it. If not, then Easter Island Syndrome will become the terminal pandemic that will push us to the brink of extinction.
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