The matrix of threats emerging from Russia’s invasion of Ukraine make it difficult to keep abreast of developments, whether these be the increase of global oil and gas prices, or the effect of sanctions, or which states could assist Russia in avoiding the impacts of sanctions, or how wheat prices will begin to soar. As most of us watch from the sidelines, trying to navigate how the markets will respond to these threats and how, in turn, that may affect our daily lives – we can be overwhelmed by the tsunami of information analyzing and predicting outcomes.

The Energy Council has assembled a collection of the best analyses that consider the broad affects to the global oil and gas supplies, and the ripple effects onto the rest of the global economy.

Reuters – “Russian gas threat in Europe – The crisis in Ukraine tests Europe’s dependence on Russian gas against Russia’s dependence on European energy customers”

Reuter’s team analysis utilizes a range of superb infographics that breakdown Russia’s energy supply routes into Europe, and how these may be effected by the ongoing invasion of Ukraine. Europe is arguably the most gas dependent continent on the planet, which naturally affects the EU’s capacity to react to their main energy supplier. In this presentation of infographics and analysis, the Reuter’s team details the barriers and constraints that are currently informing the EU’s stance of not rejection Russian energy supplies.

Breugel – “Preparing for the first winter without Russian gas – The European Union can manage without Russian gas next winter, but must be united in taking difficult decisions, accepting that in many cases it won’t have enough time for perfect solutions.”

Bruegel considers the evolution of European energy supply, setting out several scenarios that could develop over the coming months until Europe’s winter – and how these developments will each result in a radically different energy landscape to the one we have long known. Again, with some superbly arranged interactive infographics. 

Russia’s position as a long-term energy supplier to Europe will likely never return to what it once was, in this analysis they consider the consequences of: ‘No Russian imports’, ‘Limited Russian imports’, and ‘Average Russian imports’. Among the variables considered is the volume of LNG cargoes currently available for purchase – one of the more pertinent questions as Russian gas increasingly looks to be rejected in favour of shipped cargoes from US, Australia and Africa. 

Oxford Energy Forum  – “The EU plan to reduce Russian gas imports by two-thirds by the end of 2022: Practical realities and implications”

While not strictly an article, and more so an academic paper – the Oxford Energy Forum’s assessment of the European Union’s plan to reduce gas imports by two-thirds is an extremely well-considered report. The 28-page paper delves into how the EU plans to approach the abyss of an energy crisis and their options in resolving these issues – written by four of the OIES Research Fellows, it is a an incredibly well-considered and relevant white paper.

Among the issues considered from an energy policy perspective are; what are realistic levels to expect LNG increases across 2022 and if supplies can match EU demand through cargoes, if alternate pipelines can cover the loss of Russian gas imports, alternate fuel options such as biomethane, to what level EU can reduce their demand, and how the EU’s demand reduction compares with the IEA’s plan.

IEA – “A 10-Point Plan to Reduce the European Union’s Reliance on Russian Natural Gas”

As mentioned above, the IEA has released a 10-point Plan in which they examine the routes to reducing energy dependency of the EU on Russia. Despite the EU reducing their percentage of Russian energy imports from 60% to just over 25% in the last 13 years, Europe has largely failed to develop a diversified energy mix that can stand on its own two feet – even as most oil majors are headquartered on the continent. Thus the options are even more limited now that Russia has acted aggressively, in turn requiring drastic responses. 

The IEA's approach acknowledges the challenges but perhaps leans too heavily toward the ability to replace Russian supplies with low-carbon alternatives. In the medium to long-term these energy sources are the objective, however short-term results require a greater injection of natural gas from alternative suppliers. Reducing European demand should be a priority, but again, this has been on the agenda of many states. Ultimately, the IEA 10-Point Plan reiterates much of what we already know, but seeks to add impetus to a slowing energy transition.

The report highlights:

1. No new gas supply contracts with Russia
2. Replace Russian supplies with gas from alternative sources
3. Introduce minimum gas storage obligations to enhance market resilience
4. Accelerate the deployment of new wind and solar projects
5. Maximise generation from existing dispatchable low-emissions sources: bioenergy and nuclear
6. Enact short-term measures to shelter vulnerable electricity consumers from high prices
7. Speed up the replacement of gas boilers with heat pumps
8. Accelerate energy efficiency improvements in buildings and industry
9. Encourage a temporary thermostat adjustment by consumers
10. Step up efforts to diversify and decarbonise sources of power system flexibility

PODCASTS

Columbia SIPA – “Oil, Gas, and the Russia-Ukraine conflict”

Columbia Energy Exchange is a podcast hosted by Professor Jason Bordoff, the founding director of Columbia University’s SPIA Centre for Global Energy Policy, which engages with the myriad of challenges facing global energy markets. In this particular episode, Bordoff is joined by; Angela Stent, Professor Emerita and the Director of the Center for Eurasian, Russian & East European Studies at Georgetown University, and Meghan O’Sullivan, Jeane Kirkpatrick Professor of the Practice of International Affairs and the Director of the Geopolitics of Energy Project at Harvard University’s Kennedy School. Both Stent and O’Sullivan have held senior advisory positions in the White House previously, as such they can engage with the vast complexities of the Russian invasion.

While this podcast is three weeks old and therefore not as up-to-date as more recent conversations, it contains such superb historical and geopolitical knowledge that it should not be missed. Stent and O’Sullivan’s insights explore the intersections between energy, economics, sanctions, refugee crises and much more.

NYT – Ezra Klein Podcast: Daniel Yergin Thinks Russia’s Days as an Energy Superpower Might Be Over

Anyone working within the energy sector has likely come across Daniel Yergin, Chairman of IHS Markit and global expert on energy economics and policy (and spouse of Angela Stent). Ezra Klein has established a superb reputation as a journalist, editor, political analyst and podcaster for the New York Times, and as the co-founder of Vox.

This episode delves into Russia's future as the world's third-largest oil and gas producer, questioning Putin's actions as being detrimental to the state's capacity to secure funds from their fossil fuel reserves while the global markets still want them. However, Russia is now under threat of losing it's biggest client in Europe (who was paying record market prices for oil and gas), and potentially being left supplying loose allies. China is in the driving seat and are quietly positioning themselves to take advantage of Russia's pariah status. 

All-in-all it appears, to Yergin, that the days of Russian oil and gas supremacy may be over and that this could act as the harbinger that a new energy era is upon us. 

UPCOMING WEBINAR

The Moral Dilemma: Is the Russian Invasion Forcing Investment into Oil & Gas?

To round off this round-up, we invite you to attend our webinar discussing the moral dilemma for states seeking energy security, do they accept Russia’s aggressions in favour of access to oil and gas. Or, do Russia’s aggressions provide a unique opportunity to undermine Russia’s position as an energy superpower, in turn restricting their capacity to fund war efforts.

With governments across Europe debating how to combat dependence on Russia's natural gas reserves, while simultaneously managing energy security needs and imposing severe sanctions on Russia, we will be hearing the views of industry leaders about the situation and their outlook for the sector.

We will welcome a fantastic panel of speakers:

• Alan Haywood, Senior Vice President ESG, bp
• Gunvor Ellingsen, MD, Business Development, Shell
• Jeremy Low, MD, Head of European O&G, Houlihan Lokey
• Nick Terrell, Industry Chair, Exploration Task Force
• Ross Cassidy, Vice President, Welligene (Moderator)