Ruggero Schleicher-Tappeser, May 2022, sustainablestrategies.substack.com
Because of the climate, the global economy must save a higher share of coal, oil, and natural gas every year than Russia exported in 2021
This is the first part of:
Russia, climate, and resources: Europe must grow up
1. End of the fossil era: replacing Russian supplies is just the beginning
2. Deep restructuring of the energy system: urgent and possible
3. Democracy in times of disruption: The role of Europe
It is an adaptation of the long opening post of this Blog in German, originally posted on April 14. Many points touched on here will be treated in more detail in future posts.
The replacement of fossil fuels from Russia is only the beginning. Because of the climate, the global economy must save a higher share of coal, oil, and natural gas every year than Russia exported in 2021. Security and climate policy can no longer be considered separately.
Often wrong guesses concerning the quantities involved lead to wrong general conclusions. Let’s, therefore, start with some figures.
In 2019, the European Union imported over 60% of the energy it consumed (90% of natural gas, 97% of oil, and 43% of coal consumption).
And Russia was the main provider: One-quarter of total EU energy consumption came from Russia, more than one-tenth was Russian gas; Russian coal accounted for only two per cent. In other terms: 46% of the EU natural gas consumption came from Russia, 39% of the oil consumption, and 17% of total coal consumption. Not to speak about 40% of uranium supplies coming from Russia and Kazakhstan.
Switching to the global level, the shares are smaller but still significant: on the world fossil energy markets, Russia supplied 13% of traded oil, 16% of traded coal, and 23% of natural gas – together, 16% of fossil energy on the world market and 5% of global fossil energy consumption came from Russia.
On the one hand, their elimination will lead to massive price increases in the short term. On the other hand, this is only a tiny foretaste of what is in store for us anyway: If global fossil energy consumption is reduced every year by the same percentage as the complete elimination of Russian energy exports would account for this year (5%), the CO2 budget still available to humankind (if the 1.5-degree target is to be met) will already have been used up by 2030 – and emissions will then still amount to two-thirds of today’s level. (The 1.5-degree target, recently reaffirmed in the international climate negotiations in Dublin, means that emissions of climate-damaging gases will be limited to a total amount [CO2 budget] that, with a chance of 50%, lets expect that global warming caused by humans will not increase to more than 1.5 degrees above pre-industrial levels.)
Actually, for reaching the 1.5-degree target, an annual reduction in fossil fuel consumption of at least 10% would be necessary – this would reduce consumption to 5% compared to today by 2050, while the budget available today would still be overdrawn by about one-third. For comparison: Germany has set emission reduction targets for 2030 that are not sufficient to achieve the 1.5-degree target but require that emissions be reduced by 6% on average each year. The European Union’s Fit for 55 program targets a linear reduction of greenhouse gas emissions to zero by 2050, with an intermediate goal for 2030 of a 40% reduction compared to 2005.
At the global level, therefore, throughout the coming decade, we need consumption reductions every year that are significantly greater than present Russian exports. However, Europe is much more dependent on Russian exports than other parts of the world. That is why exceptionally large adjustments will be necessary in the short term. This is especially true for natural gas.
Oil and coal are easier to transport and store than gas. For these, flexible international markets have emerged in which production volumes also vary. A reduction in Russian exports of coal and oil mainly leads to a global shortage and thus to higher prices – which are, however, easier to cope with in the EU than in poorer countries. The transport of gas, on the other hand, requires fixed pipelines or, for transportation by ship, complex liquefaction and special terminals, which considerably restricts a flexible adjustment of the markets. Considering short-term replacements of Russian fossil fuel exports, the focus is therefore on the problems of European gas supply.
There are also clear differences between the EU member states: if one assumes an optimal distribution in a functioning internal market, then the different energy supply structures alone show very different dependencies: While Italy is dependent on Russian fossil fuel imports for 32% of its total energy consumption because of its high share of natural gas, the dependence on Russia for all fossil fuels together is only 19% in France, while Germany and Poland are near the European average (26%) with 28 and 26 per cent. Natural gas from Russia accounts for 7 per cent of total energy consumption in France and Poland, 11 per cent in Germany and 18 per cent in Italy when assuming a shared import pool (all figures for 2019).
Looking at the actual national import flows (which may not only be due to contracts but also more permanently due to the geography of pipelines and LNG terminals), even stronger dependencies become apparent at points. In 2019, actual gas imports from Russia in relation to total energy consumption in Germany amounted to 14%, slightly more than the European average (11%). Italy and the Czech Republic were much worse off at 20%, the Netherlands at 18%, France at 4%, and Belgium and Spain at 3%. Poland, which is calling for an import ban, is also better off than the European average at 8%. Therefore, a common European strategy is difficult to imagine without efforts for intra-European equalisation.
The extent to which this depends on individual infrastructures is illustrated by the fact that there is not yet a single LNG terminal in Germany. At the same time, the functioning Nord Stream 1 pipeline has a capacity of 55 billion cubic meters per year, which can cover 34% of EU gas im- ports from Russia (2019). Regionally, there may well be painful shortages of oil products as well: Eastern Germany, for example, is supplied by the refineries in Schwedt and Leuna – if the Russian supply is lost here, the supply of petrol and diesel is likely to become very difficult.
So, to replace Russian imports, the EU needs to find other solutions for a good quarter of its energy consumption in the short term. That is more than twice as much as the global annual reduction in consumption would have to be in order to reduce emissions to 5% by 2050.
On the one hand, it is therefore legitimate to initially replace some of these imports with imports from elsewhere, but on the other hand, for climate reasons, actual fossil fuel savings of this amount would need to be realised within two years.
All figures quoted so far refer to 2019. Provisional data for 2021 show that the argument is nevertheless still valid today.
Also published on https://sustainablestrategies.substack.com. For discussions see there.