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Oil has an autocracy problem

Heather Grabbe is the director of the Open Society European Policy Institute.

In every emergency response, mistakes are made that can later turn out to be costly.

The prime ministers and presidents gathering in Brussels this week are desperate to stop the war in Ukraine and secure energy supplies for the European Union. And at the top of their agenda is expediently finding ways of cutting Russian gas and oil imports with as little damage to their own economies as possible. In their search for alternatives, however, leaders must not repeat the mistake of the past decades that have come back to bite them today.

The narrative that “Russia is a reliable long-term supplier” is finally dead, but the line that “gas and oil will continue for several more decades” still is not — and it should be.

Simply substituting one autocratic hydrocarbon supplier for others — such as Azerbaijan, Iran, Saudi Arabia and Venezuela — would damage the causes of climate, energy security and democratic governance. Europe’s thirst for Russian gas, oil and coal puts upward of $900 million a day into Russian President Vladimir Putin’s coffers. Switching suppliers will only fund other dictators tightening their grip on power, abusing human rights and threatening their neighbors.

Instead, the European Council needs to send a clear signal that the transition to clean energy is irreversible by directing the European Commission to make it top priority for the RePowerEU energy independence plan, due out in May.

In deciding on the trade-offs between keeping the lights on now and pushing the green transition, the key will be to choose what is best for long-term systemic change. Above all, EU countries must avoid long-term contracts and building new infrastructure for fossil fuels. In response to price spikes and the need to fill immediate supply gaps, there is a serious risk of countries building new lock-ins to gas, especially in EU members that are almost entirely dependent on Russian supplies, such as the Baltic states and Bulgaria.

Therefore, the plan’s main goal must be renewable energy from wind, sun and waves. Practically, it will be an enormous challenge to speed up the rollout of renewables, given estimates that even with a five-fold rate increase in capacity, Europe could take until 2025 to reach a supply of 600 terawatt hours to replace the energy generated from Russian gas imports. But renewables, green hydrogen and energy efficiency are where the investment needs to go.

To drive investment in the right direction, EU leaders must remain consistent in their signaling to industry and households that the phaseout of fossil fuels is irreversible and coming soon. While the manyfold increases in gas and oil prices are already driving rapid reductions in consumption, governments should not confuse the message by providing new subsidies. Rather, they should help by making massive investments in low-carbon transport and energy saving. The International Energy Agency has calculated that demand for oil could be cut by 2.7 million barrels a day in only four months, and there are many ways to cut gas consumption.

The strategy also needs to soften the global impact of the current crisis by reducing overall energy demand. Russia’s war has driven up energy and commodity prices globally, causing suffering, economic dislocation and even the risk of famine in some regions. The EU should not just use its buying power on global markets; instead, it should swiftly move to a circular economy that consumes less energy and fewer commodities, taking the pressure off poorer regions.

To address energy poverty, governments should also offer targeted social assistance and investment support for heat pumps and other green technologies, as well as buildings insulation, rather than blanket subsidies that maintain the toxic dependency on fossil fuels.

The EU has enormous potential to share energy across its borders and use it more efficiently as well, by investing in flexible power grids, better demand-response technology, electric vehicle charging, energy storage and the development of green hydrogen. The interconnection of European gas and electricity networks is also of vital support to Ukraine and Moldova, which successfully completed the synchronization of their power grids with the EU last week — a tremendous achievement in difficult circumstances. The EU should also work to improve reverse flows of gas with both countries to make it harder for Gazprom to hold them hostage.

Thanks to solidarity with Ukraine and sky-high fuel prices, public support for radical action on the energy transition has topped even previous steady growth. European leaders must seize this moment to commit to long-term clean energy independence by fundamentally changing Europe’s energy mix and setting clear price signals and firm phaseout targets, finally locking in the green transition and cutting funding to autocrats at the same time.

Europe has the solutions. Now is the time to invest in them wholeheartedly.

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