Europe is still suffering from the consequences of its decadeslong dependence on Russian energy imports. But as the bloc continues to wean itself off of Russian oil and gas, Europe is facing new and compounding energy dependence threats from the United States and China. European policymakers are in a tough spot, literally and figuratively sandwiched between a massive and high-stakes battle for global energy supremacy.
When Russia illegally invaded Ukraine in February of 2022, Europe as a whole depended on the Russian producers for 40 percent of its natural gas. Setting and following sanctions on Russian energy and finding more reliable and responsible supply chains over the last four years has not been easy. Only last week, European leaders finally agreed to end imports of Russian gas to the bloc – but that total ban still won’t take effect until next year.
In the wake of these overnight embargoes on Russian energy, Europe has scrambled to intensify buildout of renewable resources. But this rapid expansion has led to major hiccups in the continent’s energy security, placing major strain on power grids and causing extreme volatility in electricity prices. To fill these gaps and shore up energy security over the past few years, Europe has eagerly increased its imports of liquefied natural gas from the United States. But now that decision, too, is seeming increasingly risky for European sovereignty and resilience.
“Europe’s energy security is being redrawn by shifting global power plays – from America’s energy dominance to China’s technological monopoly,” the German Council on Foreign Relations warned in a memo published earlier this week. “Once considered tools of cooperation, energy resources and technologies are again being used for leverage.”
In general, global geopolitics are trending toward an era of protectionism and nationalist policy, with potentially disastrous results for net energy importers. And Europe, which has clung to a free-trade ethos, is at risk of being caught in the crossfire between the United States and China as the world’s two biggest economies pull in opposite directions – one toward being the world’s first electrostate and the other toward petro-dominance. And both want to ensure that the entire world follows suit.
While the United States was once considered a safe lifeline away from the tyrannical and unstable energy powers of Russia and China, experts contend that those dynamics are rapidly changing. The Council expresses genuine concern that the United States will now do anything to ensure its own energy dominance – including but not limited to the aggressive annexation of Greenland – without a second thought for its European alliances. But the alternative, cozying up to China, isn’t sounding so great either.
As a result, the Council contends that “Germany should begin to consider US energy dominance, alongside Russian fossil statecraft and Chinese technological consolidation, as a potential systemic risk.”
Trump’s aggression toward Greenland, in particular, has been a major pivot point for European leadership, pushing the continent to pursue energy independence with renewed vigor. Accordingly, nine countries with stakes in the North Sea have doubled down on the development of large-scale offshore wind projects that would include the development of a grid connected to multiple European nations.
While this new agreement is focused on strengthening Europe’s energy independence, leaders say that it doesn’t signal a desire to end trade relations with the United States. EU energy commissioner Dan Jørgensen has said: “We are not against trading with the US — on the contrary. But we are of course aware — and this goes for all countries, not only the US — that we are not aiming at replacing one dependency with a new dependency. We want to grow our own energy and our strategy in the future is to become free of gas.”
In the meantime, Europe is also keen to develop more diverse suppliers and “mutually beneficial energy partnerships with like-minded partners eager to avoid asymmetrical and transactional dependencies,” according to the German Council on Foreign Relations.
By Haley Zaremba for Oilprice.com
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