Reducing Fossil Fuel Dependence: A Key to Neutralizing Russia’s Leverage during the Invasion of Ukraine
Russia’s massive losses in occupying Bakhmut, a city of minimal strategic value, is the clearest sign yet that Vladimir Putin’s “special military operation” is unsustainable, and that his attempt to eliminate the Ukrainian state will not succeed. While it remains to be seen whether Bakhmut will go down as a 21st century Stalingrad, the reality of Putin’s fundamental failure means now is the time for Western nations to help Ukraine reinforce its successes. Ukraine’s supporters need to think in the long term, when it will be crucial to deprive Russia of the weapons it has relied on to prosecute this war – not just for Ukraine but, as the past year has shown, for their own national security.
The most powerful weapon in the Russian arsenal is a geopolitical advantage that, for all the comparisons to World War II, Nazi Germany and Imperial Japan lacked: its status as the world’s third-largest producer of oil and second-largest producer of natural gas. Putin has relied on oil and gas exports to defy Western sanctions and fund his war (oil and gas revenue made up 45 percent of the Russian federal budget in 2021). Furthermore, early in 2022, Russia started restricting its fuel supplies to Europe, aiming to send global prices skyrocketing and show the entire world the consequences of supporting Ukraine.
Neutralizing this leverage would remove a major political obstacle impeding Western nations from giving Ukraine all the aid it needs to defend its borders, especially given that significant material aid will likely remain necessary for long after the fighting ends. Moreover, the United States and its allies cannot tolerate Russia taking the world economy hostage to further its imperialist agenda, and the threat can only be removed by transitioning their economies away from fossil fuels as quickly as possible.
Europe was hit particularly hard by Russia’s de facto embargo, but the economy-wide inflationary reverberations were felt much further afield, including in the US, which has historically imported negligible amounts of Russian fossil fuels, and has itself recently become the world’s top oil and gas producer. Russia’s price manipulation was at least partially responsible for crude oil prices climbing from an already high $102.32/barrel in February 2022 to $119.03/barrel last May, and natural gas prices going from $4.69/MMBtu in February 2022 to $8.81/MMBtu in August. The price of gasoline in the US rose from $3.62/gallon the week the war began to a peak of just over $5/gallon in late June.
And yet, the NATO countries have, to their credit, held firm in the face of the Kremlin’s energy blackmail, taking decisive action to blunt the short-term effects of 2022’s energy crisis. European countries rushed to replace Russian imports (including with LNG from the US), and to promote fuel conservation and impose price controls; the US carried out the largest ever sale of oil from the Strategic Petroleum Reserve. Most notably, Western nations placed price caps on Russian exports of crude oil and petroleum products, hoping to limit Russia’s ability to earn export revenue while preventing a further rise in prices. This is the first time a policy like this has ever been attempted and, amazingly, recent data indicates it’s working: Russia’s oil and gas revenue in the first quarter of 2023 was down 45 percent year-on-year, and the ruble has fallen to roughly pre-war levels since last December. Overall, crude oil and natural gas prices have come down from their summer highs to levels below those at the war’s outset.
While these measures make sense as an immediate response to a crisis, accelerating efforts to reduce fossil fuel dependence will be essential in the future, if Russia is to be denied the use of its oil and gas wealth as a weapon of war. After OPEC imposed an embargo on oil sales to the US and other countries in retaliation for their support of Israel in the 1973 Yom Kippur War, Western countries responded with laws and policies to incentivize development of renewable energy sources, which over time have paid off massively, to the point that solar and wind are now among the cheapest sources of power in existence. Russia’s invasion is no less significant a crisis for the energy security, and thus the national security, of the democratic world. It must be the impetus for the next stage of alternative energy research and deployment.
Last year, the US took a transformational step toward reducing fossil fuel dependence with the Inflation Reduction Act, which provided unprecedented funding toward clean power, electric vehicles, and improved energy efficiency. Going forward, it is imperative for governments to ensure the reliability of a future fossil-free power grid, by funding research into improved battery technology, and deploying battery storage to complement clean power generation. In the US in particular, the need for nationwide permitting reform to address local barriers to building out energy infrastructure, from solar and wind farms to transmission lines, has recently come to the forefront. Another pathway to mitigate fossil fuel reliance lies in reducing the carbon footprint of buildings, through investing in efficiency retrofits and technologies like heat pumps. Finally, governments should support research into emerging technologies that promise to replace fossil fuels in the sectors that are hardest to decarbonize, such as green hydrogen.
The war in Ukraine has revealed that, in addition to the environmental and economic dimensions, fossil fuel dependence has dire implications for national security, and for the ability of the free world to safeguard a rules-based international order that respects each country’s sovereignty. Russia will not be the last petro-dictatorship that believes it can commit aggression beyond its borders with impunity because of its oil and gas wealth. For their own sake as well as Ukraine’s, the US and its allies must act now to avert this threat.
Author: Benjamin Reicher, Pomona College, United States of America
Phot: Paul Pastourmatzis on Unsplash
