Europe’s Energy Security and Climate Change: An Opportunity or a Threat? – Part I

Placing Europe’s energy strategy in the historical context of energy security

This is the first of two blogs written for the University of Westminster discussing Europe’s energy security in times of climate change threats. The first part explains the challenges which occur for the energy sector by the changing climate and compares climate change to other historical challenges of energy security. Part II of the series argues that climate change, in fact, helps Europe to overcome path-dependent stasis and that the changes now implemented, in the long-term, will guarantee better security than the current system.

Read part two of the series.

Introduction

Climate change is shaking up the energy market and with this also the conventional concept of energy security. Heavier storms, droughts and other natural disasters threaten energy infrastructures such as drilling platforms, pipelines and the grid (Klare, 2015). Ironically, those means of energy are now threatened by the climate change which have been identified as the main culprit of the anthropogenic impact on the climate (Goldthau, 2013) – “a blowback” as Klare (2015) puts it. This implies that to actively combat climate change and to guarantee energy security in the future, an energy transition is needed. Based on scientific forecasts about the anthropogenic influence on the climate, 195 states agreed to reduce greenhouse gas (GHG) emissions and to limit global warming to well below 2°C by signing the Paris Agreement under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC). A driving force behind those climate change negotiations is the European Union (EU) which, for themselves, set even more ambitious targets. In the eyes of some European states, those targets, namely a climate-neutral economy by 2050 (European Commission, 2018), bear an even greater threat to their energy security than climate change itself (Pérez, Scholten and Stegen, 2019). Phasing out of domestically extracted coal as well as phasing out of nuclear power stands high on the agenda in many European countries. As a result, a gap in supplies may occur which subsequently means that more energy needs to be imported. This would further increase dependency on other countries – a dependency that has already increased in recent years, from 47% of the consumed energy imported in 2000 to 55% in 2017 (European Commission, 2019a). Russia thereby plays an important role as it is by far the biggest supplier of oil, gas and solid fossil fuel (Katona, 2017). This is in itself another energy security threat for the EU as Russia’s state capitalism in the 21st century is not favouring energy importing countries agenda. This essay sets Europe’s current understanding of energy security in the historical context and shows, how the EU has mastered previous threats. At the heart lies the question of whether climate change as a catalyst for the energy transition poses a major threat for Europe, or if it offers, in fact, the greatest opportunity ever to solve most of the historical challenges associated with energy security.

Europe’s energy security from a historical perspective

As described by Anceschi and Symons (2012), energy security is a “dynamic socially constructed phenomenon” which results in endless individual meanings and implications for governments. Buzan (1998), sketching on a social constructivist perspective, says energy security is “an arena where different voices seek to securitize their particular understanding of key risks and threats.” It is often defined with 1) a noninterrupted access to the modern energy market, 2) a price that promises economic growth, and 3) energy that is as environmentally sustainable with as few externalities as possible (e.g. health costs). For the EU energy security is generally understood as energy efficiency, sustainability and security of energy supplies (Winzer, 2012). Perhaps the most important distinction can be drawn between security for energy independent, energy exporting, and energy importing countries. For the latter, energy security is particularly delicate as their economies and citizens are directly dependent on foreign states (International Energy Charter, 2015). The level of risk varies, in turn, on many factors (Anceschi and Symons, 2012). This chapter demonstrates how energy importing countries have responded to changing parameters in the last century.

Energy security, although not necessarily linked to the oil age, entered the limelight of policymakers during and after the first World War (Dannreuther, 2015) where uninterrupted access to fuel was decisive to win the war. Especially after world war II, the 20th century was marked by an unprecedented economic boom in the western world (DeLong and Bradford, 2000). One of the key factors behind this was the supply of cheap oil, which lubricated the factories, provided warm homes and found an almost universal use all over the value chain (plastic products, drugs, fertilizers, paint, etc.) (Dannreuther, 2017). For European countries, oil was almost exclusively supplied by Middle Eastern countries and it had to be ensured that the “black gold” flew into the West without interruption. The former colonial powers Great Britain and France and, amongst all, the USA, established themselves as hegemons in the region and guaranteed secure access and transportation (Dannreuther, 2015). The bulk of global oil extraction and production was done by seven western oil companies, also known as the seven sisters (described in Oil: A Cultural and Geographic Encyclopedia of Black Gold, 2014). This neo-colonial form of energy security worked from the perspective of an energy importing country excellent until, in the late 1960s, resistance formed. This was bundled in particular in the formation of the Organization of Petroleum Exporting Countries (OPEC), which suddenly controlled over 50% of the world’s oil supply. It got worse in the early 1970s when many oil-producing countries began to nationalize Western oil companies (Dannreuther, 2015). The European understanding of energy security was visibly at risk and when the oil price quadruplet within a short time, Europe faced its first serious energy security challenge. To respond to the threat, energy diversification was pushed forward with nuclear energy, for instance in France, experiencing a boom (Anceschi and Symons, 2012). Also, investments in the gas market were made and new pipelines developed – and renewables, too, were seen as valuable supplementation to oil (Dannreuther, 2017). Possible war interventions were also being considered, especially in the United States (Dannreuther, 2017), and the International Energy Agency (IEA) was set up as a counterweight to OPEC (International Energy Charter, 2015). Western International Oil Companies (IOC) were sent out to search for new oil wells aiming at reducing the dependency on Middle Eastern oil – and they delivered. New findings in the North Sea and the Gulf of Mexico meant that part of the oil could now be sourced from Norway (compare with statistics from European Commission, 2019a) and other parts of the world. OPEC, as became obvious soon, had structural weaknesses which could not be concealed in the long run and consequently enabled Western energy importing countries to re-establish their desired neo-liberal order (Dannreuther, 2015).

Neo-liberalism worked well in the 1980s and 1990s and some experts already rejoiced that energy security issues were a matter of the past (Dannreuther, 2015). However, this was a fallacy that became apparent in the new millennium. Under leaders such as Hugo Chávez and Vladimir Putin, a re-nationalization wave hit the extractive industry (Chernykh, 2011). This resource nationalization led to a dwindling influence of IOC and National Oil Companies (NOC) were now dominating the oil and gas market (Dannreuther, 2015). Liberal capitalism gave way to state capitalism and additionally, the demand for energy in developing countries such as China and India rose sharply (International Energy Charter, 2015). The power shift in both supply and demand led to a sharp rise in the oil price culminating at $147 for a barrel in June 2008. Oil was no longer cheap and the old threat of energy insecurity was back, for the second time, energy security became the narrative of Europe’s political agenda (Dannreuther, 2015). The peak of the threat was not yet reached, though. These days, there is a clear consensus that climate change is at least accelerated by mankind and that fossil fuel combustion is the main driver (compare with various reports, such as IPCC, 2017). Decarbonizing our way of living thus seems to be the only option to face the climate challenge and Europe is eager to take the lead towards a climate-neutral future (European Commission, 2018; Goldthau, 2013). Decarbonizing, however, means abandoning coal-fired power plants, promoting electrification with clean energy sources, and limiting oil and gas consumption as much as possible. Simultaneously, many concessions for nuclear power plants are about to expire in the next decade and some European states do not intend to further push a nuclear energy agenda (for instance Germany, described in Appunn, 2018). All those issues combined inevitably raises the question if Europe’s energy security is existentially threatened. The EU answers with a range of plans and strategies. The Energy Union aims at providing secure, affordable and clean energy, the Clean Energy for all Europeans package sets a new legal framework to facilitate the clean energy transition, and the 2050 Long-Term Strategy requests for a climate-neutral economy by 2050 (European Union, 2018). If those plans will work out has to be seen in the future, one thing is already clear, though: Europe has entered into a new energy security era.

Is a climate change caused energy transition a threat to Europe’s energy security?

While the prior chapter explained the need for an energy transition, there is also criticism questioning the feasibility of a climate-neutral economy in the EU. This chapter outlines and challenges potential barriers towards and threats of a low carbon economy, taking into account energy security aspects from an economic, environmental, social, and political point of view.

An often-mentioned argument against renewable energy sources is the unreliable production of electricity. Most renewables only produce variable energy (intermittent energy sources), which means that they need to be supplemented with flexible and reliable conventional power plants such as gas plants in order to constantly match electricity supply and demand (Dannreuther, 2017). These days, subsidized renewables tend to financially outperform conventional power plants which makes gas investments uninteresting for investors (Winkler et al., 2016). If no investor invests in gas plants anymore, though, energy supply is at high risk. A counter-argument here is that interconnectors, linking the European grid system, will help to erase the risk of intermittent energy (Ofgem, 2019). From a neoliberal perspective, an intertwined European grid also ensures that the cheapest rates are applied to all clients in the EU and it offers more stability and improved cooperation amongst the EU countries (Pérez, Scholten and Stegen, 2019).

Renewable energy sources are also not the holy grail when it comes to a zero-impact-idea for the climate. Although renewable energy sources indeed have a much smaller impact on GHG emissions, they still cause damage to the environment. Their construction often involves a lot of minerals which need to be conventionally extracted (see for instance Business & Human Rights Resource Centre, 2019) and as the first generation has not yet reached the end of their life cycle, it is unclear what environmental impact their decommissioning will bear (Shellenberger, 2018). The raw material used in renewable plants mainly comes from developing countries and some of these minerals are scarce (Bloomberg News Editor, 2017). Also, windmills are responsible for the death of thousands of birds and bats every year and hydropower requires the flooding of entire valleys, which is why many environmentalists are not in favour of wind and water energy (Goldthau, 2013). It is therefore not possible to claim that renewables will erase dependency on other nations, nor that the proposed low carbon economy has no environmental impact. To counter those points one can argue, though, that already today a big share of the materials used in renewables are recycled and that further R&D will help to minimize the environmental impact further (Vekony, 2019). Furthermore, decommissioning a nuclear power plant, just as a comparison, takes between seven and 60 years (Gospodarczyk and Kincer, 2017). And whilst windmills bear some risk for birds and bats, the impact seems to be minuscule compared to road traffic, buildings, and natural predators such as cats (compare with Dienste, 2019).

Dannreuther (2017) points out that the energy transition particularly affects the coal industry. While for a climate-neutral economy phasing out of coal-powered plants seems to be elementary, it is precisely this source that is vastly available in Europe. From an energy security perspective, this is a big threat as many people working in this industry will lose their jobs and filling the supply gap that coal leaves will, at least in the medium term, have to be covered with foreign energy, most probably Russian gas. Poland for example heavily relies on its coal resources for which also up to 100.000 employees are at stake (Pérez, Scholten and Stegen, 2019), consequently Poland has little interest in phasing out coal. And while the overall oil-dependency may decrease during the energy transition, it is not the case for gas (Deign, 2018). New pipelines, for instance Nord Stream 2, express that many European countries still believe in Russian gas for decades to come. The energy transition, hence, will not decrease dependency on foreign energy and believing that energy security means the same for all EU countries, is naïve, too. While there is an EU-wide approach of fighting climate change and realising the energy transition, each of the 28 EU countries also follows an own national energy agenda (Pérez, Scholten and Stegen, 2019). Whereas Malta obtains 95% of its energy from abroad, Estonia and Denmark import less than 15%. And while Germany has a comparably high share of gas imports, Sweden and Cyprus are dominated by imports of oil (European Commission, 2019a). To say that Europe’s climate change caused energy transition is a blessing, hence, is wrong. Nevertheless, I would also counter this paragraph, arguing that renewables overall will create more jobs per energy unit produced than it is currently the case with fossil fuels, the number of jobs is indeed expected to rise fourfold (Pérez, Scholten and Stegen, 2019). And for Poland, it is to say that caused by their coal consumption they account for 33 of Europe’s 50 most polluted towns (Diaz, 2019). This increases health costs that Poland’s’ citizens need to pay for and it surely does not align with the energy securities’ idea of causing as little externalities as possible.

I conclude this chapter with a pure opportunistic view on climate change and fossil fuels in Europe. Path dependencies in the energy sector are closely linked to the fossil fuel industry. The current infrastructure and technological lock-ins as well as a very strong oil, gas and coal lobby (Dannreuther, 2017) make it very tough for policymakers to achieve a turnaround. We shall not forget that neither gas nor renewables are a new invention. Whilst they have been around for a long time, they did not manage to break the monopoly of oil or coal. And last but not least, climate change brings many positive externalities to Europe. Thanks to a milder climate and less snow, more agriculture land will be available in the summer months and less heating will be needed in the winter (Klare, 2015). Melting perm frost and ice caps will additionally help to find and exploit new mineral fields and even opening up new sea routes in the artic (Frederiksen, 2019).

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