I

n the wake of geopolitical tensions and ongoing energy crises, Europe finds itself at the forefront of grappling with the phenomenon of energy blackmail, a strategic manipulation of energy resources for political and economic leverage, according to a new report by Danish Institute for International Studies. While the term gained prominence following the Russian invasion of Ukraine in 2022, its roots run deeper, predating Vladimir Putin’s tenure in the Kremlin.

Energy blackmail, characterized by coercion and market manipulation, has been a recurrent tool employed against European countries since the 1990s. The weaponization of energy resources, primarily oil and natural gas, has posed significant challenges to European energy security, with Russia often at the center of such tactics.

The European Union has been at the forefront of efforts to diversify its energy supply and reduce dependence on Russia, particularly since the events of 2022. However, the threat of energy blackmail persists, prompting EU policymakers to reassess strategies and implement countermeasures to safeguard energy security.

EU response

In response to the threat posed by energy blackmail, the EU has undertaken several measures aimed at bolstering energy resilience. These include diversifying supply routes, accelerating the deployment of renewable energy sources, investing in innovation, and enhancing cybersecurity measures to protect digital infrastructure.

The growing interconnectedness of energy systems, while enhancing efficiency, also introduces new vulnerabilities, particularly in the realm of cybersecurity. As such, comprehensive network management strategies and robust cybersecurity measures are crucial in safeguarding against cyber threats to the energy sector.

Complex landscape of energy geopolitics

As Europe navigates the complex landscape of energy geopolitics, the need for proactive measures to counter energy blackmail has never been more pressing. By implementing effective strategies and investing in resilience, the EU aims to ensure energy security and mitigate the risks posed by geopolitical tensions and digital vulnerabilities.

As the global energy landscape continues to evolve, Europe remains committed to safeguarding its energy sovereignty and resilience in the face of emerging threats and challenges.

The report highlights the ongoing efforts of European policymakers to address the threat of energy blackmail and underscores the importance of proactive measures in ensuring energy security amidst geopolitical tensions and digital vulnerabilities.

Source: Danish Institute for International Studies

R

ecent escalations in the Red Sea with attacks by Yemen’s Houthi group have led to a heightened sense of caution among shipping companies, with some LNG tankers diverting from the crucial East-West trade route. The Suez Canal, connecting through the Red Sea, is vital for global trade, with about 12% of world shipping traffic and a significant portion of LNG cargoes passing through it annually.

In 2023, a substantial amount of LNG trade between the Atlantic and Pacific Basins has utilized the canal, indicating its critical role in energy supply chains. Qatar, the United States, and Russia are the primary LNG shippers through the Suez, with Qatar being the main exporter in the east-to-west direction.

The disruptions have not immediately impacted LNG prices, which remain steady, likely due to high inventory levels in Europe and Asia. However, oil prices have experienced a slight rally, and shipping costs have surged, with insurance war risk premiums increasing fivefold due to the risks associated with passing through the affected waters.

Closely monitoring the situation

Market players are closely monitoring the situation, with the consensus being that unless the disruptions persist for an extended period, significant market shifts are unlikely. The potential rerouting of shipments, such as those from Qatar, could lead to longer journey times and affect supply schedules.

While the crude and oil products markets are wary of the potential need to seek alternative sources, LNG market participants expect trade to be largely unaffected. However, Atlantic LNG supplies to Europe could face more significant strategic adjustments than Qatari supplies.

The situation remains fluid, with a U.S.-led international force patrolling near Yemen to mitigate risks. The shipping industry and global markets are keeping a vigilant eye on developments, as any prolonged instability could lead to broader implications for energy transportation and costs.

Potential perils

Energy Aspects’ Jake Horslen, an expert in LNG analytics, pointed out that the potential vulnerabilities in Suez Canal transit are more pertinent to the flow of Atlantic-origin LNG to European recipients than to any hindrance of Qatari LNG reaching the same markets.

Takahiro Honjo, leading the Japan Gas Association, recognized the potential perils at a recent press event but minimized the prospect of an imminent supply shortfall due to these maritime tensions.

To encapsulate, while the industry recognizes the inherent risks amidst the current instability in the Red Sea, the consensus suggests no immediate alarm. Market stakeholders are navigating the situation with prudence, prepared for a measured response to the shipping disturbances.

Source: Reuters

Ever wondered why the prices of commodities keep rising? In the realm of commerce, the change of prices is a constant. However, when the prices of a multitude of goods and services rise collectively, a phenomenon known as inflation emerges.  If you feel like your money doesn’t stretch as far as it used to, that’s the erosion of currency value over time that we call inflation. But here is the twist – even when inflation is slowing down, prices aren’t necessarily falling; but rather, increasing at a slower pace.

Recent times have witnessed a noteworthy shift in economic discourse, marked by a renewed concern over inflation. After a prolonged period of perplexity surrounding persistently low inflation, the onset of the COVID-19 pandemic instigated a substantial departure, introducing an era characterized by stubbornly high inflation. This surge in prices is linked to various factors.

These factors for the inflationary trend can be interpreted along the lines of supply and demand. On the supply side, disruptions stemming from COVID-19, such as logistical challenges and workforce shortages, converged with spikes in energy and food prices induced by geopolitical events, notably the Russian invasion of Ukraine.

Simultaneously, on the demand side, substantial financial injections into households and enterprises by governments during the pandemic aimed at mitigating the impacts of lockdowns and layoffs resulted in an increased money supply, potentially contributing to the inflationary surge.

This economic shift, has exacerbated financial burden as a result of pivotal commodities experiencing substantial price increments—such as housing, energy, and food, particularly for those whose income has not kept pace with inflation. In many countries around the world, peaking inflation had threatened governments with social unrest, noteably in Sri Lanka ,Pakistan and numerous countries in Latin America, as well as protests in relatively high income countries like the U.K.

As inflation persists, in this month’s book bundle we examine books that demystify inflation, delve into unexplored trends, address common policy mishaps, and offer solutions to aid both policymakers and citizens to sustainably navigate these seemingly precarious times.

Inflation: What It Is, Why It’s Bad, and How to Fix It unravels the complexities of the most significant inflationary upheaval in over four decades, a phenomenon that has gripped headlines and left many grappling with the tangible impacts on their finances. Against the backdrop of the cost-of-living surge triggered by the COVID pandemic, the book sounds the alarm about the potential resurgence of a “Great Inflation,” with some observers expressing concerns of an even more ominous descent into hyperinflation that has historically devastated nations.

In response, the authors, Steve Forbes, Nathan Lewis, and Elizabeth Ames, engage readers in a captivating discussion that not only answers pressing questions but also charts a course for preparing for an uncertain future.

The authors draw on their expertise—Forbes as the chairman of Forbes Media, Lewis as an internationally recognized authority on money and taxation, and Ames as an accomplished author and journalist—to challenge prevailing misperceptions that have contributed to the current crisis.

They confront the widely held belief that central banks can spur prosperity by conjuring money “out of thin air” and debunk the notion that a certain level of economic “stability” necessitates “a little inflation.” These ideas, treated as sacrosanct in Washington for decades, are scrutinized in detail in Inflation exposing why they are flawed and how they have fueled the existing challenges.

The book critically examines the heedless money-printing and underscores the perilous path such policies could lead us down. Through a compelling blend of examples drawn from contemporary headlines and historical episodes, Inflation offers a real-world exploration of the subject, directly addressing the everyday concerns of individuals dealing with the tangible consequences of rising prices. Moreover, the authors provide practical steps that readers can take to protect their wealth.

Steve Forbes, Nathan Lewis, and Elizabeth Ames, Inflation: What It Is, Why It’s Bad, and How to Fix It (Encounter Books, 2022) ISBN: 9781641772433, 196 pages

In The Inflation Myth and the Wonderful World of Deflation, Mark Mobius embarks on a journey that might just prove everything we conventionally know about inflation wrong, presenting a thought-provoking narrative that questions the very foundations of our economic understanding.

In a world marked by rapid technological advancements, Mobius contends that our traditional metrics for measuring inflation are no longer adequate, urging readers to reconsider long-held beliefs about the economic phenomenon.

Mobius explorates of the shifting landscape of technological innovation driving the creation of cheaper and superior products. The heart of his argument lies in the assertion that these transformative changes are not accurately reflected in the ways we currently measure inflation. The book boldly contends that our contemporary understanding of inflation is nothing short of a myth.

One of the book’s standout features is its illumination of the political dimensions of inflation measurement. Mobius exposes the unsettling reality of governments manipulating and exploiting inflation figures to align with their economic agendas. He delves into the extreme challenges involved in gathering accurate data for inflation measurement, highlighting the inherent inaccuracies that result from these endeavors.

A crucial point of contention raised by Mobius is the fallacy of relying on currencies as a measure of inflation when these very currencies are continually being debased by the governments that issue them. This revelation challenges readers to reconsider the reliability of traditional economic indicators and prompts a deeper examination of the intricate relationship between currency devaluation and inflation.

Most significantly, Mobius underscores the impact of technological advancements and automation on the continuously falling costs of goods and services. The book articulates how these advances contribute to a deflationary trend, contrary to the prevailing narrative of perpetual inflation. Through compelling arguments and well-supported evidence, Mobius encourages readers to recognize the transformative power of technology in reshaping our economic landscape.

Mark Mobius, The Inflation Myth and the Wonderful World of Deflation (Wiley, 2020) ISBN: 978-1-119-74142-8, 256 Pages

Another important myth-busting source is We Need to Talk About Inflation: 14 Urgent Lessons from the Last 2,000 Years. In the book, economist Stephen D. King delivers a compelling exploration of the resurgence of inflation, exposing the desperate gullibility of central bankers, finance ministers, and the collective failure to learn from historical lessons. The book dismantles the widespread assumption that inflation was a relic of the past, revealing a new economic reality that threatens to exacerbate wealth inequality on a global scale.

In a world where investors, monetary authorities, governments, and policy makers had collectively believed inflation to be a thing of the past, King highlights the startling emergence of a poisonous economic reality. This new reality brings with it the ominous specter of increasing wealth inequality, forcing individuals worldwide to confront the profound implications of this unforeseen turn of events.

King, having been among the few to sound the alarm ahead of the latest inflationary upheaval, delves into the roots of the current situation. We Need to Talk About Inflation becomes a beacon, shedding light on the key lessons from history that policy makers either ignored or chose not to heed. From the days of ancient Rome through the American Civil War and up to the asset bubbles of today, King traces the common threads of inflation, attributing its resurgence to policy errors, sovereign greed, and a collective loss of faith in currencies.

The book stands as a sobering reminder that the economic challenges we face today are not unprecedented; they are deeply rooted in a historical continuum of bad judgment and misunderstanding. We Need to Talk About Inflation serves as a crucial intervention, cutting through centuries of oversight and misinformation to offer actionable insights that can be implemented now.

Stephen D. King, We Need to Talk About Inflation: 14 Urgent Lessons from the Last 2,000 Years (Yale University Press, 2023) ISBN: 9780300270471, 240 pages

Paul Mattick’s The Return of Inflation: Money and Capital in the 21st Century emerges as both a historical retrospective and a contemporary analysis, offering a profound examination of what is undeniably the defining economic concern of our time.

Mattick’s work delves into the surprise surge in price increases. Amidst the varying perspectives on the current economic landscape, there is unanimous agreement on one aspect: the imperative to curb inflation, even if the methods to achieve this goal are a subject of contention.

The Return of Inflation distinguishes itself by placing contemporary events within the broader context of capitalism’s history. Mattick skillfully entwines the past and the present, providing readers with a comprehensive understanding of the economic forces at play. An exploration into the nature of money serves as a foundational element of the book, offering readers a concise and jargon-free grasp of recent inflation trends and the strategies implemented to manage them.

What sets this book apart is its ability to demystify the complexities surrounding inflation. Mattick takes the reader on a journey through the historical antecedents of inflation, shedding light on the evolving dynamics of the economy. Through this lens, the book illuminates the state of our contemporary economic landscape, offering insights that bridge the gap between past and present.

Mattick’s insightful exploration provides a nuanced perspective on the current economic challenges and offers a valuable resource for those seeking clarity on the defining economic concern of our time.

Paul Mattick, The Return of Inflation: Money and Capital in the 21st Century (Reaktion Books, 2023) ISBN: 9781789147919, 184 pages

I

n an analysis by Noam Raydan of the Washington Institute, the recent Gaza conflict’s repercussions on energy security within the East Mediterranean have been brought to the forefront. With the region already in the limelight for its promising natural gas reserves and cooperative energy projects, the escalation has triggered concerns about the stability and sustainability of these developments.

Before the conflict, Israel had made substantial progress in its gas production, which, coupled with agreements like the U.S.-brokered maritime boundary deal allowing exploration in previously disputed waters, pointed towards a new era of regional energy cooperation.

However, the Gaza war’s outbreak has led to immediate practical implications, such as the suspension of operations at Israel’s Tamar gas field and disruptions in oil import routes, underlying the fragility of energy infrastructures in conflict zones.

Egypt and Lebanon

The ramifications extend beyond Israel, with Egypt’s energy needs and Lebanon’s precarious situation highlighting the interconnected nature of regional energy networks. Lebanon’s ongoing financial crisis has already put a strain on its energy sector, and any potential spillover from the conflict could exacerbate the nation’s plight.

The analysis underscores the need for East Mediterranean countries to reassess their energy strategies, moving away from ‘gas pipe dreams’ to more immediate and feasible reforms. The situation serves as a reminder of the region’s vulnerability to geopolitical shifts and the necessity for resilient and diversified energy policies.

Noam Raydan’s comprehensive take on the issue provides a sobering reminder of the intricate link between regional stability and energy security, urging stakeholders to prioritize sustainable and conflict-resistant approaches to energy development.

Source: The Washington Institute

S

ince 2020, energy markets have faced many serious challenges. First, the COVID-19 pandemic, then, rising demand accompanied by faster-than-expected normalization, and finally, the Russia-Ukraine war, which led to record low and high prices. All this was reflected both in energy-exporting and energy-importing countries. If we add to this the discussions about increasing global warming and the need for urgent action, one question comes to the fore: should energy investments be focused on renewables or hydrocarbons?

Renewables to reduce import dependence

In the 2000s, investment in renewable energy resources began to increase with the aim of reducing dependence on imported energy supplies. As concerns about energy dependence were combined with fears about climate change, investment trends in solar and wind projects accelerated. In 2004, investments, mainly in developed countries, focused on wind energy and were just over $50 billion; by 2021, renewable energy investments accounted for about 70% of global electricity energy investments.

Over this period, several oil and gas companies have been under pressure to shift their investments to renewables or to invest in projects that reduce greenhouse gas emissions from their operations. However, by 2020, only 1% of these companies’ investments were in clean energy.

In 2022, the global energy crisis, exacerbated by the war in Ukraine, led to the largest increase in renewable energy investment after 2020. It is important to note that China and the EU commissioned a large share of the newly installed renewable energy capacity, which increased by around 50 GW globally. In fact, China has been the world’s largest single investor in renewable energy for more than a decade.

China has become a leader in solar and wind power, not only by investing in power generation, but also by allocating significant resources to their technologies. China is also building the world’s largest battery factories across the globe to meet the demand for electric vehicles and energy storage. Although the current demand for Chinese electric vehicles is almost half of the capacity being built, China clearly has ambitions to create a long-term monopoly on battery technology.

The EU is one of the regions with the highest return on investment in renewable resources. For the first time in 2022, the 27 European Union countries produced more electricity from wind and solar power plants alone than from natural gas-fired thermal power plants. More importantly, the electricity produced from both sources exceeded the amount of electricity produced from coal in the same year. When other non-fossil energy sources such as hydro and nuclear are added to wind and solar, the share is around 55%—also a historic level for the EU.

Investment continues as demand for fossil fuels recovers

The fact that investment in renewables and the amount of electricity generated are increasing does not mean that demand for fossil fuels is decreasing. Although the impact of the pandemic on economies is still being felt, oil demand is approaching pre-Cold War levels of 100 million barrels per day. This clearly shows that even if investment in renewable energy sources increases, the demand for oil will continue. Even in a country like Norway, which generates more than 90% of its electricity from renewables and has rapidly increased the number of electric vehicles, oil demand remains stable.

The International Energy Agency (IEA) estimates that if the rate of increase in renewable energy investment continues and capacity additions are roughly tripled, oil demand will peak in 2028 and begin to decline from that point. It should be noted, however, that the institution’s forecasts are often criticized and do not always reflect the truth. For example, the U.S., the world’s largest oil producer, continues to increase its oil production despite President Biden’s promises to reduce hydrocarbon production and increase climate targets, and this increase is expected to continue until 2050.

In addition to oil, demand for natural gas and coal is expected to continue rising for some time. China, the world’s largest energy consumer, is also increasing its investment in coal and gas, alongside its record investment in renewable energy. Coal-fired power plants under construction in the country are six times larger in capacity than coal-fired power projects in the rest of the world, and coal is projected to account for more than 55% of China’s electricity generation by 2025.

Natural gas, on the other hand, is emerging as the most important fuel in the transition to low-carbon energy systems. This is the result primarily of the fact that the seasonal effect of renewables has not yet been eliminated. Electricity storage technologies appear to be changing the unsustainable nature of renewable energy generation by making it more sustainable. Chinese investment in battery technologies, for example, has not backed up renewable power plants.

As a result, many of the largest hydrocarbon companies, such as Shell and Total, have decided to continue their investments in natural gas. Some of these companies, which withdrew from Iran and Russia after the sanctions, have already shifted some of their operations to the U.S. The expectation that LNG demand will continue to grow is supported by investments in regasification terminals and Floating Storage Regasification Units by European countries, such as Germany, and emerging Asian countries.

More hydrocarbon investment still welcome

Ironically, the EU countries that decided to move away from long-term contracts are now pursuing long-term agreements with the leading LNG exporters, such as the U.S. and Qatar, to secure their LNG needs. However, most liquefied natural gas exporters have already exceeded their contractual limits thanks to Asian buyers. Europe took advantage of milder-than-expected weather conditions in the 2022-2023 winter season when the Kremlin cut off the flow of gas, but this will not always be the case and reliable suppliers are needed.

Given that oil prices are being deliberately pushed up these days by OPEC+ limiting supply, rising gas prices also affect the amount of electricity generated from gas or the manufacturing capacity of many industries. Companies in gas-intensive sectors such as iron, steel, chemicals, or fertilizers have been forced to reduce their production capacity or shut down as a result of rising prices. Weak supply has already forced the European majors to de-industrialize.

In an environment where it is still not possible to switch to 100% renewables, even in the electricity sector alone, weak investment in fossil fuels will trigger a new global supply crisis. Continued investment in oil and gas will be needed for some time to avoid a new energy crisis.

T

he young electorate and first-time voters seem to be shying away from voting centrist, socialist, or even green. The year 2023 could be a year of change as voting for a far-right party appears to be the new “cool” in Europe.

Profiling the young European electorate

Young people in Europe used to be very selective when it came to choosing which party to vote for. In 2019, young Europeans prioritized human rights and democracy, climate change, green energy, and sustainable development. These preferences led to the formation of coalitions between centrist and green blocs.

Accordingly, Germany, Austria, Spain, and Italy gained their big-tent governments thanks to young voters. These governments’ policies such as lax border controls, generous public spending on social inclusion, and social security were legitimized, reflecting the characteristics of the young European electorate.

However, recent polls in Germany and Austria have shown the far-right Alternative for Germany (AfD) and the Freedom Party of Austria (FPÖ) in leading positions. Young Austrian and German voters seem to favor such far-right options. At the same time, 23% of young Italians helped the far-right Brotherhood of Italy secure the government in 2022. Nordic voters also had their moment of truth: 22% of young Swedes went to the polls to vote for a right-wing populist party.

Economic concerns leading young voters to the far right

The energy crisis in Europe was the first event to prompt a change in electoral preferences. As a consequence of European sanctions against Russia, gas prices rose drastically. By the last quarter of 2022, gas prices in Western Europe had risen by between 450% and 750%. European households started to struggle to cover the cost of the most crucial utilities. In 2022, the quarterly gas bill of an average Italian household cost up to 52,000 euros.

The economy has been the main drive for the shift to the far right. According to the European Policy Center, transformation processes related to economy, migration, and energy are setting the ground for the decline of mainstream parties. Right-wing populist leaders incorporate price changes in their political discourse. Matteo Salvini, Deputy Prime Minister of Italy, asked his voters at a rally why young Europeans should pay the price of a pointless sanction against Russia when Russian oligarchs are not suffering.

But, it is unwise to think that economic hardship has led the youth directly to the far right. Right-wing parties often have cliques and factions within themselves. Even the most far-right AfD has a moderate faction, the Alternative Mitte (“Alternative Midpoint” in German), which prioritizes economic inequality over cultural issues. This moderate faction became the main attraction for young German voters, especially in the eastern provinces.

Young people in the east voiced their concerns over the lack of social infrastructure as they struggle to find work and are forced to move west. Recent polls confirm this view with 47% of AfD voters supporting their party only to protest against the ruling coalition on economic issues.

Greek youth feel forced to vote for right-wing popularism

Young voters seem to have a vivid memory of past events. In voting for the 2023 parliamentary elections, young Greeks remembered the catastrophic debt crisis: they harshly punished the centrist Panhellenic Socialist Movement (PASOK) and the socialist Coalition of the Radical Left (SYRIZA) for the crisis, while 33% of young Greeks rewarded the New Democracy party for its successful maneuvers in rescuing the country from the crisis. New Democracy’s promises of tax cuts also swayed young voters.

Did this very same electorate ignore New Democracy’s mistreatment of migrants? Just two weeks before the election, hundreds of migrants died in the Ionian Sea. Despite such tragedies, young voters broke a record by making New Democracy the strongest right-wing populist party in Europe with a solid 40% of national votes. Even those who belong to anarchist youth subgroups decided to vote for the party for financial stability.

The future of young far-right voters in Europe

Bill Clinton’s famous phrase, “It’s the economy, stupid,” managed to find its way into European politics. The economy has indeed played a role in shaping the preferences of Europe’s youth.  This can also be interpreted as good news: young voters are not ideologically attached to right-wing populism.

But poverty and war have put Europe’s youth between Scylla and Charybdis, making them have to choose between two evils: poverty and populism. The result has been that populism has been perceived as the lesser evil.

A

t a time when norms are increasingly pushed aside in the international arena, one great quagmire stands to impact us all: climate change. Humanity seems to be gambling its present and future, while corporations aim to delay transition for profits. It is not just an issue that effects those of us alive today, but also the distant strangers of the next generation.

Who bears the responsibility? How can we deal with climate change fairly? Should one resent the “burden” or embrace the “challenge”?  In The Pivotal Generation: Why We Have a Moral Responsibility to Slow Climate Change Right Now, political philosopher Prof. Henry Shue helps the reader dissolve the separateness between the past, present, and future, and oversee their responsibility towards climate change. Shue encourages the reader to face the historic challenge of our generation, like past generations have with the complex challenges they faced.

Q. Why are we “the pivotal generation”? Why is it a privilege to be us?

We’re the pivotal generation because we just happen to live at the time when either we do enough to prevent climate change from getting out of hand or we don’t – and this is going to be decided in the next 10 or 20 years.

We know from the science that greenhouse gas emissions, especially carbon dioxide emissions, have to reach net zero by 2050 if climate change is not to be even more severe than it’s already going to be.

It’s just common sense that if we have to go all that way by 2050, then we need to get halfway by about 2030 since reducing emissions by the second half is going to be much harder than the first half.

We have a chance to make an enormous difference and really deeply influence the course of human history. That’s the privilege – and almost an honor: to be an absolutely crucial generation. In some ways, those of us alive now are the most important people in human history, because we’re going to determine whether climate change stays relatively moderate or it becomes even more severe.

One can also think of this as a burden as we have to carry on a lot of tasks. But I find it sort of exhilarating to think that we’re in the position to accomplish as much as we can accomplish, if we get serious about the problem of climate change.

We have a chance to make an enormous difference and really deeply influence the course of human history. That’s the privilege – and almost an honor: to be an absolutely crucial generation.

Q. What makes climate change stand out as the main challenge of our generation?

It’s because so much of a difference will be made in the short time. It’s not that there are no other very important problems, we need to prevent nuclear war, xenophobia etc. But as far as we know, we don’t have to deal with those problems in the next 10 or 20 years, but in the case of climate we really do have to bring about a revolution in our energy system in the next 10 or 20 years.

Since World War II, there has never been a year when carbon dioxide emissions weren’t more than they were in the previous year, except for the first year of the COVID-19 pandemic in 2020. Every year, except for 2020, emissions are going up. That’s a deep, built-in trend, and it has to be reversed very quickly. We need to turn things around, use much less fossil fuel, and do it right away.

There are other problems that are also very important, though dealing with climate change will help with a number of other problems. For example, it will help with health. A lot of people have lung and heart disease because of the particulate matter that burning coal puts into the air.

If we burn less fossil fuel, we won’t only deal with the climate; we will greatly improve health and also save a lot of money. One of the really hopeful things already is that it’s cheaper to build a new solar energy farm and then use it than it is to keep using a coal-burning plant that’s already there. The prices of some alternatives, particularly solar, have already gone below the price of fossil fuels.

Q. Nowadays, with limited time and energy, we are made aware of an incomprehensible number of topics and are often left feeling overwhelmed. Your book highlights responsibility. How can we take responsibility for climate change in our lives?

I do, as you say, talk about responsibility. That’s partly because this is what I work on as a political philosopher, but it’s also very much in our interest to deal with climate change.

However, the thing I wanted to emphasize especially is our responsibility toward future generations. I think we picture future generations as strangers, people who we’ve never met or who we don’t know and don’t have anything much to do with us in our daily life.

In fact, in our daily life, we are shaping the world that future generations are going to live in, and so they’re not distant at all. We are shaping their world, and we have a very tight, intimate connection with them. And so, I think we do have responsibility for the problems that we leave them with. They may be able to solve some of the problems, but we’ll see to it that they have less of them.

For example, there’s going to be sea level rise, and this is going to cause problems for coastal cities. They can move or try to build sea walls or all sorts of things, so they won’t be entirely helpless, but it is true that they will inherit problems like sea level rise from us. The less we do about climate change, the more problems that they are going to inherit.

Q. What are the developed nations’ historical responsibilities?

They’re huge. It’s countries like the one I was born in, the United States, and the one I live in, the United Kingdom, which are mainly responsible. I believe the way to think about responsibility is to look at total cumulative emissions over history and the country with the greatest total cumulative emissions is the United States.

China currently has the most emissions per year, but their cumulative emissions are still quite a bit less than the U.S. I think a reasonable way to look at this is to the extent that you’ve emitted the gases that cause climate change, you are to that extent responsible for the problem. Therefore, this means most of the responsibility goes to the most industrialized countries.

There are complications to this. Saudi Arabia, for example, sells enormous amounts of fossil fuel, and they haven’t generated a lot of greenhouse gas emissions because they’re not a heavily industrialized country. But for the most part it’s the industrialized countries in North America and Western Europe, and Japan which have done the most to cause the problem. I think, the common sense principle is, if you’ve made the mess, then you should clean it up.

And one thing this means is that to get to zero emissions all countries have to stop using fossil fuel, but poorer countries can’t just find a lot of money all of a sudden, and install renewable energy everywhere. However, it’ll be bad for the climate if they follow the same route to development that countries like mine did. So, one of the ways in which a country like the U.S. or the UK can exercise its responsibility is to finance, to some extent, and, at least, invest in sustainable development in poorer countries. In this case, this means leapfrogging over the fossil fuel and going straight to non-fossil fuels like solar, wind, even nuclear. There are problems about nuclear, as everybody knows, but it doesn’t generate greenhouse gas.

Q. In your book, you talk about the fossil fuel interest having entrenched allies within the U.S. government and banking sector. Can we break up that cycle?

We’ll see. That’s the crucial battle, because even the richest countries which talked the most about doing something about climate change are all still subsidizing fossil fuels. In the U.S., there is accelerated depreciation for companies that drill new oil wells. That’s absolutely absurd! We don’t need new oil wells, and we certainly don’t need to give tax breaks to companies that drill new oil wells. This shows that a big section of our politicians is basically captured by fossil fuel interests.

I think the only hope is essentially democracy and social change brought about by people. Many fossil fuel companies say they are committed to the Paris Agreement and to net zero by 2050, but they are not doing anything to get there.

If they wanted to, they could develop plans that would change them from being oil companies to being energy companies, which is what they say they’re doing but it’s not what they’re actually doing. Since they’re not voluntarily making the transition, the only way to get them to do it is to have a political action.

There are a lot of different possible kinds of political action, like carbon taxes or border taxes. There are also many complicated questions about what exactly to do. I think we need our governments to take forceful actions that will require the transition away from fossil fuel, and that will, for a start, put a stop to additional extraction.

New oil wells are drilled using loans from the major banks, and, once again, the worst banks in the world are all American: JP Morgan Chase, Wells Fargo, Citibank, Bank of America. It’s hard to put pressure on banks, but we can try, and you can.

This spring, for example, there’s going to be a day when people cut up their credit cards if they have a credit card from these banks. By the way, there’s a report that anybody can access on the web called “Banking on climate chaos.” It’s revised every year, and it shows exactly which banks are making how many loans for the extraction of fossil fuel. And so, you can find out who the main offenders are and not give them your business.

Q. How can activists and decision-makers approach the sociopolitical implications of climate change, such as climate refugees who are projected to reach one billion by 2050?

The best thing to do is to prevent flows getting worse than they are. As I mentioned before, this means enabling countries which have a lot of poverty and quite rightly want to eradicate the poverty to do it by a path that doesn’t mean more use of fossil fuel, and, therefore, more emissions.

The countries that are wealthier should invest and assist with this. For example, India has a huge amount of coal, and it happens to be particularly dirty coal. We really need India not to burn that coal. The way to do it is to invest in their solar power. The more quickly we can bring down the amount of fossil fuel that’s burned and the amount of emissions that are released, the less the sea level will rise, and for example, the fewer people will have to flee from coastal cities.

The important thing to do is try to take actions that prevent people having to flee. People don’t want to leave their own country. It’s not only in the interest of the potential receiving countries, but if we don’t act fast, movements of refugees are going to be really very serious.

Q. In the broader global context, we see an era of international relations drifting away from norms. However, actors cooperate in certain areas while having relatively hostile relations. As far as interests are involved, it’s a kind of double standard. Should we expect states to act morally?

States do tend to pursue their own national interest, but one thing about climate change is that it is in everyone’s interest to deal with it. I think the best that any given nation can do is to carry out its own responsibilities and hope that others will respond.

Now, for exactly the reasons you gave, people worry that others will be so-called free riders. The U.S., in particular, has worried endlessly about whether if it spends a lot of money on climate change, it’ll end up having to carry the burden for everybody. If everyone holds back waiting for other people to do things, nothing will happen, and that’s where we are right now.

People have been holding back and worrying about whether they’re going to get stuck with the bill. I think the only hope is to stop worrying about whether other people are going to take advantage of you and start showing some leadership to what needs to be done and hope that others will respond by doing something similar.

They may not, and if they don’t, then one can take tougher action. For example, the EU now is going to introduce border tariffs on products that are made in ways that generate more emissions than the products would have generated if they had been made inside the EU. This is a way of putting pressure on other countries to reduce their emissions.

The hope is that rather than paying the border taxes, other countries will crack down on their own emissions. That’s a way of pressuring others: it’s not violent, but it’s pressure, and it’s not just waiting for other people to do the right thing. It is, however, tricky. We don’t want to start wars, and even trade wars if we can help it. At the same time, this is very important and we need to take measures that will be effective. Actually, the EU has been showing some leadership, and, on the whole, has been the most effective set of countries on climate change. So, there are some countries trying to do the right thing.

Q. Do you think that climate technology investments could be used as a foreign policy tool in global competition. Are we seeing such developments?

I think the best thing any country can do for its own national interest is to be leading the world in non-fossil fuel technology. A country like the U.S. or countries in the EU need to develop alternative technology in order to deal with climate change since these are going to be the technologies that the world is going to be using for the next century, or many centuries. It is also in their interest to be the ones who develop it.

If other nations are smart, they’ll be developing the technology too. The last thing you want to do is end up being a country that’s still burning coal and oil when everybody else has the alternatives. This is actually a very clear case where doing the right thing is also very much in your long-term self-interest, and can enhance your competitive position economically.

I think the best thing any country can do for its own national interest is to be leading the world in non-fossil fuel technology.

We are on the brink of irreversibility in some cases when it comes to climate change, which can squelch all hope. Do you have any optimistic concluding words for our readers?

The truth is, we’re in a real battle. We could win or we could lose, but there are some good things happening. The youth movement, the Greta Thunbergs of the world, is the most hopeful thing. Just in the last few years, young people across the world have gotten really angry at the old goats like me, who’ve been here for decades and have not dealt with the problem. And they’re getting really fired up – that’s good!

Another very good thing that I mentioned already is that the prices of alternative energy are way down, and so it’s much cheaper to install and use solar than it is to just keep using coal, for example. But as you mentioned, we know that there are so-called tipping points, cases where something in the climate passes a point of no return, and you can’t go back.

Particularly with ice sheets, which means with sea level rise, it is possible that we’ve passed at least one tipping point for West Antarctica, and we know that Greenland and East Antarctica are not too far away, especially Greenland.

This is another reason why the next decade or so is really crucial. We’ve got to turn around the emissions and the speed of the rise before we pass any more tipping points. But people are finally getting fired up and so I have some hope. We’re not doomed – there are things we can do and things we’re beginning to do. We have to keep doing them and do more of them.

E

nergy has long been used as a foreign policy tool in states’ engagements with one another. First coal, then oil and natural gas, have been used to create tension or collaborations between governments. These resources enabled few countries to become energy producers and exporters on rare occasions, while all remaining countries were forced to be import dependent, and to indigenously use renewable energy resources joined by dominantly used fossil fuels.

Although green energy technologies are not new to our lives, rising concerns over accelerating climate change have pushed clean technology further in recent years. What is more, the Ukraine war has reminded us of the significance of indigenous energy resources and mines.

Clean energy: Tool developed for decreasing import dependency?

The clean technology movement was first driven by developed countries to decrease their energy import dependency and secure their energy supply. The oil crisis of the 1970s showed that governments and outside actors can intervene in the markets, and the United States and its Western allies began to search for alternative energy supplies other than those imported.

Thus, especially after 1990, the share of renewables in global electricity generation began to rise. More specifically, renewables share was 2,200 TWh in 1990 and increased to almost 7,000 TWh in 2020. Germany, for instance, is among the first countries that invested in renewable energy technologies, and among the first to manufacture solar panels and wind turbines.

German companies are still listed among the major players in clean energy technologies, and invest worldwide to preserve their market share and competitiveness. Yet, some domestic manufacturers went bankrupt because of the federal government’s overly ambitious goals and liberal market solutions.

As the German government pushed hard to increase solar power installations by implementing “Energiewende,” its green energy transition policy to phase out nuclear power, and coal power, by incentivizing foreign companies to take an active part in the domestic energy market, German solar panel manufacturers were not able to compete with foreign companies, mainly Chinese solar technology producers.

This almost spelled the end of several German panel producers at the expense of renewable energy power capacity. Today, cheaply produced Chinese solar panels feature across the European continent.

European countries, including Germany, changed the destiny of their legendary car industries, too. Thus, governments planned to ban the selling of combustion-engine cars, for instance, Norway starting in 2025 and, the Netherlands and Germany in 2030, to lower emissions arising from European roads. However, there was not an overwhelming demand for electric vehicles, and imports of electric vehicles began to rise.

Since their Asian counterparts, especially Chinese and Indians, produce at lower costs, and manufacturers like BMW, Mercedes-Benz, and Audi seem unable to respond to this price challenge, the Chinese market share especially is expected to rise from less than 5 percent to more than 15 percent by 2025.

Tough competition from emerging economies

In the 2010s, developing countries, or emerging economies as they are also known, have taken over the leadership of clean energy technologies. Although Germany, Spain, Australia, and Japan were the main donors in public investments in renewable energy in 2000, Brazil and China invested the most in 2009, and China alone was responsible for almost one-third of the global renewable energy investment in 2017.

Between 2000 and 2022, China was behind 21 percent of public investments in renewables globally. This is a very good example of how a country can market its projects as a foreign policy tool promising sustainable growth and development. The Belt and Road Initiative (BRI), for instance, is one of the biggest and most controversial projects of the last century.

China has marketed the BRI as a vision to bring progress and enhancement to those engaged in the initiative. Since its launch in 2013, a number of Chinese state-owned firms and private companies have been operating in Africa, Latin America, and elsewhere, with energy-related projects constituting the largest share. Although Chinese firms are more prone to engage in fossil fuel projects, renewable energy also has a considerable share.

Only in 2022, Chinese firms’ engagement in BRI energy projects reached $24.1 billion, which was the lowest since 2013, when green energy constituted about 11 percent.

Metals and mining projects are also of strategic importance for the BRI as they were at the heart of transition to green energy and achieving net-zero emissions. The key role played by raw materials in solar and wind power generation, battery production, electric vehicles, and in fact the whole renewable technologies sector escalated competition between countries, and China, in the last decade, again became the number one investor.

A just energy transition for all?

Yet, there are cases where  the “developed West” wants the developing or underdeveloped world to keep its natural resources underground while it continues to use its resources. At annually held COP conferences, policymakers from advanced economies complain about how they still finance polluting fossil fuels. Norway, for instance, as the world’s fourth largest natural gas exporter, lobbied at COP26 to stop financing fossil fuel development projects by 2025 unless exceptional circumstances are present.

The world’s leading oil and gas producer, the United States, and one of the top fossil fuel consumers, the EU, are also urging underdeveloped and developing countries to stop burning coal and share the burden of climate change adaptation and mitigation while suggesting the World Bank finance clean tech applications, such as hydrogen production.

Anyone familiar with the energy sector knows that today, no single economy can survive without some baseload power generation like gas or coal-fired thermal plants, or nuclear power plants. Besides, natural gas is also one of the cleanest means to heat homes, cook meals, and run heavy industries. Thus, burning coal and gas is indispensable to economic growth as energy consumption is one of the indicators of economic development.

Import or do not grow

Halting finance flows to oil and gas production projects in the developing or underdeveloped world is a soft way of saying “import or do not grow.” This could push countries to collaborate with China which has already jumped into their economies.

Moreover, recent data show that despite the promises and the immense need for climate change adaptation and mitigation measures, international public finance still flows to initiatives that harm the climate. It is also led by advanced economies of developing countries in support of clean energy, which is decreasing since 2019.

The level of financing remains well below what is needed in the most vulnerable and least developed countries like Sub-Saharan Africa, Latin America, and the Caribbean. Plus, it is worth remembering that those who push hard to stop burning coal, cut fossil fuel subsidies, and invest more in net-zero scenarios are the ones who have caused the most pollution and whose shares in historical greenhouse gas emissions are the largest.

The situation today forces the developing and underdeveloped world to choose between being part of green colonialism or not developing. What will they choose?

The Russian military aggression against Ukraine launched almost two months ago has clearly signaled a change in the traditional world order and triggered the unprecedented reaction of the Western coalition led by the U.S. The ongoing conflict between Russia and Ukraine has left the global energy market uncertain, threatening to cause severe energy shortages and oil prices exceeding $110 per barrel.

Since the Russian intervention in Ukraine kicked off, numerous sanction packages have been imposed on Russia, hitting mostly financial institutes and state-owned companies. This resulted in Western countries’ consolidation, and the collective refusal of Russia-related transactions and import of Russian natural gas, oil, and coal.

Whereas the U.S. and UK-led Western coalition gathered to support Ukraine politically, economically, and military/technically, some EU countries are at loggerheads over demands for an immediate blockade on Russian oil imports, joining the international financial sanctions, and condemning Moscow’s actions locally.

For example, Hungary and Germany seemed hesitant to ban Russian oil and gas imports, citing that “measures targeting Russia’s lucrative oil and gas exports were a red line.” However, under  harsh criticism and pressure by the U.S., Germany suspended Russia’s Nord Stream 2 project and has released $3.2 billion to acquire floating liquefied natural gas import terminals in order to move away from dependence on Russian gas. Unlike their Western partners, the Baltic states and Poland took a more rigid stance, joined the anti-Russian front, and declared that they fully stopped importing Russian gas and coal.

In addition to Europe, the Gulf countries and the post-Soviet region, and China and India are determined to keep their criticism at a low level and simultaneously not to cross red lines in their relations with Russia. During the UN Security Council vote condemning the Russian invasion of Ukraine, one of the United States’ most important partners in the Gulf, the United Arab Emirates (UAE), ignored Washington’s pleas and abstained from condemning the invasion. Meanwhile, Saudi Arabia  shied away from backing the Biden administration and severing relations with Russia.

Obviously, the U.S. seeks to isolate Russia more by pushing the EU and other states to ban all Russian imports and rely on alternative energy suppliers, that is the Gulf monarchies. However, they were shocked when OPEC+ countries, including the UAE, Saudi Arabia, and Qatar, after a 13-minute-long meeting, refused to increase their production and decided to stick to a deal previously agreed upon between member states. This is mainly because the Gulf states do not want to jeopardize relations with Russia over Ukraine, as they see Moscow as an essential linchpin for the oil-producing coalition.

As the second-biggest oil exporters after Russia, Kazakh oil producers are using the Caspian Pipeline Consortium (CPC) pipeline to send their barrels to the Black Sea, and Russia’s Transneft for exports via the Baltic Sea and the Black Sea. They are now seeking to reroute their flows away from the traditional private pipeline running to the Black Sea due to Russia’s economic isolation and the initial sharp fall of the Russian ruble.

On the other side of the post-Soviet region, the South Caucasus states also abstain from vocal criticism of the war in Ukraine and have joined energy sanctions against Russia. While Georgia and Armenia made it clear that they do not have plans to join energy and economic sanctions, energy-rich Azerbaijan held several talks with the EU as an alternative energy supplier for a possible increase in exports to Europe soon.

As a regional state with options for political maneuvering and economic tools, Russia signed a new document on allied cooperation with Azerbaijan days before the intervention in Ukraine, thus seeking to neutralize it beforehand. Nevertheless, the document did not prevent Azerbaijan from dispatching three humanitarian aid convoys worth around 12 million euros and instructing the national oil company (SOCAR) to provide free fuel to Ukrainian fire engines and ambulances.

It is evident that the current anti-Russia sanctions will hit Russia’s already stagnating economy hard and will result in a gradual decrease in the energy monopoly in Europe. On a political level, more countries will likely join the anti-Russia group by banning Russian goods and fossil fuels, steadily shifting to green energy and renewable sources. In light of the Ukraine invasion, EU member states are already seeking to accelerate the transition to renewables to meet their electricity and energy needs fully.

The press statement of NATO Secretary-General Jens Stoltenberg after the NATO Summit on March 24 points out a strategy shift for the alliance after the Russian aggression against Ukraine. His speech was about: (1) NATO’s actions to respond to Russia’s further escalation challenging the borders of the alliance; (2) warning specific countries like China or Belarus not to support the aggression; and (3) outlining how NATO is providing support to Ukraine.

Apart from all these, Stoltenberg emphasized the need to strengthen NATO’s resilience to the “new normal” and to be prepared for further political-military escalations. Nevertheless, he did not specify what this “new normal” is.

The narrative of a “new normal” needs a threat projection and a portrayal of the security environment, and requires capacity and capabilities, and a clear strategy to comply with the described environment.

The global threat description in the last three decades is a matter of debate. The post-Cold War era is associated with the dissolution of multi-ethnic states, the need for a crisis management following the Soviet Union’s collapse, a power vacuum, and ambiguity emerging out of the unclear political visions of opposing actors.

The second decade after the Cold War

The second decade following the end of the Cold War was sealed by 9/11 when the United States’ “war on terror” and NATO’s activation of Article 5 for the first time in its history brought the alliance into Afghanistan. The missions of NATO units expanded to address non-state actors with regular military capabilities, specifically transforming NATO’s modus operandi to counter soft threats.

The third decade in the aftermath of the Cold War coincided with the Arab Spring. NATO was hesitant to get involved in the uprisings in the Middle East and North Africa after the Iraq and Afghanistan experiences, and failed to reach a consensus among its member states on Syria or Libya. The most outstanding feature of the last three decades was dealing with intangible threats, emphasizing emerging threat perceptions such as countering terror networks or cyber challenges, and leaving the care for conventional warfare behind.

The recent Russian aggression against Ukraine scrolled back the threat perceptions to the former conventional, symmetric, and regular threats. However, the “new” conflict environment and threat perception is, at least, four decades old! In this new reality, strategic weaponry and weapons of mass destruction (WMDs) may complement all these threat varieties with hyper combat momentum.

NATO’s organic assets

The necessary capacity and capabilities to respond to the threats in a fragile security environment are more complicated for NATO. The alliance needs to have organic assets, proceedings, and more civilian capabilities mixed with military ones. NATO member states have their own abilities, but at the time of a crisis in the vicinity, member states become reluctant to share their arsenal due to national priorities. Hence, the alliance should review the “interoperability” pillar based on the expanding nature of future conflicts.

The alliance has the arsenal, formed by the contributions of member states—mainly the U.S. Yet, deployment and reinforcement to counter “new normals” will not be smooth without expeditionary capabilities. Such vulnerability requires enrichment and repositioning of the allied capabilities across the flanks per the prerequisites of geopolitics. In other words, NATO should prepare more than its member states to counter the threats both proactively and reactively with a fast pace.

Finally, NATO needs a clear strategy to project the new normalcy that will comply with the described threat types and security environments. NATO staff has drafted a new strategic concept to be approved by the summit to be held in Madrid in June 2022. The Russian aggression in Ukraine and the transformation of security threats will undoubtedly push the alliance to review the already drafted Security Strategy, which is the product of years-long efforts to meet the approval of all member states. The NATO strategy should be outlined in a document showing a will and vision to respond to global conflicts, not just regional ones.

More comprehensive NATO strategy

What is more, this NATO strategy should include more compartmentalized civilian experts’ skills since the military has been insufficient in countering irregular threats. This new security strategy which comes after the pandemic and the Russian challenge to international security should be flexible, more integrated, and organic to NATO.

In addition, the collateral effects of regional and global conflicts appear more destructive than the conflict itself. For instance, the economic impact of the pandemic and Russian revisionism cannot be isolated from security threats of all sorts; yet, it needs to be integrated into NATO’s comprehensive response mechanism.

Another example of the collateral impact of conflicts on NATO is the obligation of member states to approach their widened and deepened security policies at the same time as the military-based collective defense system. Agricultural sustainability or energy interconnectedness cannot be isolated from a collective response to the threats facing NATO. Military victory requires resilience, hard power capabilities, and all sorts of national strength factors to augment the endurability of the allied states.

Ever since the Greek Cypriot Administration (GCA) signed an agreement with Egypt in 2003 on the delimitation of an exclusive economic zone (EEZ) in the Eastern Mediterranean and declared concession areas for the purpose of oil and gas exploration in 2007, a high tension has grown over the possible maritime boundaries and related activities.

The tension has primarily been between Turkey, Greece, and the GCA, and escalated with further delimitation agreements such as those between Lebanon and the GCA (2007), Israel and the GCA (2010), Turkey and the Turkish Republic of Northern Cyprus (TRNC) (2011), Turkey and Libya (2019), and Greece and Egypt (2020).

Some of the actual tension has always been associated with the resource-related activities considering that there are not fully agreed maritime boundaries by all sides in the Eastern Mediterranean. The regional states have therefore confronted each other not only over the possible maritime boundaries but also other related activities.

The Eastern Mediterranean Pipeline Project, known as the EastMed Project, has been one of these activities ever since it was initiated. First pronounced in 2016 by Greece with the EU’s encouragement and funds to finance the preliminary works (the EU pledged 36.5 million euros for research and technical planning), the project gained an official status with an intergovernmental agreement signed between Greece, Israel, and Cyprus (GCA) on January 2, 2020 in Athens, Greece.

The pipeline was planned to run for about 1,900 km, starting from a midpoint between Israel and the island of Cyprus in the sea,  in the Israeli section of the Levantine Basin, and eventually reaching Italy via the island of Crete and Greece with the Poseidon and IGB pipelines, a gas interconnector pipeline which connects gas supplies coming from both Bulgaria and Greece.

It was said that it would carry at least 11 billion cubic meters of gas per year and cost around 6 billion euros to construct. It is being developed by IGI Poseidon S.A., a 50/50 joint venture between the Greek gas company Public Gas Corporation of Greece (DEPA) and the Italian gas company Edison. The project is aimed to be completed by 2025.

The IGB pipeline project was regarded by the related or supporting states as not only a means of transporting the extracted gas from the Eastern Mediterranean to Europe but also a means of achieving strategic goals.

These strategic goals belong to Greece for a couple of reasons. Firstly, the IGB Pipeline Project is a means of establishing a partnership with regional states such as Israel and Egypt as well as non-regional states such as the United States and EU countries over the resources of the Eastern Mediterranean. The Greek Prime Minister Kyriakos Mitsotakis made a statement upon signing the agreement saying, “Today we did not simply sign a beneficial agreement. We sealed our resolve for a strategic connection between our countries in a region that now more than ever needs growth and security.”

Despite Turkey’s objections, Greek efforts seem well approved as the project has been supported by regional states such as Israel, Egypt, Jordon, and the Palestinian Authority, and by some non-regional states such as the U.S. and France.

Egypt had already worked for the creation of the East Mediterranean Gas Forum on July 25, 2019 with the participation of seven countries, namely Egypt, Jordan, the GCA, Greece, Italy, Israel, and the Palestinian Authority, and further signed an agreement with the GCA on September 19, 2018 to construct a line linking Egypt and Cyprus’s Aphrodite gas field to Egypt’s gas liquefaction stations.

The Israeli reason for joining the forum seems to be commercial. On the signing of the agreement, former Israeli prime minister Benjamin Netanyahu said, “This is a historic day for Israel… Just days ago, we started pumping [the] Leviathan [gas field]… We have huge quantities there. This means a lot of money will come into the economy. That is good for peace because we have agreements with our Arab neighbors.”

For the EU, the reason for joining the East Mediterranean Gas Forum was also commercial alongside the aim not to depend heavily on Russian gas. Competition to provide gas to Europe is fierce, as the continent seeks to rid itself of coal and high greenhouse gas emissions. Despite the various pipelines coming to Europe such as the Trans Adriatic Pipeline (TAP) or the shipments of liquefied natural gas (LNG) from the U.S., there is still a gap in the market.

The U.S. had been supportive of the East Mediterranean Gas Forum from the very beginning. Frank Fannon, then assistant secretary for the Bureau of Energy Resources (ENR), was present at a meeting in Athens in August 2019 when the project was agreed upon. The primary reason for the U.S. supporting the forum seems to have been to diminish the European countries’ dependency on Russian gas. It is also alleged that the U.S. has used the EastMed project to counter Turkey for some “unproved acts” such as its relations with Russia.

The U.S. withdrawal of support from the EastMed project

Despite the above-mentioned compelling reasons for supporting the project, recently, the U.S. has officially withdrawn its support from the project. In a statement by the U.S. Embassy and Consulate in Greece, it announced, “The United States continues to strongly support regional efforts that enhance and promote cooperation and regional stability, including the 3+1 mechanism in which the Republic of Cyprus (ROC), Greece, Israel, + the United States participate… We are shifting our focus to electricity interconnectors that can support both gas and renewable energy sources. We support projects such as the planned EuroAfrica interconnector from Egypt to Crete and the Greek mainland, and the proposed EuroAsia interconnector to link the Israeli, Cypriot and European electricity grids.”

The U.S. State Department sources have been cited as saying that the EastMed pipeline project should be abandoned altogether. The inevitable question is why the U.S. decided to shift its focus away from the EastMed Project. To answer this, it is possible to identify a number of reasons.

The EU aims to reduce the use of natural gas in Europe by 25% by 2030 and for it to be abandoned completely by 2050.

One of the most frequently stated reasons is the fast-growing focus on green energy. Due to the universal trend towards green energy to meet the Paris Agreement on Climate Change targets (COP21), the future of fossil resources seems blurred beyond 2030. The abovementioned statement by the U.S. notes that “at a time when Europe’s energy security is–more than ever–a question of national security, we are committed to deepen our regional relationships and promote clean energy technologies. We are shifting our focus to electricity interconnectors that can support both gas and renewable energy sources.” The Biden administration is looking “critically at new fossil fuel infrastructure projects to ensure U.S. support is not directed to carbon-intensive sources and does not result in future stranded assets as we accelerate the clean energy transition.”

Similarly, the EU aims to reduce the use of natural gas in Europe by 25% by 2030 and for it to be abandoned completely by 2050. It is noted that even Israel announced that it will stop searching for natural gas and will focus on greater use of renewable energy sources (RES). In fact, Greece is doing the same, setting the production of 61% of its electricity from RES as a goal.