The only true path to energy security is getting off fossil fuels altogether –– and that means moving money.
Putin’s fossil-fueled war in Ukraine is driving a cascade of global crises as it exacerbates everything from energy insecurity, to inflation to global hunger.
The fossil fuel industry has cynically leveraged this moment and is busy trying to convince the world we need more, not less, fossil fuels to address the fallout. Instead, what we need is a clear and powerful clean energy signal to cut through that noise and rally the world behind the only true path to providing energy security –– getting off fossil fuels altogether. To do that we need a bold clean energy investment plan that puts us on wartime footing to deliver peace and freedom not just for Europeans, but to address the fallout for citizens the world over.
The Overton Window is smashed, gas is the big loser
Simply put, the Overton Window, the accepted consensus amongst the mainstream on what is politically possible, has been smashed creating an opening for what was once politically unthinkable to become politically unstoppable. Seemingly overnight Europe transitioned from blessing gas as a sustainable investment, necessary to bridge to a clean energy future, to rapid plans to get off nearly all Russian gas –– their largest supplier –– as soon as next year.
It’s hard to underscore how abrupt a shift that is not just for Europe, but for the world. While history was made in Glasgow when the global community agreed to phase down coal the consensus has been the exact opposite for gas. Gas is the only fossil fuel projected to continue growing beyond 2030. The enduring notion that gas is a bridge to a clean energy future has propelled this growth and provided it the most durable and lasting social license of all the fossil fuels … until now.
But here in the U.S., the fossil fuel industry is busy telling the world the exact opposite message. Financial leaders like Jamie Dimon are instead calling for a Marshall Plan to spur a gas surge to Europe with the backing and potential financing of the Biden administration. Indeed, the fossil fuel industry is reveling in their change of fortune having been rightfully ostracized from the Glasgow climate talks a few short months ago they’re now being called on to help aid the war effort. If they have their way, the world will head down a path of stranded assets, greater insecurity and climate chaos. A path the world simply can’t afford.
More gas isn’t energy security, it’s insanity
The notion that more, not less, gas is the answer is impressively Orwellian. But even if we take it at face value the argument for a surge of Liquid Natural Gas (LNG) to Europe falls painfully flat.
The notion that more, not less, gas is the answer is impressively Orwellian.
As Jesse Jenkins, an energy professor at Princeton describes, there are two forms of energy security, physical and economic. While the U.S. gas industry can provide some physical certainty –– access to new supplies by redirecting existing cargoes –– in a global market it can’t provide economic security. Because as long as a country relies on globally traded gas it is vulnerable to the volatile and rising prices that are now a staple of gas markets the world over.
In a tight, competitive and costly market, any autocrat or supply disruption can send prices soaring. That means increasing your economic reliance on gas is not security, it’s insanity.
More importantly gas can’t deliver on the most important variable that matters in this crisis moment … time. It takes at least three to five years to build new LNG export capacity in the U.S. but Europe needs to diversify its supply no later than the end of next year. That’s why even the U.S. LNG industry is saying it won’t help bridge Europe’s supply gap any time soon. That means the U.S. gas surge, and similar surges elsewhere, aren’t meant to support today’s emergency response. At best they’re planning to lock the U.S. into a new wave of stranded assets Europe won’t want or need, at worst it is a cynical attempt to hook the rest of the world on U.S. gas.
A clean energy for peace and freedom investment plan to rally the world
But unlike the last big supply-side shock that sent the global economy reeling –– the Arab embargo of the ’70s –– this time is different. Not only does the world have clean energy options, but they are also in fact the cheapest, fastest and only way to provide global energy security. Indeed with costs having fallen 90%, they’ve gone from expensive and niche to cheap and ubiquitous. This time around they’re ready for prime time.
But to deploy clean energy on a wartime footing and effectively avoid a surge of gas, we need to create an environment conducive to fundraising and investment. An environment where every clean energy company seeking to curb gas use in Europe and beyond can raise the funds necessary to get on with the job. An environment that would move game-changing deals like the MoU between EON and Fortescue to cut German gas consumption by 33% from promise to reality, fast.
See our related story “Australia’s richest industrialist says fossil fuels are dead.”
We can create that environment by rallying the world behind a clean energy investment plan for peace and freedom with concrete investment amounts, targets and timetables tied to Europe’s Fit for 55 policy push and its additional emergency measures to get off Russian gas. That plan would have a laser focus –– getting Europe off gas –– and would invest in everything from weatherizing homes and deploying what writer and climate expert Bill McKibben calls heat pumps for peace and freedom to accelerate the deployment of solar, wind and green hydrogen. Done right, it’s highly unlikely we’d need new money given these are commercially mature technologies. But we would need public coordination.
Done right this plan is not just about getting Europe off-gas, it’s about global justice.
To do that, the plan would marshal the tens of billions of public dollars sitting in institutions ranging from the European Investment Bank and the European Bank for Reconstruction and Development, to recently created national green banks, development finance institutions like Germany’s KFW, Bretton Woods, institutions like the International Monetary Fund and beyond. That public money would be added to the hundreds of billions, if not trillions, available in private markets to drive clean energy solutions in Europe. The leadership, commitment and participation of these public institutions will be particularly important for poorer Eastern European countries that are more reliant on Russian fossil fuels, and less capable of transitioning without support.
A plan like that only works, however, if private financial institutions show up. With nearly every private financial institution on earth committed to a net zero transition, their participation should be a given. But if it’s not, this becomes a litmus test for credibility with the eyes of the world watching. If they’re really committed to the clean energy transition and ending this war there’s one shared solution –– pledge concrete targets and investments in support of this plan and follow the public money.
Done right this plan is not just about getting Europe off-gas, it’s about global justice. It can help stabilize the growing food and energy crisis in the developing world by ending the direct competition with Europe and other developed countries over scarce gas and fertilizer supplies. With not enough to go around, countries are being forced to take from the hungry to feed the starving. Immediately reducing gas consumption in Europe can help end that impossible choice.
Ultimately, as Laurence Tubiana, the former French diplomat who helped deliver the Paris Climate Agreement, said: Clean energy is the peace and freedom project, it is the answer to this fossil fueled war. But only if we seize this moment to solve our twin crises. And seize it we must because everything hangs in the balance.
