The Energy War: How Europe Triumphed Over Russia
In the spring of 2022, as Russia abruptly shut off its gas pipelines, Europe braced for a winter of discontent. The media was awash with dire predictions of a harsh winter, with soaring energy prices and potential civil unrest. Yet, as the winter unfolded, the anticipated crisis failed to materialize. Life carried on more or less as usual across Europe. This unexpected turn of events raises a crucial question: Why did Russia’s energy weapon fail so spectacularly?
As we look back from the summer of 2023, the panic that gripped the media a year ago seems almost amusing. However, the warnings were not unfounded. On the eve of the war, the EU was heavily reliant on Russian gas, accounting for nearly half of its energy consumption. The dependence on Russian gas was a ticking time bomb, and the fuse was lit when Russia began reducing gas flows to Europe in 2021.
When war broke out, Russia continued to supply gas for a few months, but as sanctions piled up and military setbacks mounted, Putin made his decision. Russia effectively cut off gas flows to all but a handful of Kremlin-friendly countries. The predictions of doom began in earnest. Brussels started discussing national gas rationing plans. Industry shutdowns were predicted, and economists foresaw double-digit falls in GDP.
However, instead of collapsing into paralysis, Europe’s nations rose to the challenge. A short propaganda film circulated on Russian social media in December 2022 depicted a European family resorting to eating their pet hamster due to the devastating effects of the Russian gas cut-off. This was clearly an exaggeration, but it highlighted the Kremlin’s expectations of the impact of their energy weapon.
In reality, the winter in Europe was relatively normal. Christmas markets went ahead, pubs were warm and full of light, and no one was forced to resort to such drastic measures for survival. Of course, there were impacts from the gas shortfall. Surging energy prices put a damper on industry, slowing economic growth, and inflation ran rampant. However, compared to what people had been predicting, the situation was manageable.
The question then is, how did Europe manage to weather this crisis? The answer lies in the most dramatic set of adjustments the continent has made in decades. Launched in May 2022, the Re-Power EU plan aimed to combat the energy market disruption triggered by Russia’s war. The plan focused on three core areas: reducing energy usage, diversifying energy supplies, and investing in clean energy.
The reduction of energy usage was remarkable. Across 2022, overall European demand for natural gas was 12% lower than it had been at any point between 2019 and 2021. The drop was especially noticeable in winter. Households and industries adapted remarkably to campaigns asking them to turn their heating down.
The diversification of energy supplies was another significant achievement. EU leaders courted nations like Algeria and Azerbaijan, striking deals for increased flows through pre-existing pipelines. However, the real star of the show was Norway. Despite not being in the EU, Norway is blessed with massive energy reserves in the form of offshore oil and gas fields. In 2022, Oslo made sure to share some of that wealth.
The third pillar of the Re-Power EU plan, investing in clean energy, hasn’t exactly landed yet. However, the clean energy transition remains a live goal for completely replacing Russian gas by 2028.
While Europe’s triumph in the energy war is noteworthy, it’s equally important to consider how Russia lost. By cutting off supplies to Europe, Russia has not only failed to achieve its objectives but also created conditions that will make its country poorer and less relevant in the long run.
Russia’s economy relies heavily on extracting and selling hydrocarbons to other nations. By permanently cutting themselves off from their largest export market, the Russians have not just shot themselves in the foot; they’ve blown their leg off.
In 2022, Russian gas exports to the entire world fell by 25%, driven by the embargo on Europe. There’s no one out there to replace those EU customers. While Russia is making a big show of its ability to sell gas to China, the amount Beijing is able to buy is limited by physical capacity.
The loss of the European gas market for Russia is a serious problem. The Russian economy is likely to suffer in the long run, and the fact that a big chunk of the European energy market is now orienting towards one of its enemies, America, is just the cherry on top.
However, while Europe might have survived last winter, there are some people out there who think the continent is not out of the woods yet. The sheer unpredictability of the weather, the potential for a serious drought this summer, and the possibility of falling energy prices could all pose challenges.
In conclusion, the energy war has proven to be a transformative event, representing a total break with the past and a reordering of the entire Europe-Russia relationship. The long-term effects of this shift are yet to be seen, but one thing is clear: Europe has demonstrated resilience and adaptability in the face of crisis, and Russia’s energy weapon has backfired spectacularly.
