Earth Protect Blog

By Liam Denning

Bloomberg Opinion

Modern society depends on long, complex systems that tap deposits of fuel, often in unstable or inhospitable parts of the world, and carry it across deserts, mountains and high seas eventually to flow from spigots everywhere — even Antarctica.

Power grids in much of the world reliably supply not only dense cities but also remote villages and homesteads that could never justify the cost of those long lines on their own. Increasingly, we use electricity sources that operate at the behest of the weather and time of day rather than our demands. We also — get this — split atoms to do stuff like charge our phones.

Raise the idea of maybe doing all this differently, however, and an inevitable reply is that doing so would be “unrealistic.” As Russia visits an increasingly brutal war on Ukraine, the moment has come to finally scrutinize the actual meaning of that word.

On Thursday the International Energy Agency released a 10point plan to reduce Europe’s imports of Russian gas by a third within a year. That amount is the equivalent of the entire annual consumption of France, the EU’s second-largest economy, and then some. This would involve a combination of things such as bidding for every spare cargo of liquefied natural gas, delaying closures of nuclear power plants, a 200-billion-euro hardship fund for poorer households — funded by a tax on power generators’ profits — and encouraging everyone to turn down their thermostat by 1.8 degrees Fahrenheit.

My first reaction was along the lines of “yeah, right.” Doing almost anything energy-related within a year is a tall order. Plus, I am perhaps scarred by the memory of American politicians who staked out vociferous pro-choice positions on … incandescent light bulbs. As a species, we like our energy cheap, instantaneous and out of sight and mind. There are multiple vectors of skepticism with which to attack the IEA proposal, including the cost of those LNG bids, the corporate backlash against a hardship tax and the challenge of persuading several hundred million Europeans to put on sweaters indoors or get around to installing decent insulation.

Consider the alternative, however: Continue to tie the continent’s fate to the whims of a regime now trashing the security paradigm that has preserved peace for almost eight decades. Accept that the Kremlin can threaten economic ruin, invasion and even nuclear war if its demands aren’t met, while funded in part by its potential victims. This doesn’t sound particularly realistic either; adjusting thermostats en masse sounds like a snip by comparison.

But only by comparison. None of this is easy. All forms of energy come with trade-offs and questions about what’s achievable under — and this is the vital part — our prevailing understanding of risks and rewards. For example, Europe relied on the Soviet Union and its successor states for energy supplies for decades, even amid all the tensions of the Cold War, because the forces keeping the two sides connected were taken to be stronger than those dividing them. That was just reality, unlikely as it seemed.

These days, our conception of what’s realistic is confronted by uncomfortably large doses of reality. A major war in Europe involving a nuclear power seems as if it belongs to another era.

The current resurgence of solidarity among Western democracies is, possibly, another. But that involves all sorts of things that would, until a week or so ago, have been deemed unrealistic: sudden German rearmament, Finland getting serious about joining NATO, the European Union openly supplying weapons to kill Russian soldiers.

Taking the further step of drastically reducing the West’s dependence on Russian energy exports is risky, a sacrifice, complicated and prone to compromise and setbacks. But in this context can it be deemed unrealistic? As my Bloomberg colleague Nat Bullard notes, the world eased its oil habit relatively quickly in the face of other crises in the 1970s.

In addition to Europeans shivering with cold or dread, plenty of other actors are struggling with what’s realistic. For starters, there is Russian President Vladimir Putin, who appears to have held deeply untethered ideas about Ukraine’s will to resist.

There is a school of environmentalists, especially in Germany, who no doubt will decry the IEA’s call to keep existing nuclear plants open, not recognizing the reality that the threat of recession or war will force governments to use every energy source at hand. That includes coal — as Berlin is contemplating already. At the other end of the spectrum, there is OPEC+. Amid triple-digit oil prices spurred by the actions of a leading member, the selfstyled guardian of oil-market stability held a brief meeting this week where it essentially put its fingers in its ears and chanted “la, la, la! I can’t heeaaar youuuuuuu!”

Looming over all of this is the slower-moving but clear and present threat of climate change. Compared with the required retooling of our energy system to deal with that, reducing dependence on Russian energy exports seems eminently realistic. While the acute crisis in Ukraine must take precedence, both efforts are part of the same process. Both involve accepting costs or, rather, internalizing existing costs — in Russia’s case, the cost of insecurity, and in the case of climate change, the cost of catastrophic environmental degradation. What happens to your financial model when you factor in a Russian swipe at a NATO member or an Antarctic ice-shelf collapsing? Faced with implacable threats, the only unrealistic option is to say nothing can be done. Liam Denning is a Bloomberg Opinion columnist covering energy.