Christina Lu
As Russia tightens its chokehold on Europe’s gas supply, the continent has been buckling under the weight of one of its worst-ever energy crises. Sky-high prices have forced many European leaders to grapple with painful measures—rationing, bailouts, and even a return to coal power—while others have scrambled to secure new agreements with Azerbaijan, Algeria, and the United Arab Emirates in a last-ditch effort to shore up their own supplies.
And with winter looming, they are in a race against time. Russia, the biggest single supplier of natural gas to the continent, has said it can’t honor some existing contracts for delivery, meaning there will be less gas for Europe, just when temperatures are spiking and gas storage needs to be filled ahead of the winter.
“Russia is blackmailing us. Russia is using energy as a weapon,” European Commission President Ursula von der Leyen said on Wednesday. “And therefore, in any event, whether it’s a partial major cutoff of Russian gas or total cutoff of Russian gas, Europe needs to be ready.”
To understand the scale of the current energy crunch—and what the future could hold—Foreign Policy spoke with Fatih Birol, the executive director of the International Energy Agency. This interview has been edited lightly for length and clarity.
Foreign Policy: You’ve written about how the world is experiencing the first truly global energy crisis in history. What makes this different from past energy crises, and how did we get to this point?
Fatih Birol: The most significant ones before the current one were the two consecutive oil crises in the ’70s. But this time it is not only oil—it is oil, gas, coal, electricity. It covers the entire energy sector. The reasons are simple: As of Feb. 24, Russia was the No. 1 oil exporter of the world, No. 1 natural gas exporter of the world, and a major player in the coal markets. After the invasion, we have seen that what the world is going through today is a major, might be the first, global energy crisis in terms of its depth and in terms of its complexity. In my view, it would take a considerable amount of time for the world to get over this global energy crisis.
Of course, compared to the 1970s, we are also a bit fortunate because, unlike the 1970s, we have some readily available options that we can make more use of, such as renewable energies, much cheaper now compared to the 1970s. We have electric cars, we have nuclear power, we have different options. Another difference between now and the 1970s is that many countries around the world have climate commitments to be in line with their Paris targets. So on one hand, there are some similarities with the 1970s. But on the other hand, there’s a different nature of energy crisis we have today.
Having said that, it is important to note that in the 1970s, like today, the oil crisis not only pushed inflation numbers up and led the world to an economic recession, but also major improvements in the energy technologies. Just to give you two examples, just before the oil crisis, an average car needed 18 liters of gasoline to drive 100 kilometers [or around 13 miles per gallon]. Then the governments after the oil crisis put policies in place, and an average car in the world needed about 10 liters to drive 100 kilometers [or around 24 miles per gallon]. And the second thing is you have seen around the world: Countries are building one after another nuclear power plants, again as a response to the oil crisis. Today, many governments around the world are seeing that Feb. 24 may also be a turning point in the energy policymaking in many countries around the world, and as such may be a boost to clean and safer energy technologies.
FP: Many energy experts have sounded the alarm about Europe’s energy security this winter. In the coming months, what worries you the most? What is the worst-case scenario here?
FB: When I look at it, different countries have different priorities, but energy security, together with national security, is a top priority for many countries. Together with this economic crisis or economic factors, plus the climate commitments, the three of them coming together is a very powerful combination. And I believe this powerful combination can boost clean and secure energy technologies.
But we have in the next few months, especially in the context of natural gas, but also in oil, difficult months in front of us. In many parts of the world, especially in Europe, this winter may be a challenging one, because Europe’s energy policies, in my view, wrongly rely on Russian energy imports at a disproportionate level, a very high level. And now Russia using energy as a weapon means that Europe, and consequently different parts of the world, may have a difficult winter. And when you look at the numbers, we may still need to cut the gas consumption in Europe, at a significant level, otherwise it will be very difficult for Europe to go through this winter.
FP: In Europe, a lot of the focus is currently on the Nord Stream 1 pipeline. In initial reports, Russian President Vladimir Putin said Russia plans to meet its commitments—but at lower volumes, and with warnings of future disruptions. What would that mean for Europe?
FB: Even if some Russian gas would flow from Nord Stream 1 to all of Europe, we may still need to cut gas use. We cannot solve this problem without cutting gas use in Europe. Additional supplies, available gas supplies from other countries, whether Norway or Azerbaijan, will not be enough.
FP: The European Union just announced a plan to start rationing gas. Is that a move in the right direction?
FB: This is very much in line with what we have suggested, and I hope this voluntary 15 percent cut will be enough for us to go through winter. But I believe there may be a need to go for further cuts when we come toward winter. The later we move in terms of cutting gas use, the more drastic measures we may need to take when we are approaching winter.
FP: In the past few weeks, we’ve seen a number of European countries restart their coal power plants. Are you worried about what this will mean for climate goals?
FB: We are facing a major humanitarian crisis now in Ukraine and elsewhere. We are seeing, as I mentioned to you, a global energy crisis. But the third crisis is the climate crisis, and as you all know, about 80 percent of the emissions causing climate change come from the energy sector, and it is the reason we need to reduce our fossil fuel use significantly if we have any chance to reach our global climate targets. Having said that, we are currently in a war context, and here there may be some immediate responses in order to get through these next few months. Here I would completely understand that some countries are making use of coal.
The other thing is I believe the responses we are giving to the current crisis should not lead to major, large-scale fossil fuel investments, which would lock in our energy system and minimize, if not nullify, our chances to reach our climate targets. Such investments, in my view, have at least two major risks. One of them is the climate risk, that we are going to miss our climate targets. And the second one is a business risk, because a big chunk, a majority of those large-scale fossil fuel projects will only [be completed] several years after, and by that time, whether or not there will be a need for additional coal, additional oil, is a big question mark.
FP: Outside of Europe, we’re seeing that a lot of countries are also suffering under these higher prices and fuel shortages. The IEA has said that there are now 25 million more people in Africa living without electricity today compared with before the pandemic. What is the scale of this crisis outside of Europe, and what knock-on effects are we seeing in emerging-market economies?
FB: So when we talk about the high energy crisis, the international attention is focusing mainly on Europe and sometimes on North America. But the countries who do suffer the most are the emerging countries, because they are, on one hand, faced with the high energy prices, and, on the other hand, their currencies are weaker, and they are going through very difficult times.
Here I would like to single out the African countries, the sub-Saharan African countries. In the last 10 years the number of people who had no access to electricity was declining despite population growth. This was very good news. But as a result of the economic crisis and energy crisis, we’re seeing for the first time, unfortunately, the number of people who have no access to electricity is increasing. Those countries are under a heavy burden as a result of Russia’s invasion of Ukraine, and they need special attention from international economists.
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