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In Other News – Nations Scramble to Secure Opportunity in New Geopolitical Order – 7/7/2022

July 7, 2022

As the fighting grinds on in Ukraine, nations scramble to secure energy and opportunity in a new geopolitical order. This week, Russia’s parliament passed two bills that could allow the Kremlin to enact “special economic measures” to support its ongoing military offensive in Ukraine. While analysts have remarked that Russia might soon be initiating an “operational pause” to regroup and reset on the battlefield, Moscow is simultaneously trying to figure out how to sustain its troops and equipment in what has become a grueling war of attrition. The proposed bills would require Russian businesses to supply goods to the military and increase labor demands on employees providing goods and services to the war effort. But as Putin takes measures to ensure a functional military, with no end to the battle in sight, other nations are taking great strides to ensure their energy security and positioning.

Old and new energy sources and partnerships are now under consideration. On Wednesday, France announced it would be nationalizing nuclear energy, and worldwide, nuclear plants that were slated to close are being given another look. Despite ongoing efforts to reduce carbon emissions, Austria, Germany, Italy and the Netherlands have announced plans to revitalize old coal plants. In preparation for the winter, nations like the UK are also working with power companies to keep the coal burning longer than planned, and in Ukraine itself, mining operations that were on their way out due to climate pressures are now seen as important sources of thermal and steel-making coal. Further, in a striking new dynamic, the International Energy Agency reported that in June, for the first time ever, the United States provided more natural gas to Europe than Russia sends by pipelines.

While green energy alternatives are rapidly under development and receiving significant government funding in places like the EU, they’re still insufficient to satisfy current demand. In the meantime, cross-national energy projects that were stalled or received little attention are also being revisited. Algeria, Niger, and Nigeria are considering reviving a dormant Trans-Saharan gas pipeline project that would ultimately hook up with existing pipelines from Algeria to Europe. Israel is working with Egypt to export its natural gas through pipelines in Egyptian ports, where it might then be transported to Europe. Kazakhstan’s president is reportedly looking for oil export routes bypassing Russia after two significant crude exports were likely interrupted by Moscow in retaliation for the nation’s neutral war stance.

Notably, since the onset of the war, Russia itself has made a reported $24bn selling energy to China and India. But it’s uncertain how this will turn out for Moscow and how long nations like China will find the alliance in their interest. As Putin cozies up to Iran and China to promote cooperation given sanctions constraints, recent reports show that Iran’s oil exports have decreased as Russia captures more of the market. Indeed, while nations might be willing to overlook carbon emissions or price fluctuations in the short term, the ongoing and wide-ranging consequences of the war demand constant reassessment of political strategy.

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