On Energy Security: U.S., Europe, and China

Last week, U.S. President Joe Biden and European Commission President Ursula von der Leyen said they would:

• "reduce Europe’s dependence on Russian fossil fuels and strengthen European energy security.

• [increase] approval for renewable energy projects ... including offshore wind technologies .. the rapid deployment of clean energy technologies, including an expansion of solar and wind ... the production and use of clean and renewable hydrogen."

Robert Habeck, German Economic and Climate Minister, said,

• "Every [energy] supply contract terminated hurts Putin.

• ”Companies are letting their contracts with Russian suppliers run out ... switching to other suppliers at an insane pace …"

• Note: Germany gets 55% of its natural gas, 52% of its hard coal, and 34% of its oil from Russia.

Jennifer Granholm, U.S. Energy Secretary, said,

• "The future of energy security, the future of economic security, the future of national security, the future of climate security — these are all inextricably bound together ..."

Wang Xiang, China National Development and Reform Commission, said,

• "Development of hydrogen is an important move for energy transition and a great support for China's carbon peak and carbon neutrality goal …"

OUR TAKE

Increased energy vulnerability, resulting from the Russia/Ukraine conflict, will be a problem for several years – along with other global risks, including food security.

While alternative energy (solar, EV/battery, wind, etc.) has attracted significant investment, recent events will likely increase the investment in green/blue hydrogen and nuclear energy as well.

Russian-backed funds have likely been a factor in shaping public policy in Europe and beyond. Recent sanctions and disruptions may have long-lasting effects on future policymaking.