Athanasios Katsikidis, Kathimerini.gr
On the sidelines of the recent conference at Panteion University’s Institute of International Relations, Emily Holland, assistant professor at the US Naval War College, spoke to Kathimerini and analyzed the energy dimension of the war in Ukraine and the role of the Eastern Mediterranean as an energy hub.
Question. Why did some European states fail to break their gas dependence on Russia?
One of the main reasons is that there were people within those countries that were profiting from that dependence. There was corruption at different levels. So in some places, like Germany, it was not corruption per se, but it was just sort of built into the political system. So you had very powerful utility firms that supported certain German political parties, which basically were making a lot of money because they had this agreement on cheap gas from Russia that they could then sell to their manufacturing base. Germany built its manufacturing base and, basically, the German economic system was built by embedding the 10 years’ worth of gas prices into their business models. So, in places like Bulgaria and even Ukraine prior to the invasion, you had people that were just literally making a lot of money by being sort of middlemen in gas or just working with the distributors to take a cut of the portions.
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The US and Western Europe should focus on how we create friendly supply chains for the minerals that we will need to power a clean energy future’
Question. How has the LNG market reduced the impact of the energy crisis?
LNG has absolutely saved the day for a lot of different countries because it allowed flexibility in gas supply as the EU was moving away from Russian pipeline gas. LNG, of course, is not an answer to everything. It is more expensive and it is a little bit more difficult because you have to ship it from a country, liquefied, bring it to a terminal, regasify it, and ship it again. You have to build regasification terminals, floating terminals. And that is really what is happening at the moment in many places. These constraints result in the landlocked states having less ability to receive LNG. It is more expensive for them to get it. So LNG does not solve every problem.
Question. How likely are smaller countries, such as Greece and Cyprus, to emerge as energy players?
The energy industry and the global energy flows have been so fundamentally transformed over the last few years that you are going to see new players arise. And that will really change a lot of dynamics. The Eastern Med gas fields are a really huge find not only for the energy world but also for geopolitics and these deals are really unbelievable in terms of what materialism can kind of foster in international relations. Certainly, Greece and the other places in the Eastern Mediterranean can become important players in global energy flows. For the next five to 10 years we will be in a pretty tight global energy market. Αnd so the prices will be elevated. Therefore, you have to keep investing in hydrocarbons in order to get to a clean energy future. So, these conditions give room for smaller players to have major voices, and particularly now that the Russia-European energy relationship is really broken.
How will the strategic energy doctrine be shaped after the war?
Over the past few years, Europe put out this strategy called REpowerEU, which is a very ambitious plan to reduce Russian energy supplies completely and then move very quickly to the clean energy transition. It has become very clear that we are moving into a new era of strategic autonomy, where countries are more concerned about strategic autonomy, more concerned about the dangers of interdependence and reliance, particularly in energy. So, for Europe, that means diversification to new suppliers, diversifying to North Africa, to Middle Eastern countries, and to a whole variety of different sources. If you have more suppliers, there is less concern about being reliant on one. And again, there are problems with clean energy. There are supply chain issues and strategic autonomy issues on that. So, what I think is that the US and Western Europe should focus on how we create friendly supply chains for the minerals that we will need to power a clean energy future.