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On 22 February, Germany scuttled its approval of a newly built gas pipeline from Russia, and is now planning to import liquefied natural gas from countries such as Qatar and the United States.
Russia’s unprovoked invasion of Ukraine has roiled the markets and geopolitics of energy, driving oil and gas prices to their highest levels in nearly a decade and forcing many countries to reconsider their energy supplies.
The allure of cheap Russian energy proved too strong in the past, but this time might be different, says Veronika Grimm, an economist at the Friedrich Alexander University of Erlangen–Nuremberg in Erlangen, Germany.
The war has prompted political leaders to rethink their energy plans, which could have profound impacts on a range of issues, from a burgeoning food crisis to global efforts to curb greenhouse-gas emissions.
An embargo would only work if the EU took part, economists say, because it would be difficult for Russia to quickly find new customers for the oil and gas it sends to Europe.
And despite bold promises about cutting ties with Russia, European nations have thus far opted for easy energy: the amount of Russian oil and gas entering Europe has actually increased since the war in Ukraine began.
On 25 March, US President Joe Biden pledged to send more liquefied natural gas to Europe, and Germany has already signed a deal to import the product from Qatar.
The commission’s plan seeks to replace 101.5 billion cubic metres of Russian gas by the end of the year.
“We need a portfolio of options to replace Russian gas and safeguard energy security in the short term,” says Simone Tagliapietra, an economist at Bruegel.
The energy crisis is particularly acute in Germany, which relies on Russia for roughly half of its natural gas and coal and for more than one-third of its oil.
A report last month by Leopoldina, the German National Academy of Sciences, found that Germany could survive the next winter without Russian energy , but only with extreme efforts to replace Russian gas with imports while ramping up coal-fired power plants and promoting large-scale conservation and energy efficiency.
Although the next few years could be tough, the long-term impact on energy policy and greenhouse-gas emissions in Europe could be beneficial, according to Grimm, a co-author of the Leopoldina report.
In the longer term, Grimm says, the German government is proposing to increase the share of renewable energy sources in the power sector from around 40% today to 100% by 2035, 5 years earlier than planned.
When prices for oil and gas have surged in the past, it has spurred a series of changes in opposite directions: consumers tended to drive vehicles less and purchase more fuel-efficient versions, whereas companies and nations invested in oil and gas infrastructure around the globe to ramp up production.
Although consumption is likely to drop in the short term as drivers respond to rising prices, that doesn’t mean we should expect a massive shift towards smaller or electric vehicles, says John DeCicco, an engineer at the University of Michigan in Ann Arbor who tracks the vehicle industry.
By contrast, economists have yet to see major oil and gas companies ramp up their investments in fossil-fuel production.
Although the war in Ukraine will probably speed up Europe’s move away from fossil fuels, it could slow the clean energy transition — and boost greenhouse-gas emissions — in other parts of the world, fears Nikos Tsafos, who tracks global energy and geopolitics at the Center For Strategic and International Studies, a think tank in Washington DC.
Another key question, some economists say, is how rising energy prices and the potential loss of grain supplies from Ukraine and Russia could reinforce inflationary effects and drive up prices for food and other commodities.
But global food stocks are sufficient to cover the loss of wheat and other grains from Ukraine as a result of the war itself, and losses from Russia owing to economic sanctions, says Christopher Barrett, an economist at Cornell University in Ithaca, New York.
“One of the big casualties of the Russian invasion will be people who are already teetering on the edge in other places,” he says.