NATO Secretary General Anders Fogh Rasmussen recently announced that the Russian intelligence service was covertly funding European environmental NGOs to support their campaign against fracking. The former Danish Prime Minister stated that he had “met allies who can report that Russia, as part of their sophisticated information and disinformation operations, engaged actively with so-called non-governmental organizations – environmental organizations working against shale gas – to maintain European dependence on imported Russian gas.”
The accusations do not seem too far-fetched. Russia is very keen on dissuading Europe from exploiting its shale reserves. Disregardful of their own massive fracking projects in Siberia, Vladimir Putin uses environmental arguments to push an EU-wide fracking ban. In a similar fashion, he tries to discourage the US from exporting of Liquefied Natural Gas (LNG) to Europe. This is an option some European politicians such as Britain’s Foreign Secretary William Hague suggested as a way to reduce European energy dependency from Russia. It is currently on the table in the negotiations on the trade agreement between the European Union and the United States (TTIP). Instead of building the infrastructure for transatlantic LNG exports, Putin actually advises the US to concentrate on the Asian market, which according to him would be more profitable for American companies.
Moscow’s goal clearly is to keep the EU dependent on Russia. And indeed, large parts of Europe heavily rely on Russian gas imports: Finland, Lithuania and Bulgaria get all their gas, while and it is the source for about 40 percent of Germany’s supply. That is why EU leaders remain reluctant to impose sanctions on the country, despite the near-universal condemnation of Russian actions in Ukraine. Poland’s Prime Minister Tusk recently warned Chancellor Merkel that “German dependence on Russian gas could effectively limit European sovereignty.”
Still, many EU politicians talk mostly about expanding renewable energies as a way of making Europe independent of Russian energy. Connie Hedegaard, the European Commissioner for Climate Action, said the Ukraine crisis should be a “wake-up call” for European countries to make the switch from Russian gas to clean, renewable sources of energy.
But this simply ignores reality. According to the International Energy Agency (IEA), Europe gets just 1.3 percent of its energy from renewables like solar and wind, whereas it gets about 75 percent from fossil fuels and most of the remainder from nuclear. Even an extremely optimistic scenario from the IEA suggests that by 2035, Europe will only be able to generate 8 percent of its energy from these renewables. Focusing on them is simply populism without realism.
Moreover, subsidizing ever more green energy is becoming unaffordable. Spain is already paying more in subsidies to wind and solar than they spend on their higher education, making a dramatic increase exceedingly unlikely. But perhaps the best illustration comes from Germany, the EU’s largest economy with the biggest focus on renewables.
Last year alone, German consumers subsidized renewable energies to the tune of $27 billion, contributing to an inflation-adjusted 80 percent rise in household electricity prices since 2000. Yet the intermittency of renewables has increased the country’s reliance on fossil fuels since the nuclear phase-out of 2011. As Spiegel pointed out: “Consumer advocates and aid organizations say the breaking point has already been reached. Today, more than 300,000 households a year are seeing their power shut off because of unpaid bills.” Economic models for Europe show that the current climate policies will cost an excruciating $280 billion annually.
Fracking could be a way out of this dilemma, but it requires the European Union to rethink its fear of new technology and look seriously at extracting its shale gas. The EU has enough gas trapped in shale to free the bloc from reliance on Russian energy supplies for at least 28 years.
Yes, fracking has attracted a host of environmental concerns, and some are valid enough to warrant strong regulation, but many are vastly exaggerated. Perhaps the most infamous is the much-viewed clip of a faucet catching fire – originating in the film Gasland – which turned out to be spurious, as the gas was entirely natural in origin.
What many climate-worried campaigners and technology-averse politicians fail to mention is that with good regulation, shale gas will not only make Europe less dependent on Russian supplies, but that it is also this decade’s best solution in terms of cutting CO2 emissions and improving living standards. The amazing truth is in fact that fracking has succeeded where Kyoto and carbon taxes have failed. Due to the shale boom in the US, natural gas has replaced an unprecedented ten percentage points of the much more polluting coal. For 2012, when accounting for more wind energy and the economic crisis, the shift to gas has managed to reduce CO₂ emissions by about 300 megatonnes (Mt).
Compare this to the fact that all the wind turbines and solar panels in the world reduce CO₂ emissions, at a maximum, by 275 Mt. In other words, the US shale gas revolution has by itself reduced global emissions more than all the well-intentioned solar and wind in the world.
Moreover, the economic benefits of fracking are indisputable: As natural gas prices in the European Union have doubled since the year 2000, U.S. prices have fallen by about 75 percent in the past few years. Annually, the global solar and wind subsidies cost $60 billion, whereas the US is making at least $100 billion from cheaper energy.
Despite the strong opposition from environmental groups, there is a silver lining on the horizon. Even the European Commission, whose environmental agenda is strongly influenced by the precautionary principle, is now considering shale gas as a means to increase the Union’s energy security.
The advantages of producing its own shale gas are many, and they go beyond gaining independence from Russian gas and the associated latitude in foreign policy. A European fracking bonanza promises to reignite the crisis-ridden economy, with industries and consumers strongly benefitting from cheaper gas prices. Moreover, it could be the biggest source of CO2 reductions this decade.
Of course, fracking is not the silver bullet to solve climate change. In the long run, we need to switch to green energy. But as long as green technologies cost more than fossil fuels, this change will never happen. Shale gas can help us reduce emissions while we focus on research and development to drive down the cost of future renewables.
Europe should not be impressed by Russia’s red herrings. As this decade’s green solution, shale gas is a bargain that’s difficult to pass up.
