Geopolitics

Europe Must Break Russia's Energy Blackmail

A pipeline operator in Portovaya bay, northwestern Russia,
A pipeline operator in Portovaya bay, northwestern Russia,
Florian Eder

BRUSSELS — There is no shortage of good advice for Europe. The United States recommends becoming independent of Russian gas supplies — Vice President Joe Biden, on a recent visit to Romania, passed that tip on to Prime Minister Victor Ponta.

"We have to make certain that Russia can no longer use its energy resources as a weapon against the region," Biden said. EU countries should coordinate their energy markets more closely to create a "secure and interlinked" market that would bring the EU one step closer to integration.

And the message has been received EU leaders intend at their next regular meeting in June to begin redesigning the way Europe gets its energy supplies. The group of the seven largest industrial countries will also meet in Brussels to discuss the subject. The European Commission is currently preparing various talking points that should be published on June 6.

Russia meanwhile has just inked a huge gas deal with China. The agreement is the result of decades of negotiation, and implementation is scheduled over the coming months and years.

The "historic deal," as President Vladimir Putin characterized the agreement, is worth at least 290 billion euros, according to Gazprom. Gas should be flowing to China from 2018 after the pipelines have been built. Meanwhile, the European Union is working on a strategy to become increasingly less dependent on Moscow within the limited possibilities of their countries, which depend on energy imports.

While Biden was in Romania, in Brussels Commission President José Manuel Barroso and Energy Commissioner Günther Oettinger met with Polish Prime Minister Donald Tusk to discuss a European energy security strategy. By freeing itself from dependence on Russian gas, the EU wants to limit Russia's potential for blackmail.

"We refuse to accept that the price of gas is a political instrument being used against Ukraine," Oettinger said after the meeting.

The same goes for Georgia and southeastern European countries such as Romania and Bulgaria that get 100% of their gas supply needs from Russian sources — a monopolistic situation that even without political implications tends to keep prices high.

But politics alone won't keep apartments warm during the cold winter months.

"Under no circumstances do we want energy products to be political instruments, but rather goods, services," said Oettinger who also sketched out some ideas for the June meeting. The Commissioner wants to create a functioning market, and "when you have a working market using energy as a political instrument that is hardly feasible."

The more competition there is, the more supply and demand determines prices, and politics steps aside. This is the case for oil, Oettinger said. "There is a world market price for crude oil." The "completion of an interior market for gas" thus has to be a first priority with an eye of extending that beyond the EU in the longer term, he added.

Oettinger said diversifying sources, pipeline routes, and suppliers are all part of the strategy. "With gas, that’s the most important thing."

Solutions, north and south

EU countries want to increase business with suppliers in Norway and Algeria and bring the gas in not via Russian pipelines as they presently do but, for example, from the Caucasus across a southern route through the Black Sea to southern Europe.

The China deal extends Russia’s customer base by one huge client, and it is a client that can and did negotiate the price of future deliveries until shortly before the agreement was signed.

In April, Tusk presented some ideas for an "energy union" that in many respects resembles Oettinger’s and Barroso’s ideas. However the Pole wants additionally to use European market power to create a joint purchase platform for Europeans an idea that has overtones of set state prices which run counter to Oettinger’s market credo and also met with opposition from member states including Poland’s neighbor, the Czech Republic.

Instead Oettinger recommends that the EU build new pipelines within its borders so that gas can also flow from West to East and so that there are no more energy islands in Europe. There would be new terminals for liquid gas, storage possibilities, and a different focus for public and partially EU-co-financed member state investments away from transportation infrastructure towards energy infrastructure.

Europe has no dearth of roads and railway lines, Oettinger said, but "too few pipelines and electricity grids and this can easily lead to dependence as well as vulnerability to blackmail."

Oettinger also mentioned that renewable energies were losing some of their appeal, in part because they're proving to not be "cost efficient."

But for the time being the priority is avoiding further escalation with Russia. The EU warned Putin about discontinuing gas deliveries to and through Ukraine. As long as the talks that have been going on for weeks continue between the EU, Ukraine and Russia, "the flow of gas should not be interrupted," wrote Commission President Barroso to Russian President Putin. "I am counting on the Russian Federation to honor this commitment." Energy giant Gazprom is responsible for ensuring that European clients get the volumes agreed on.

Energy should not be a political instrument that is the EU credo. And Oettinger notes that Europe tries to adheres to that credo, which helps explain why energy is not one of the main sectors in the list of sanctions against Moscow.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
Future

7 Ways The Pandemic May Change The Airline Industry For Good

Will flying be greener? More comfortable? Less frequent? As the world eyes a post-COVID reality, we look at ways the airline industry has been changing through a pandemic that has devastated air travel.

Ready for (a different kind of) takeoff?

Carl-Johan Karlsson

It's hard to overstate the damage the pandemic has had on the airline industry, with global revenues dropping by 40% in 2020 and dozens of airlines around the world filing for bankruptcy. One moment last year when the gravity became particularly apparent was when Asian carriers (in countries with low COVID-19 rates) began offering "flights to nowhere" — starting and ending at the same airport as a way to earn some cash from would-be travelers who missed the in-flight experience.

More than a year later today, experts believe that air traffic won't return to normal levels until 2024.


But beyond the financial woes, the unprecedented slowdown in air travel may bring some silver linings as key aspects of the industry are bound to change once back in full spin, with some longer-term effects on aviation already emerging. Here are some major transformations to expect in the coming years:

Cleaner aviation fuel

The U.S. administration of President Joe Biden and the airline industry recently agreed to the ambitious goal of replacing all jet fuel with sustainable alternatives by 2050. Already in a decade, the U.S. aims to produce three billion gallons of sustainable fuel — about one-tenth of current total use — from waste, plants and other organic matter.

While greening the world's road transport has long been at the top of the climate agenda, aviation is not even included under the Paris Agreement. But with air travel responsible for roughly 12% of all CO2 emissions from transport, and stricter international regulation on the horizon, the industry is increasingly seeking sustainable alternatives to petroleum-based fuel.

Fees imposed on the airline industry should be funneled into a climate fund.

In Germany, state broadcaster Deutsche Welle reports that the world's first factory producing CO2-neutral kerosene recently started operations in the town of Wertle, in Lower Saxony. The plant, for which Lufthansa is set to become the pilot customer, will produce CO2-neutral kerosene through a circular production cycle incorporating sustainable and green energy sources and raw materials. Energy is supplied through wind turbines from the surrounding area, while the fuel's main ingredients are water and waste-generated CO2 coming from a nearby biogas plant.

Farther north, Norwegian Air Shuttle has recently submitted a recommendation to the government that fees imposed on the airline industry should be funneled into a climate fund aimed at developing cleaner aviation fuel, according to Norwegian news site E24. The airline also suggested that the government significantly reduce the tax burden on the industry over a longer period to allow airlines to recover from the pandemic.

Black-and-white photo of an ariplane shot from below flying across the sky and leaving condensation trails

High-flying ambitions for the sector

Joel & Jasmin Førestbird

Hydrogen and electrification

Some airline manufacturers are betting on hydrogen, with research suggesting that the abundant resource has the potential to match the flight distances and payload of a current fossil-fuel aircraft. If derived from renewable resources like sun and wind power, hydrogen — with an energy-density almost three times that of gasoline or diesel — could work as a fully sustainable aviation fuel that emits only water.

One example comes out of California, where fuel-cell specialist HyPoint has entered a partnership with Pennsylvania-based Piasecki Aircraft Corporation to manufacture 650-kilowatt hydrogen fuel cell systems for aircrafts. According to HyPoint, the system — scheduled for commercial availability product by 2025 — will have four times the energy density of existing lithium-ion batteries and double the specific power of existing hydrogen fuel-cell systems.

Meanwhile, Rolls-Royce is looking to smash the speed record of electrical flights with a newly designed 23-foot-long model. Christened the Spirit of Innovation, the small plane took off for the first time earlier this month and successfully managed a 15-minute long test flight. However, the company has announced plans to fly the machine faster than 300 mph (480 km/h) before the year is out, and also to sell similar propulsion systems to companies developing electrical air taxis or small commuter planes.

New aircraft designs

Airlines are also upgrading aircraft design to become more eco-friendly. Air France just received its first upgrade of a single-aisle, medium-haul aircraft in 33 years. Fleet director Nicolas Bertrand told French daily Les Echos that the new A220 — that will replace the old A320 model — will reduce operating costs by 10%, fuel consumption and CO2 emissions by 20% and noise footprint by 34%.

International first class will be very nearly a thing of the past.

The pandemic has also ushered in a new era of consumer demand where privacy and personal space is put above luxury. The retirement of older aircraft caused by COVID-19 means that international first class — already in steady decline over the last decades — will be very nearly a thing of the past. Instead, airplane manufacturers around the world (including Delta, China Eastern, JetBlue, British Airways and Shanghai Airlines) are betting on a new generation of super-business minisuites where passengers have a privacy door. The idea, which was introduced by Qatar Airways in 2017, is to offer more personal space than in regular business class but without the lavishness of first class.

Aerial view of Rome's Fiumicino airport

Aerial view of Rome's Fiumicino airport

commons.wikimedia.org

Hygiene rankings  

Rome's Fiumicino Airport has become the first in the world to earn "the COVID-19 5-Star Airport Rating" from Skytrax, an international airline and airport review and ranking site, Italian daily La Repubblica reports. Skytrax, which publishes a yearly annual ranking of the world's best airports and issues the World Airport Awards, this year created a second list to specifically call out airports with the best health and hygiene standards.

Smoother check-in

​The pandemic has also accelerated the shift towards contactless traveling, with more airports harnessing the power of biometrics — such as facial recognition or fever screening — to reduce touchpoints and human contact. Similar technology can also be used to more efficiently scan physical objects, such as explosive detection. Ultimately, passengers will be able to "check-in" and go through a security screening anywhere at the airports, removing queues and bottlenecks.

Data privacy issues

​However, as pointed out in Canadian publication The Lawyer's Daily, increased use of AI and biometrics also means increased privacy concerns. For example, health and hygiene measures like digital vaccine passports also mean that airports can collect data on who has been vaccinated and the type of vaccine used.

Photo of planes at Auckland airport, New Zealand

Auckland Airport, New Zealand

Douglas Bagg

The billion-dollar question: Will we fly less?

At the end of the day, even with all these (mostly positive) changes that we've seen take shape over the past 18 months, the industry faces major uncertainty about whether air travel will ever return to the pre-COVID levels. Not only are people wary about being in crowded and closed airplanes, but the worth of long-distance business travel in particular is being questioned as many have seen that meetings can function remotely, via Zoom and other online apps.

Trying to forecast the future, experts point to the years following the 9/11 terrorist attacks as at least a partial blueprint for what a recovery might look like in the years ahead. Twenty years ago, as passenger enthusiasm for flying waned amid security fears following the attacks, airlines were forced to cancel flights and put planes into storage.

40% of Swedes intend to travel less

According to McKinsey, leisure trips and visits to family and friends rebounded faster than business flights, which took four years to return to pre-crisis levels in the UK. This time too, business travel is expected to lag, with the consulting firm estimating only 80% recovery of pre-pandemic levels by 2024.

But the COVID-19 crisis also came at a time when passengers were already rethinking their travel habits due to climate concerns, while worldwide lockdowns have ushered in a new era of remote working. In Sweden, a survey by the country's largest research company shows that 40% of the population intend to travel less even after the pandemic ends. Similarly in the UK, nearly 60% of adults said during the spring they intended to fly less after being vaccinated against COVID-19 — with climate change cited as a top reason for people wanting to reduce their number of flights, according to research by the University of Bristol.

At the same time, major companies are increasingly forced to face the music of the environmental movement, with several corporations rolling out climate targets over the last few years. Today, five of the 10 biggest buyers of corporate air travel in the US are technology companies: Amazon, IBM, Google, Apple and Microsoft, according to Taipei Times, all of which have set individual targets for environmental stewardship. As such, the era of flying across the Atlantic for a two-hour executive meeting is likely in its dying days.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
THE LATEST
FOCUS
TRENDING TOPICS
MOST READ