-Analysis-
PARIS — Ukraine, Israel, Azerbaijan: the three conflicts brewing on Europe’s borders confirm, each in a unique way, the risk we continue to face by depending so heavily on hydrocarbons and their producers, who have used them as a prime geopolitical tool.
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After suffering so much from renouncing Russian gas, Europe must now be concerned about the energy it is importing from Azerbaijan — a country which has just invaded part of Armenia — and the sharp price hikes caused by the recent terror and violence in the Middle East.
These crises have a cost that our governments could not anticipate, and cannot afford. After spending billions of euros to protect the from the consequences of the war in Ukraine and price increases at the pump, financial forecasters in France had hoped to return to a semblance of normality next year. The volatility of the oil and gas markets in recent days suggests the opposite.
As long as Iran is found guilty of having supported Hamas in its terrorist attack, the sanctions which had recently been eased will be tightened, leading to a fall in its oil exports.
Saudi Arabia, for its part, was hoping for a peace deal with Israel that the United States can no longer promise in a war-torn Middle East. It could retaliate by further reducing energy production, thus pushing global oil prices to new heights.
Energy sovereignty
There are two possible responses to this: the first is to favor our safest suppliers, who have the advantage of also being major democracies, such as the United States and Norway.
The second solution is to accelerate our energy conversion and reestablish European sovereignty.
But their hydrocarbons are significantly more expensive than those coming from Russia and the Middle East. And despite the hopes that are being reborn in shale gas, illustrated by Exxon’s takeover of Pioneer at a high price, their production cannot supply the entire world market.
The second solution is to accelerate our energy conversion and reestablish European sovereignty. We are far from getting there. France, which promised to reduce its consumption of fossil fuels by 5% each year, cannot follow through on its targets: it increased by another 3% last year.
And while conflict ravages many corners of the globe, involving oil producers in one way or another, German Chancellor Olaf Scholz continues to wonder whether nuclear power really has its place in a Europe which intends to regain control of its destiny. How many more wars will it take to persuade him?
