Europe’s Energy Crisis Approaches Breaking Point

Posted on Friday, September 16, 2022
by Daniel Berman

AMAC Exclusive – By Daniel Berman

While gas prices have declined in the United States in recent weeks (although they still remain more than 35% higher than when Biden took office) they have remained shockingly high in Europe – more than $5.50 per gallon in the U.K., Germany, and France. At the same time, Europe has experienced a catastrophic rise in electricity costs, as many businesses large and small have been forced to close due to being literally unable to keep the lights on. With the left continuing to preach that this situation is only a temporary “transition” period and evidently feeling that economics and politics only matter insofar as they affect the electoral prospects of the Democratic Party, the Biden administration is ignoring the political volcano developing in Europe. Worse, some see it as an opportunity to achieve the ”Green New Deal” they were unable to pass at home, using Europeans as guinea pigs. Not only will this fail, but the attitude risks pushing much of Europe into Putin’s arms.

The reality is that Europe’s energy crisis has long-since morphed into a cost-of-living crisis which is rapidly turning into a political crisis. In the past four months, the governments of the U.K., Italy, and Bulgaria have fallen, as has that in Israel. While domestic causes existed, the commonality is that all four have some of the highest energy prices in the world. Israelis are paying $7.40 per gallon for gas. The U.K., which caps energy prices for households, adjusting it several times a year, recently raised the cap to £3,549 ($4,072) a nearly 80% increase from last year, and almost 300% from before COVID-19. The regulator further warned that in the context of inflation of nearly 18% (more than twice that in America) it was likely it would raise prices further to £4,400 by next summer.

Boris Johnson’s lame duck government was left urging individuals to leave rooms unheated, while restaurants and small businesses have been denied supplies as companies fear they may go bankrupt. A proposal by the opposition Labour Party for the government to freeze prices and pay the difference is economically generous enough to make Biden’s student loan forgiveness look conservative. It would cost more than one hundred billion pounds over the next two years, around $1.2 trillion dollars scaled to the U.S. economy. That is around double the “Inflation Reduction Act.” Yet in this climate, British voters, in desperation, favored it by overwhelming margins, even if it would drive inflation into the mid-twenties. It is hardly surprising that the new government of Elizbeth Truss felt no choice but to implement their own version of the policy and risk the fiscal fallout.

The U.K. is not the only country in political and economic crisis. Germany’s debate over whether to continue operations at its remaining nuclear plants has always been a distraction. The plants are aging and at most an extension will likely buy Germany until 2025-2026. It needs new nuclear plants now. But as the government fiddles, a crisis approaches. A German city already introduced rationing for hot showers last month, while the government has moved to ration gas to railroads. The U.S. Army, in response to the prospect of an energy shortage, issued advice for how U.S. service members in Ansbach could mitigate the impacts of an upcoming shortage. I quote:

If even U.S. military bases in Germany will be unable to heat themselves, what does that say about the U.S. as a superpower or the deterrent power of the American alliance? What is a superpower which cannot keep its own soldiers warm or enable them to bathe?

Emmanuel Macron, always a master of words when actions are needed, recently warned “we are living through… what could seem like the end of abundance.” Macron then reiterated his support for Ukraine, declaring “freedom has a cost,” and insisted his speech was about preparing the French and European public for the sacrifices involved in a long war rather than complaining about the prospect of one.

It should be noted that Macron has a tendency to float “political trial balloons” in the hope others will pick them up. By effectively stating that the Ukraine war is likely to drag on for years, and we must realize that will involve extensive economic and personal suffering indefinitely with no victory in sight, he lays out a choice that allows others, such as the right-wing coalition which is likely to take power in Italy this fall or the German government, to question whether “victory” is worth it while demanding the USA either pay for the costs or face Europe making its own deal with Russia. Macron can thereby be a Cassandra, telling Biden and Zelensky he was on their side, and that he even warned of the betrayal ahead of time, but nevertheless benefit from the “treachery” of others. As a European official told Politico late last month:

“Senior EU officials concede there will likely be a “crunch point” in the fall or early winter, when EU countries start to feel acute domestic economic pain from the crisis, while also being asked to dig even deeper into their pockets and offer more military resources to sustain the Ukrainian economy and war effort.”

The Biden Administration must understand that energy security is national security. Restoring a stable supply of natural gas and other fossil fuels to Europe is not a “setback” for the green agenda, but a perquisite for the unity of the “West” which is so dear to the rhetoric of Biden and his team. A restoration of Russian energy supplies, if the opportunity should arise in the context of a settlement in which Russia withdraws from Ukraine, should not be seen as “appeasement” of Putin, but as a stabilization of Europe, and America’s entire alliance system. Right now, when it comes to energy, everyone, Russia, America, and Europe, are in a race to the bottom to see who can lose less, and the only people cheering it on are the green activists wealthy enough to think it will not affect them. They are wrong. A social and political crisis this winter will not produce a transition to green technologies which do not exist, but rather Europeans groveling to the Kremlin for fossil fuels on Putin’s terms. The choice then is not between green and carbon, but between carbon on Putin’s terms or carbon on our own.

The Biden White House needs to appreciate that while congressional elections come around every two years, the Russo-Ukrainian conflict is a once-in-a-generation challenge to America, the West, and the entire global system. Unless Biden quickly recognizes that inflation, economic hardship, and energy scarcity are not just a threat to Democrats’ polling numbers but a threat to the entire Western alliance, Biden will face another Kabul situation this winter. Energy insecurity has always been, and remains, a national security threat.

Daniel Berman is a frequent commentator and lecturer on foreign policy and political affairs, both nationally and internationally. He holds a Ph.D. in International Relations from the London School of Economics. He also writes as Daniel Roman.