The Oil and Gas Industry is Using the War in Ukraine to Profit and Push Its Interests

Source: Desmog UK

 

Editor’s Note: This is part of a new column, Gaslit, which will navigate society’s dysfunctional relationship with fossil fuel disinformation. Have a tip or idea? Get in touch.

When Russia invaded Crimea, the EU and United States issued a joint statement stressing the importance of promoting U.S. liquefied natural gas (LNG) exports for Europe. It was 2014 and “American gas” would save Europe from being dependent on Russian gas imports.

Eight years later, Russia again invaded Ukraine on February 24. Europe still imports more than 40 percent of its gas from Russia, and the American fossil fuel industry is still pushing the U.S. government to implement policies that “ensure long-term American energy leadership and security,” as the American Petroleum Institute wrote in a February 28 letter to the U.S. Department of Energy.

“It’s time to change the course and return America to its dominant role in global energy,” read another letter that Republican members of the Senate Committee on Energy and Natural Resources sent to President Joe Biden several days later. 

These are just two examples of the wider trend of the fossil fuel industry and its allies “using the crisis as a proxy to expand U.S. energy exports,” said Julieta Biegner, U.S. campaign and communications officer for Global Witness. “We’ve seen a PR blip of executives and representatives [from the fossil fuel industry] claiming that the U.S. can come to Europe’s rescue.”

Ukrainian environmental lawyer and climate change strategist Svitlana Romanko calls this “peace washing.” Many fossil fuel companies are doing it today, she explained, and “the profits that they are making are really huge.”

In Europe, oil and gas companies are profiting off higher energy prices, and in the United States, Big Oil CEOs are “billions of dollars richer” than they were at the start of the Biden administration. Since the war “became inevitable,” they have sold shares in their companies worth millions of dollars, a recent analysis found. And now they are using windfall profits to get richer. As a result, members of Congress have proposed a windfall profits tax on Big Oil, an idea supported by a new campaign, Stop the Oil Profiteering. The proceeds of a windfall tax would be used to provide relief from higher gas prices.  

Not only are Western fossil fuel companies cashing in on this global crisis — which is not new —  they also “played a critical role in getting Putin to this point,” Jamie Henn, director of Fossil Free Media, said. “There’s no way that Putin would be in the position he is to launch this terrible war and invasion, if it wasn’t for the profits that come from fossil fuels,” Henn added. “And that’s the terrible irony of this moment — that oil and gas companies helped create this crisis.”

BP, Exxon, Shell, Equinor, Eni — many of the major fossil fuel companies — have all had long-standing stakes in Russian gas. It took pressure from the whole world seeing Putin’s “horrific international law and human rights abuse,” Romanko said, for most of them to publicly announce they would pull out of their stakes in Rosneft, Gazprom, or other joint ventures. According to Climate Investigations Center founder and director Kert Davies, continued involvement was a “reputational risk” too big even for these companies. 

Davies underscored how crucial it is that people understand these companies’ investments in Russia have been long-term. In an article tracking Exxon’s ties to Russia, Davies highlighted how, in 1982, although President Reagan was against gas pipelines from Russia to Europe, Exxon, Shell, and BP were planning to use Soviet gas to fuel their own supplies.

Today, for fossil fuel companies doing everything they can to delay the energy transition, gas is a “lifeline,” Biegner said, and tying gas to the war is just another attempt to keep the energy source alive. The fossil fuel industry has a long history of pushing the flawed narrative that natural gas, is a “bridge fuel,” that is, a fuel that is clean or cleaner than coal and will help get us to a lower-carbon future. 

Gas is not as easily transportable as oil. In fact, until LNG technologies came along, it could only be moved by pipelines — which is how a vast amount of Russia’s gas is still distributed to EU countries. Pipelines further entrench energy dependence and are indicative of how susceptible gas is to being monopolized.  

In 2019, more than a quarter of the EU’s foreign crude oil, 41 percent of its natural gas, and 47 percent of its solid fuel — mostly coal — came from Russia. In 2021, the share of gas imports went up to around 45 percent and constituted around 40 percent of the EU’s total gas consumption, with North Macedonia, Slovakia, Finland, Bulgaria, Germany, Italy and Poland among the European countries with the highest share of gas supply from Russia. Last year, oil and natural gas sales made up 36 percent of Russia’s total budget. 

“Putin’s war machine has been funded, fed, and fueled by the coal, oil, and gas industries for such a long time,” Romanko said. “[Russia’s] military buildup has been funded by the [money] it has received from fossil fuel exports and exploration.”

Her words were echoed by climatologist and Intergovernmental Panel on Climate Change (IPCC) member Svitlana Krakovska, who was working on the final stages of the second part of the IPCC’s Sixth Assessment Report when Putin’s invasion of Ukraine made it increasingly difficult for her team to finalize their work. 

“[Fossil fuels] are something without which this war would not be not possible,” she said from her apartment in Kyiv, Ukraine’s capital, where she is staying in the midst of the ongoing war. 

Since Putin invaded Ukraine, Europe has spent more than 17 billion euros on Russian oil, gas, and coal. Germany and Italy in particular are highly dependent on Russian gas and spent more than 14 billion and 10 billion respectively on it in 2021.

“Putin has deliberately weaponized fossil gas.”

– Svitlana Romanko

Russian gas exports aren’t only fundamental sources of revenue for Putin’s imperialism, they also have served as political tools, long strengthening Moscow’s influence over EU member states and other European countries that were formerly part of the Soviet Republic. 

In the first week of March, in response to sanctions imposed over its invasion of Ukraine, Russia’s government threatened to cut gas supplies to Europe via one of the existing pipelines, Bloomberg reported.

“Putin has deliberately weaponized fossil gas to increase his existing energy dominance over the European Union and to threaten European nations that would come to Ukraine’s aid,” Romanko said.

The industry that is now claiming to bail out Europe from dependence on Russian oil and gas, is the same industry that contributed to causing this crisis in the first place. In the United States, “[oil and gas companies] are busy using their harem of congresspeople to grease the skids for ever more exploitation,” Bill McKibben, environmentalist, author, and 350.org founder, wrote in an email to DeSmog.

On the day Russia invaded Ukraine, the American Petroleum Institute tweeted: “As crisis looms in Ukraine, U.S. energy leadership is more important than ever.” The tweet was accompanied by an image that reads “Let’s unleash American energy.” In that thread, API also listed its demands to the Biden administration, including releasing permits for energy development on federal lands and reducing regulation. 

The “patriotic argument,” as Henn calls it, gets used in some European countries as well. In Italy, for example, there was a call by the government in February, which was backed by fossil fuel lobbies, to promote and prioritize “Italian gas” as a means of energy independence and a way to cut gas prices. 

The fossil fuel industry and its allies are using Russia’s invasion of Ukraine to promote energy independence not only to politicians but also to ordinary Americans. “I think one of the most powerful arguments the fossil fuel industry makes is that they’re inescapable, to make it feel like oil and gas are absolutely indispensable for how we live our lives, for how we power our economies, for how we create jobs,” Henn added.

In early February, Energy Citizens, a manufactured “astroturf” movement masked as a grassroots effort and launched by the American Petroleum Institute (API) in 2009, began running a series of ads on Facebook that connected American fossil fuels with the idea of independence and security. “American-made energy: keeping us more secure,” read one; “American-made natural gas and oil: crucial for our energy independence” read another. Versions of these ads, paid for by API, are still running on Facebook.

“The [oil and gas industry] is trying to wrap themselves in this patriotic flag,” Henn said. “And I think that takes place all around the world where the gas and oil industry likes to present itself as key to national security.”

More than 600 organizations in 57 countries have signed a petition calling on political leaders to “end global fossil fuel addiction that feeds Putin’s war machine,” a demand that was led by Ukrainian activists at the beginning of March.

And on March 3, the International Energy Agency (IEA) put out a 10 point plan to reduce the EU’s reliance on Russian natural gas. As well as calling for no new gas supply contracts with Russia, it also suggests accelerating new wind and solar projects, replacing gas boilers with heat pumps, and maximizing existing low-emissions energy sources.

According to Romanko, the IEA 10 points provide some “good support.” However, she said, “what I don’t like is that they are not using the language to end fossil fuel gas dependency, they are using language and numbers and arguments to only reduce dependence on Russian oil, gas, and coal.”

She underscored the importance of governments abandoning Russian coal, oil, and gas but emphasized that the point isn’t Russian gas versus American gas or any other country’s gas, it’s fossil fuels altogether. 

“We also don’t want those fossil fuels from Russia to be replaced in international trade and investment by other countries’ reserves,” she said, and suggested the creation of a “fossil fuel non-proliferation treaty” to “make all governments phase out of fossil fuels.”

As some have argued, the war in Ukraine is not a war over energy resources, however it has “everything to do with our ongoing addiction to oil and gas,” Henn said.

Many conflicts around the world have been underscored by fossil fuels — in Iraq, Syria, South Sudan, and Nigeria fossil fuels have triggered violent conflicts. Angola’s oil reserves have fueled conflict, corruption, and environmental damage. Similar dynamics have played out in other parts of the world.

And because oil and gas are traded on the global market, it doesn’t really matter which country they come from. “As long as we are reliant on oil and gas, we’ll be reliant on Petrostates and we’ll continue to fuel what we’re seeing from Putin and the ongoing climate crisis,” Henn said.

Some European countries, including Germany and the Netherlands, have announced they will aim to speed up solar and wind energy projects in order to transition to clean energy and get off Russian gas. Others, like France, aim to end gas heater subsidies and support heat pumps instead. 

“True energy independence would be based on renewable energy,” Henn said. “But it’s an independence based on a healthier interdependence.” 

“I don’t think the vision we should be promoting is everybody in their own little castle with their own solar panels and batteries and screw everybody else,” Henn continued. “We are going to rely on each other to create the energy, agricultural, and climate resilience systems […] we need to create healthy societies […] that share the values of human rights, sustainability, and clean energy, and put more power into the hands of local communities and people.”

Romanko has also reiterated the need for “distributed, affordable, community-led renewable energy.”

Above all, it’s crucial to understand how deeply interlinked the climate crisis is with everything else. It is a common problem in Western media for the climate emergency to be compartmentalized — global warming, emissions, environmental exploitation only have to do with “the environment” or “climate” and nothing else.  

“Fossil fuels have become a weapon of mass destruction.”

– Svitlana Romanko

“The fact that the IPCC report came as the war started is only another reminder that we should tackle these problems [the climate crisis and the war] at the same time,” Romanko said. “They are undoubtedly interconnected — I make direct connections with a clean energy transition and, at the same time, climate justice.”

The third part of the IPCC report, which will focus on mitigation, is set to be finalized in April. “I have a dream, you know,” Krakovska said from her apartment in Kyiv. “During this last session of the IPCC, the war started. And I have a dream that during the next session of the IPCC the war will stop.”

The climate crisis intersects politics, public health, economics, culture, social justice, geopolitics and many other spheres. Talking about it without underscoring these connections only reiterates one message: that the climate crisis has nothing to do with our lives, our health or even our survival. And that’s just not true. 

The climate crisis contains many other crises. But its solutions, inevitably, cannot be what caused it in the first place. 

“Fossil fuels,” Romanko said, “have become a weapon of mass destruction.”

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