Energy crisis threatens to shatter European unity, warns IEA chief

The head of the International Energy Agency has warned European countries against a scramble for energy security this winter that threatens to shatter the unity of the European Union and spark social unrest.

Fatih Birol, executive director of the International Energy Agency, said he feared a “wild West scenario” if European countries moved to restrict trade or stopped cooperating with neighbors amid growing concerns about fuel shortages this winter.

“The fallout will be very bad for energy, very bad for the economy, but very bad politically,” Birol said in an interview Thursday at the inaugural Global Clean Energy Action Forum in Pittsburgh. “If Europe fails this energy test, the energy implications could go beyond.”

European countries are becoming more divided as they try to maintain a united front amid rising energy prices that have pushed the continent to the brink of economic recession. But the escalating crisis has raised fears that some countries may strike side deals for Russian supply or restrict energy exports to their neighbours.

Birol, whose Paris-based watchdog agency was funded, said there were “two scenarios” mainly by members of the Organization for Economic Co-operation and Development. The EU and the members will act in solidarity, supporting each other. . . Or there is another scenario, if everyone is for himself. ”

“Solidarity is one of the founding values ​​of the European Union,” Birol said of the latter scenario.

Norway’s Nordic neighbors criticized Oslo last month for “selfish” behavior as it considers halting electricity exports temporarily while it refills its hydroelectric tanks.

Andreas Peland Eriksen, minister of state at Norway’s Ministry of Petroleum and Energy, denied that exports had been halted, however, telling the Financial Times that the country simply “prioritizes filling reservoirs for the same reason as filling Europe with gas (storage)”.

The European Union faced opposition from Hungary and some other member states as it tightened sanctions on Russia in response to its invasion of Ukraine.

Birol also warned of European inaction after the continent managed to build up natural gas reserves ahead of the winter months when demand peaks.

Birol said that even if the continent avoided new “negative surprises” in gas supplies, such as a colder-than-expected winter, Europe would suffer “bruising” in the coming months, including economic stagnation and “significant damage to household budgets”.

He said the crisis for Europe would also last until 2023, given stagnant global supplies and the potential for increased competition for LNG from recovering China and other importers.

When we look around we don’t find many new gases [projects] is coming. . . The Norway, Algeria and Azerbaijan pipelines are nearing their maximum capacity. “It will be another challenging period,” he said.

But Birol also insisted that Moscow “has already lost the energy battle” with Europe as the continent searches for alternative suppliers.

He said that most of Russia’s gas and oil exports went to Europe before the war – but that is now over.

Russia has lost a good customer, and forever. This client paid the money on time and did not cause any political problems,” Birol said.

The head of the International Energy Agency rejected Russian efforts to replace the European gas market with exports to Asia. You do not sell onions in the market. You have to build pipelines, infrastructure and logistics. This will take at least 10 years, he said.

Birol said Russia will also struggle to maintain production because sanctions have restricted its access to Western technology and the capital it needs to continue repairing aging oil fields and gas fields.

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