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An expert explained why Berlin decided to dramatically increase investment in fossil fuels

German Chancellor Olaf Scholz called on his G7 partners to lift the voluntary ban on investments in fossil fuels abroad. He explained that this measure should be "a temporary response to the current energy crisis." The German politician's sensational proposal was already supported by his colleague from Italy, Mario Draghi, who admitted that participants of the last G7 Summit discussed a possibility of lifting the embargo on financing hydrocarbon production in the third countries.

Eco-activists, naturally, are against it. They argue that such a decision contradicts the postulates of the Paris climate agreement. And, in fact, it nullifies all the progress made in recent months and years in the fight against global warming. The logical arguments in response are that we cannot eat just the environment. If we follow the same course, Europeans, especially Germans, will soon face an acute shortage of electricity, which will lead not only to a lack of heating in private homes, but also to a complete standstill in many businesses. The consequence of this state of affairs will be a sharp rise in unemployment and inflation, which are already at an unprecedentedly high level.

What do the latest statements by European politicians mean, and what will be their consequences? Forpost addressed this question to Vladimir Litvinenko, a leading expert in the field of the fuel and energy complex and rector of the St. Petersburg Mining University.

- Vladimir Stefanovich, can we say that the proposal to resume investment in fossil fuel extraction abroad indicates a kind of epiphany of the EU leaders; that they are ready to reconsider their energy strategy because they realized that their bet on the development of alternative energy has not justified itself?

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© Форпост Северо-Запад

- In order to revise any strategy, its preliminary analysis and analysis of mistakes made during its implementation is necessary. Otherwise, it is almost impossible, or at least very difficult, to avoid those mistakes in the future. But the leaders of the EU member states have done nothing of the sort. Moreover, their arguments make it clear that they did not intend to do anything of the kind, because there is obvious confusion in their statements when interpreting the cause-effect relations.

For example, they cite the energy crisis as the reason for renewed investment in foreign oil and gas projects. In fact, it is just the opposite. One of the reasons of this crisis was a decrease in investments in hydrocarbons and an excessive reliance on renewable sources: wind turbines and solar panels, which is totally unjustified from a scientific point of view.

We have repeatedly pointed out to our European partners: due to their shortcomings, renewable energy sources cannot ensure stable electricity production, at least at the current stage of scientific and technological progress. Therefore, excessive enthusiasm for the green agenda and discrediting fossil fuels will lead not to a reduction of the carbon footprint, but only to energy shortages and rising energy prices, which will threaten the sustainability of the EU's socio-economic development.

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© pixabay.com

Today we see that our fears have been fully borne out. Reduced financial injections into oil and gas production have led to a reduction in supply, not demand. Global demand, on the contrary, is increasing, primarily at the expense of the Asia-Pacific states. Yes, developing powers, including India and China, are willing to pay increased attention to environmental issues. But further industrialization is just as important to them. And they can ensure their economic progress solely by increasing hydrocarbon consumption.

- Let's go back to the EU. You said that wind turbines and solar panels cannot ensure stable electricity production. But in Germany, for example, they already generate almost half of all electricity. In Denmark, the figure is even higher. Isn't this proof of the great future of renewables?

- I am convinced that green energy sources, including nuclear power plants, hydroelectric power plants, and geothermal power, have a great future. But mankind has not yet created a way to accumulate electricity generated by wind turbines or solar panels, which is available on an industrial scale. This is the main reason why they cannot become the basis of the global fuel and energy complex. At least not in the foreseeable future.

Perhaps some post-industrial states will indeed be able to make the energy transition by mid-century. But the implementation of this task will require from them huge financial costs and, most importantly, will carry huge risks for consumers associated with disruptions in electricity supply, that is, with periodic blackouts.

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When it comes to Germany itself, renewable sources already account for about 50% of all generation there. But the week before last, for example, according to the Fraunhofer Institute for Solar Energy Systems, that number suddenly dropped to 33%. And do you know why? Wind speeds have gotten slower. Consequently, the share of coal-fired generation increased from 32% to 40%. Gas consumption also increased, from 10 to 17%.

Due to the shortage of blue fuel in the EU, some of this volume has been borrowed from the reserves that are created for consumption during the winter. But what will Germans do in January or February if the winter is cold and Germany runs out of fossil fuel reserves? What would climate activists say if they had to live without heating and electricity for a few days because they underestimated the role of hydrocarbons? Is this the future they want for themselves and their country?

Obviously, if Europeans two and a half years ago had found the courage to oppose Washington, defend their national interests and complete Nord Stream 2, they would now live in a completely different reality. After all, natural gas is not an "evil" that poses a threat to nature, as some environmentalists claim, but a real "safety cushion" that guarantees stability of energy supplies, including during peak loads.

If necessary, the volume of methane combustion at CHPPs can be increased or, on the contrary, reduced, thereby regulating generation parameters. Neither solar panels nor wind turbines, as I mentioned above, have this potential. They supply to the grid exactly as much electricity as they produce. And if on "bad" days they produce less kilowatt-hours, the difference can only be made up by fossil fuels.

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Methane combined with renewables is the best mix, which allows, on the one hand, to ensure the energy security of states and the sustainability of their socio-economic development, and on the other hand, to minimize greenhouse gas emissions. For the European Union such a mix is particularly relevant, since in the medium term, the EU is going to ban in its territory the use of diesel boilers for heating and even the sale of cars with internal combustion engines.

There is no doubt that the implementation of these and other initiatives in the field of electrification will require a significant increase in the volume of electricity generation, and hence the volume of fossil fuel burning in cogeneration plants. And there is not much of a choice here. If you don't want to consume natural gas, then you have to consume dirtier fuel oil or coal. These are the plain truths, and they should be obvious to politicians, on whom the future of millions of people depends.

In reality, unfortunately, this is not the case. For example, last year, during her campaign for the Bundestag, Annalena Berbock, Germany's current foreign minister, called for a veto on the construction of Nord Stream-2. This cost her part of the electorate, as the Greens won only 15 percent of the vote instead of the 20 percent they won in the European Parliament elections two years earlier.

Nevertheless, the party joined the ruling coalition. And now its other representative, the head of the Ministry of Industry, Robert Habek, declares that coal-fired power plants are being put out of service, calling it "crisis management." And he warns of possible rolling blackouts due to methane shortages. In other words, the greenhouse gas emissions from Germany have not decreased due to the Greens' actions, but on the contrary, have increased. At the same time, the energy security of the country began to burst at the seams.

The answer to the question of what we are dealing with: obvious unprofessionalism or elementary bias, everyone is free to give for himself due to his own understanding of the current conjuncture. But there is an obvious fact: Berlin is leading its country to an energy collapse. And it took this path not in 2022, but much earlier. Back in December 2019, when it was meekly silent after the U.S. imposed sanctions against the construction of Nord Stream 2.

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It is obvious that the actions of the ruling coalition in Germany go against the interests of the country's residents, half of whom, according to the latest opinion polls, are afraid of freezing next winter. This is further proof of the legitimacy crisis that is gradually spreading throughout the Old World.

- Are the German authorities, including the Greens, condemning themselves to a vicious circle by calling for universal electrification? After all, this process inevitably leads to an increase in the demand for electricity and, consequently, an increase in the consumption of fossil fuels?

- Of course, but this would not be a big problem if the German authorities had a sensible energy strategy. Incidentally, we have repeatedly called upon them at meetings of the Russian-German commodities forum to sign a comprehensive agreement in this area that would indicate the approximate quantities of resources they need to import, in order to better understand their needs. The agreement was never concluded, and this is one of the reasons for the current situation on the European energy market.

Reducing the carbon footprint and greenhouse gas emissions is the most important task, but, paradoxically at first glance, to solve it, we must continue to invest in fossil fuels and, above all, in the exploration and production of natural gas.

The transition to a new energy paradigm cannot happen exclusively through wind turbines and solar panels. And hydrogen, which some scientists propose to use as a means of storing the electricity produced by renewable energy sources, and thus solve one of the key problems holding back their development, will never do the job.

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Not long ago, Elon Musk called hydrogen "the stupidest way to store energy," and I absolutely agree with that statement. Using it for energy is very expensive, inefficient, and unsafe. That's why we have repeatedly argued and continue to argue that the transformation of the global fuel and energy complex, which would significantly reduce the technogenic impact on the biosphere, should not consist of getting rid of hydrocarbons, but of their gradual replacement by alternative sources.

At the same time, humanity should by no means focus its attention solely on the problem of CO2 emissions, which is characteristic of Western politicians and scientists. This is only one of the many ecological problems facing civilization. And it is not the most important one.

It is just as important to increase the volume of waste recycling, to work on improving the quality of traditional fuel, to minimize the environmental impact of cogeneration plants and other enterprises, and create more efficient and cost-effective ways to capture pollutants, including carbon dioxide. If we do not do this, hoping for a rapid energy transition, by mid-century we will still live in a world where oil and gas consumption remains very high, and their extraction, processing and use, due to lack of proper funding, is still causing significant harm to nature.