Can Europeans stay warm this winter without Nord Stream 1?
Over the past few weeks, the staggering rate of inflation (which has been exacerbated by the energy crisis in Europe) has fuelled social unrest that has led to protests across the continent. Citizens are coming out in droves to protest the cost of living and to hopefully prompt their governments to act to ameliorate the situation before it gets worse, which analysts predicate it will come winter. In Vienna, nearly 3,000 protesters took to the streets to demand an end to “suicidal sanctions” and condemn the actions of NATO for worsening the security situation in Europe, according to local media reports. A few weeks ago in Prague, an estimated 70,000 people protested the Czech government, calling for control of the soaring energy prices and voicing opposition to the European Union and NATO. Similar protests have taken place in Germany and France.
The energy crisis reveals that support is easy to give when it is helping, not hindering, the political and economic climate of a country and the approval rating of the country’s leader. The Russian response to sanctions, which have been in place since the invasion began, have taken a toll over the last few months, and the worst is yet to come as temperatures cool and Nord Stream 1, the pipeline that supplies gas from Russia to Europe, is still indefinitely cut off. This means flows of Russian gas to Europe are effectively halted. Russian gas flows to Europe have fallen 89 per cent so far this year and the EU is struggling to find a solution to the shortage of gas, whilst not wobbling in its support for Ukraine. On 5 September 2022, Russia maintained that it will continue to shut down its Nord Stream pipeline for as long as Western sanctions are in place.
Carlos Diaz, Rystad’s Head of Power said, “The coming winter is certain to be the most challenging Europe has seen in decades—and consumers or governments are expected to pay the price,” effectively warning that blackouts and other supply issues could come as early as this October. The EU has built up gas reserves, but as winter arrives, the heating demand will put more pressure on these reserves if there is no additional gas flow. Prices will likely get higher as the availability of gas remains low. According to Morgan Stanley, at today’s futures prices, annual spending on electricity and gas by consumers and firms across the European Union could rise to a staggering €1.4trn, up from €200bn in recent years. The question is, what price are leaders—and citizens—willing to pay to stand up to support Ukraine and, some would argue, democracy? The cost of energy is already fueling social unrest, and if these prices climb, which is the forecasting, the political situation is bound to get worse. There are early signs that this energy crisis will not only undermine public support for the war in Ukraine but contribute to the rise of populism across Europe. Far-right leaders advocate rethinking sanctions against Russia because of the harm to the economy of a country. The upcoming general elections in Sweden and Italy will signal whether these worries of a resurgence of populism will come to fruition.
Stability and security in the EU may be threatened by the continual support of Ukraine in the form of sanctions, but as the first lady of Ukraine Olena Zelenska said, while the UK and the EU are “counting pennies,” Ukraine is counting casualties. These words may resonate now but may become less impactful as people cannot heat their homes. It is a luxury that some people are readily able to absorb rising costs to stand up for their ideology. People in Canada and the United States are not shielded from the rise in the cost of living, but it is easier for North American leaders to take more aggressive measures towards Russia when their populace does not face a shortage of energy. Up until recently, there has been a consensus that protecting democracy and sovereignty in Ukraine is worth economic harm. This consensus may be destabilized as the real costs of support rise.
The EU is expected to unveil a plan that may possibly cap the price of energy; however, analysts at the international energy agency say this is a short-term solution, as the real issue is the fundamental shortage of gas created as the share of Russian gas plummeted. Time will tell if the support for Ukraine is unwavering as pledged in March. The BBC reports that officials in Kyiv are aware the coming months will be challenging, and the message to the EU has been consistent, and probably coordinated: “it will be hard for you but imagine what it will be like for us.”
The lack of power Europe is facing also draws attention to how poor planning can cripple a country’s economy when they put all their eggs in one basket and only rely on one power source and provider. This is nowhere more evident than in Germany, where dependence on Russian gas has always been a pressure point for politicians. Recently, the decades of poor planning have come into the limelight. Germany has relied on Russian oil since the 1950s and for a long time has been warned by many worlds leader of the danger of being overly dependent on Russian gas. From Reagan to Trump, American presidents have pointed out the problem with this dependence: It gives the Kremlin, now Putin, political and economic leverage. The energy crisis is a problem that demands immediate attention and shows the danger of overreliance on one energy source. Recently, I spoke to a group of 20-something German medical students and I asked them the question of whether they think most Germans are willing to bear high energy costs to continue to support Ukraine. They responded in a chorus of nods, and statements of agreement, and one girl told me unequivocally “absolutely, we shouldn’t have trusted Russia to keep giving us gas. We should be the ones who have to now pay the price of poor decision making, not the Ukrainians.”