Green Energy Transition Calls For ‘Desperate Measures’: Global Energy Politics Brief

joe biden green energy
US President Joe Biden looks at a wind turbine blade as he tours the National Renewable Energy Laboratory in Arvada, Colorado, on September 14, 2021, before delivering a speech on the infrastructure deal and the Build Back Better agenda. (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)

April 19, 2022

Russia’s onslaught against Ukraine has given world leaders pause, causing the entire Western world to cut Russia off from its global market system. As a world oil leader, Russia has upset the entire energy export institution, ramping up a sense of urgency that Western leaders have had in transition from their crude oil dependency to a clean and renewable energy market, analysts state.

Interim Solutions Found in Dealing With the “Devils”?

The West has an immediate need to ward off Russia to complete the desired transition to renewables. The BBC quotes analysts calling for a full oil embargo levied against Russia to “end the war,” directly noting the impact Russia has on the world energy system. There is, however, no immediate switch from crude to clean energy sources, which will require an interim solution. 

Some Western analysts call for more meaningful negotiations with energy producer regimes, despite their hostile policies toward the West. Measures appear desperate as negotiations center around finding a medium that allows for energy export equalization, while simultaneously preventing these hostile states from executing threats against the West. 

Western leaders want this to be a defined interim solution, a way to balance the energy market, to move it out of crisis, long enough to transist from crude oil demand to the renewables market. 

American Pigeon breaks down these points, to give you a brief aggregation of major world energy market events that energy leaders are using to steer for this transition. 

Russia’s Bloodlust Pushes The West To Iran, Venezuela and Other “Hostile” Regimes 

Convoluted politics surround the oil and gas exports market. These politics are impacted by the U.S.’s domestic energy policies, the Russo-Ukrainian conflict’s impact on world markets, and the response Western market leaders have given to the aggressive policies of Russia, a world leader in gas exports. 

Russia’s recent assault on Ukraine, coupled with a global energy crisis, has pushed Western leaders to examine more critically Iran as a global trade player. Iran, a nation with massive reserves of oil, has been cut off from the world market due to its regime leadership’s bent to acquire nuclear weapons. 

Brookings Institute has historically described the U.S.-Iran relationship as one transitioning from “containment to coexistence.” The U.S. has waffled back and forth in its Iran policy, most recently with the “whiplash” from Trump’s maximum pressure to Biden’s negotiation tactics. In the meantime, Iran has developed a hardliner internal policy that will not be as eager or willing to cooperate with the U.S. negotiations tactics, warn analysts (see U.S. News, June 2021) 

The Ukraine Effect 

As the Ukraine conflict made its impact on global energy markets, as with the shutting down of Nord Stream 2, gas prices skyrocketed across the world. In the United States this made waves as most American citizens blamed the Biden administration for the spike in prices, as well as Russia and oil companies, according to a poll by ABC News/Ipsos. The Biden administration sought early on to terminate the Keystone XL pipeline’s production, citing environmental hazard concerns. After initially imposing a moratorium on federal land leases for oil and gas drilling, the administration, under pressure to lower gas prices, will resume the sale for drilling with new conditions, according to Brietbart

In 2022, Russia’s war in Ukraine has spelled “bad omens” for the Western effort of nuclear nonproliferation, as Russia has become a friend to Iran. With no clear or clean solution, the West rushes to attempt negotiations, and circumvent market embargos. 

The Effort To Open The Legal Oil Market, Flow Of Energy Transition  

While the energy market remains complex, with factors other than politics impacting the crisis,  U.S. foreign policy in recent years has had significant ripple impact. The oil market remains volatile, according to the Atlantic Council.

The current political calculus finds that renewing Iran’s pre-sanction market would add another 500,000 barrels to the flow of the oil trade per day, as of April-May 2022. This appears to be a major concern of the Biden administration’s recent negotiations with a nuclear-ready Iran. 

The Biden administration and its EU counterparts appeared poised to return to the Joint-Comprehensive Plan of Action Iran nuclear agreement, or JCPOA, in recent months. Talks were set to prevent Iran from acquiring a nuclear bomb. Bloomberg reported in early March that returning to JCPOA would see the United States waive prices on oil. This would allow Iran to sell oil legally to non-U.S. markets, without those markets having to be concerned about direct U.S. sanctions. 

Western leadership poses to stabilize the world energy market competition by ironing out the sanctions on regimes that have been excluded in recent history. This gives the EU and the US non-Russian counterparts to fall back on, decreasing the dependence on Russia for EU oil export. 

Yet, the negotiations that would have brought Iran back into the world energy fold may have proven futile. Iran’s regime is now in the hands of hardliner clerics, not as open to negotiation as their predecessors. Israel warns that Iran has already developed enough uranium to build the bomb it desires, and stalls its nuclear talks with the West for political vantage points, according to Reuters. 

“War Is The Answer” Or So It Would Seem 

Analysts have observed the post-World War 2 world order “rapidly eroding.”Changing world order drives the demands of a clean and renewable energy transition, because of the set place energy has in world stability.  

At present, markets are unstable, and the future of production and policies to balance the flow of crude oil and proliferation of mass destructive weapons loom on the calculus. 

Deutsche Welle writers question whether or not war would fast-track said energy transition. The outlet analyzes that a sudden hard push to decouple the European Union from Russian oil would enforce a “paradigm shift” that could accelerate the energy transition to clean and renewable sources. The organizations Greenpeace and 350.org, affiliated with George Soros, reportedly called for both the complete ban of Russian energy exports and the complete termination of fossil fuel production. 

The EU Has A Need For Non-Russian Oil 

After the Ukraine conflict sparked a heated push for Russian oil decoupling, EU oil exports reportedly started calling for greater measures to push back from the table of Russian oil deals. Fatih Birol, executive director of the International Energy Agency (IEA), writes that Russia’s Ukraine incursion has “put a strain on natural gas markets.” This resulted in the IEA slashing its global natural gas demand growth reports by 50 billion cubic centimeters, bringing the figure down “to the negative range.” In simplified terms, when a natural gas market goes “into the negative zone,” it means that the storage spaces to put the product fill up with an unused product, which makes the prices of that overstock essentially worthless, per Reuters report on a crude glut in 2020.

The Persian Gulf Competition 

The EU continues to buy oil from the Persian Gulf region in large quantities. According to a Statista poll, in 2019 the EU imported 333,618 in 1,000 barrels of oil from Iraq, which was directly compared to the 287,829 in 1,000 barrels it imported from Saudi Arabia. Reuters reported in 2018 that Iraq and Saudi Arabia are major competitors of Iran and that the sanctions against the nation were causing its competitors to “bag” a much larger quantity of oil deals than Iran could because it could not trade legally. 

Iran Black Market Sells To Russia, China 

Insiders of the Iran oil trade, such as human rights activist Bijan Kian, the founder of Iranian Voices of Liberty Institute and a former guest of American Pigeon, have stated that this has pushed Iran into stronger illegal oil trade markets. Iran’s trade with countries such as Russia, China, and Venezuela has increased, according to Kian. 

“The JCPOA Iran deal is a multi-vector issue. It’s like billiards when you hit a ball and then the ball either hits a wall or another ball,” Kian said. He explained that the offers of Sino-Russian commercial and defense alliances may appeal to Iran. In Kian’s view, Iran is not likely to say no to further collaboration with Russia or China. 

Yet, Kian explains that the simple likelihood these eastern nations are to increase their commercial relations does not imply that they are forming a mutually inclusive alliance. Kian, instead, describes the relationship as a predatory, advantage-seeking one between the parties. 

American Pigeon is an independent news entity and is not affiliated with the iVOL Institute. 

Efforts to relax sanctions on the foreign oil market have corresponded with the discovery of large oil reserves in many blacklisted nations. In March 2022, Statista researchers published statistics, set from calculations as of 2020, that found Iran had 158 billion barrels of oil in reserves. This compared to other sanction-prone nations, such as Russia, dialing in at 108 billion oil barrels in reserves, and Venezuela, an identified oil black-market trader (see InSight Crime), with 304 billion oil barrels in reserves. 

The Energy Transition As The End of Moral Obligation Sanctions? 

Western nations have been seen to engage in “political pandering” efforts with the nations ranked under these statistical high-oil output findings. When the Gazprom-operated project, Nord Stream 2, was halted by the German government and major sanctions were placed on Russian leadership, the Biden administration considered lifting sanctions on Venezuela. 

Forbes writer and University of Houston Energy Scholar Loren Steffy lamented that the days of the U.S. being an energy exporter “were limited” along with “dreams of energy independence.” He wrote an argument urging the Biden administration to reopen talks with Venezuela and Iran regarding oil. 

Steffy explains that the energy market is now dominated by corrupt regime leaders who dominate the oil production market as a way to leverage control over their states. He cites an “energy transition” that will end the high demand for oil transport by world economic leaders such as the United States. He also argues that, while sanctions on these nations are good arguments for their human rights violations, the export of oil is controlled primarily by leaders with “unclean hands.” 

An energy transition to electric vehicles will not end the dependence of international relations on each other in terms of energy, Steffy warns. He argues that the production of electric vehicles will require 30% more nickel, cobalt, lithium, manganese, granite, and other precious metals. 

He writes that China produces more than two-thirds of the graphite supply, Australia at least 48% of the world’s lithium exports, and major cobalt supply comes from Sub-Saharan African nations such as Congo. These nations export domestically, but also, nations such as China have heavily invested in the foreign enterprise, particularly in Sub-Saharan Africa, further outsourcing control over global markets. 

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