{"id":270153,"date":"2022-03-18T10:30:40","date_gmt":"2022-03-18T14:30:40","guid":{"rendered":"https:\/\/policyoptions.irpp.org\/issues\/putins-war-on-ukraine-dictates-new-priorities-for-energy-security\/"},"modified":"2025-10-07T23:51:34","modified_gmt":"2025-10-08T03:51:34","slug":"putins-war-on-ukraine-dictates-new-priorities-for-energy-security","status":"publish","type":"issues","link":"https:\/\/policyoptions.irpp.org\/fr\/2022\/03\/putins-war-on-ukraine-dictates-new-priorities-for-energy-security\/","title":{"rendered":"Putin\u2019s war on Ukraine dictates new priorities for energy security"},"content":{"rendered":"

When I asked a few people in mid-February what they thought the outcome of a Russian invasion of Ukraine would be, a common response was to predict high gas prices. Since then, numerous civilian deaths, millions of displaced people and even the possibility of nuclear disaster have dramatically demonstrated the much wider costs of fossil fuel dependence and oil-funded autocracies. Energy security needs a clear rethink to account for the humanitarian and political dimensions<\/a> of the current crisis, taking lessons from previous oil-related conflicts<\/a> and the importance of accelerating a just transition<\/a> away from fossil fuels.<\/p>\n

Autocratic rule and kleptocracy<\/strong><\/h3>\n

Russian President Vladimir Putin\u2019s dangerous personalist rule<\/a> has many causes, but Russia\u2019s resource wealth is certainly among them. As many studies confirm, oil wealth and autocratic rule<\/a> have a strong and enduring relationship, with new evidence<\/a> pointing out that oil income increases the likelihood of personalist autocratic rule.<\/p>\n

Access to vast natural resource revenues makes an autocratic regime more powerful against challenges. Rulers can easily deploy a wide range of instruments to maintain their grip on power<\/a>, including populist handouts<\/a>, co-optation<\/a> and forceful repression<\/a> and also receive blind foreign support<\/a> from countries and companies seeking to protect their investments and resource supplies.<\/p>\n

Re-imagining Canadian defence and security<\/a><\/p>\n

Five routes for western Canadian oil to get to eastern Canada<\/a><\/p>\n

What is the path to net-zero emissions for oilsands producers?<\/a><\/p><\/blockquote>\n

Resource sectors also tend to offer opportunities for an inner circle of oligarchs<\/a> to thrive. They gain when natural assets supposedly owned by the people are turned over to firms and individuals close to the ruler. The result is a politically dependent economic elite serving the interests of the ruler, including through their privately owned media<\/a>. If some of these elites pose a threat, the rulers can easily move from crony to state capitalism<\/a>, at least more so than the leaders of diversified economies with stronger property rights.<\/p>\n

The combination of autocratic rule and wealth concentration, which characterizes countries affected by the so-called \u201cresource curse<\/a>\u201d is generally bad news for local populations. There are limited opportunities for dissent or avenues for wealth redistribution outside the confines of state handouts.<\/p>\n

Petro-aggression<\/strong><\/h3>\n

The combination of personalist rule and massive oil revenues<\/a> also presents a danger to neighbouring countries. Not all oil-rich autocrats will decide to expand their rule beyond their borders, but aggrieved and ambitious ones will often do so<\/a>. Aggressive and revisionist ideas are easier to put into action through oil-funded institutions and military apparatus.\u00a0Fewer counter-powers stand in the way of decisions to invade.<\/p>\n

Beyond military capacity, oil wealth can also enable the accumulation of a war-chest. In addition, in the absence of effective sanctions, the crisis itself may generate a windfall as oil prices climb. Even when sanctions are imposed, a big enough exporter can rest assure that some oil will flow <\/a>to regional or international markets, helping to maintain income and opening opportunities for pragmatic alliances and highly profitable sanction-busting networks<\/a>.<\/p>\n

The costs of resource dependence<\/strong><\/h3>\n

Nuclear deterrence is at the heart of NATO\u2019s unwillingness to enter the conflict right now. But, another deterrent may be Russia\u2019s control over major resources. Not only do many European countries depend on Russian natural gas<\/a>, but Russia is the world\u2019s second-largest net oil exporter<\/a>.<\/p>\n

With close to five million barrels exported per day, Russian output accounts for 12 per cent of the global oil trade. Withdrawing that much oil from the market would likely double its price. Oil prices have already climbed \u2013 by nearly 25 per cent<\/a> in just the first week of the war. Russia\u2019s exports of natural gas also account for about 40 per cent of the European Union\u2019s total natural gas imports<\/a>.<\/p>\n

Canada needs an ambitious energy-retrofit plan for buildings<\/a><\/p>\n

A critical step in the net-zero energy transition is modelling the future we\u2019re aiming for<\/a><\/p><\/blockquote>\n

Economic sanctions against Putin\u2019s regime initially did not include a shutdown of fossil fuel exports out of Russia. This is despite the fact that the sector contributed 36 per cent<\/a> of the Russian government\u2019s budget in 2021 and will possibly reach half or more in 2022, given the other sanctions in place, the rise in oil prices and the closure of many foreign ventures.<\/p>\n

Four days after the start of the invasion, the Canadian government<\/a> declared a ban on oil imports from Russia. The Biden administration made a similar move<\/a> on March 8. This followed the Ban Russian Energy Imports Act<\/em><\/a> introduced by a bipartisan group of senators. The British government<\/a> also imposed a ban on imports.<\/p>\n

Yet, these three countries are major producers and do not rely much on imports from Russia. However, European Union countries and China are not in such a position. Fossil fuel sanctions would have serious consequences for their energy security and possibly broader social stability, at least in the short term.<\/p>\n

Still, on top of the widespread divestment and departure of Western oil companies from Russia, some traders are now \u201cself-sanctioning\u201d Russian oil, with millions of barrels not finding any bidder<\/a> without a major discount.<\/p>\n

No major oil and gas producer has been capable and willing to significantly increase production<\/a>, which would help bring down prices and ease the effect of sanctions on energy exports. But this will likely change as production and transportation capacity are increased, and higher prices motivate the reopening of fields that were commercially marginal.<\/p>\n

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An oil-rig supply ship in Bergen Harbor, Norway, with the city of Bergen in the background. Shutterstock.com<\/figcaption><\/figure>\n

Algeria<\/a> and Norway<\/a> have sought to provide more gas to Europe, and the U.S. is negotiating with Venezuela<\/a>, offering to ease some sanctions on the South American nation in exchange for Venezuelan oil. Stepping into its strategic role and eager for the crisis to support the European Green Deal, the International Energy Agency (IEA)<\/a> has provided a 10-point plan<\/a> to the European Union to reduce its reliance on Russian energy supplies.<\/p>\n

Summary of IEA\u2019s 10-point plan<\/strong><\/h3>\n