Putin's war may herald a new energy era
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There are fresh signals that the invasion of Ukraine could seismically reshape the West’s energy relationship with Russia.
Driving the news: Germany, a huge buyer of Russian gas, on Sunday announced new steps to buffer itself from Vladimir Putin.
- They include building new liquefied natural gas import terminals, expanded gas storage, and perhaps, reversing plans to close nuclear plants.
- Also Sunday, U.K. Foreign Secretary Liz Truss floated the idea of G7 limits on Russian oil and gas imports.
The big picture: It's part of wider European efforts to boost reserves and clean power that are taking on new urgency in light of Russia's war.
- The European Commission, per several reports, is slated to soon propose larger gas storage requirements.
- Reuters reports that a draft plan also aims to speed renewables deployment as a way to fight climate change and boost energy security.
Reality check: Major new Western sanctions have thus far avoided taking direct aim at Russia's oil and gas exports.
Driving the news, part 2: BP, citing Russia's attack, pledged yesterday to divest its 19.75% stake in Russian state-controlled oil giant Rosneft.
- And last night, Norway-based oil-and-gas giant Equinor said it's exiting its joint ventures in Russia and halting new investments there.
What we're watching: Anna Mikulska, an expert in Russian energy markets and geopolitics, said the BP move likely heralds a wider trend.
- "[The] Russian state is now viewed as a malign actor and, hence, dealing with Russian state-owned companies will be viewed in a negative light, could become scrutinized and will definitely bring public discontent," she said via email.
- Mikulska, a fellow with Rice University's Baker Institute for Public Policy, said she's watching, for example, to see whether Exxon and Shell also back away from their work in Russia.
The intrigue: The Russian invasion is causing ripples in U.S. lobbying and energy debates.
- Oil-and-gas industry groups are jointly urging President Biden to bolster policy support for U.S. LNG exports and back off leasing restrictions, among other moves.
