Energy Security and Geopolitics Conference | PM Session

Energy Security and Geopolitics Conference | PM Session

this is the second panel of the day um
this is European energy security new
tools and policies so obviously we’ve
talked about energy security at a very
high level today we’ve talked about it
globally we’ve talked about the
transatlantic relationship
um with with our panelists uh we’re
going to sort of dive into the European
energy security landscape with a bit
more detail and look at some of the
interacting energy markets and some of
the changes going on there um I’ve got
excellent panel uh so to start off to my
left I’ve got Ben McWilliams a fellow at
bugal uh brussels-based think tank that
is doing I think a lot of the best work
on sort of the energy security crisis
that happened over the last few years
the economic ramifications and now
moving out of that looking ahead to the
long-term sort of picture for European
energy which I think is crucial uh
crucial work um next I have I have Emily
Holland who’s assistant professor at the
naval work work Naval War College who’s
done a lot of fantastic work on the
intersection of natural
gas uh policymaking in Europe and Russia
and now is the Deputy political adviser
for critical infrastructure at NATO and
so she’s going to have a lot of
interesting things to say about some of
the infrastructure challenges here and
then joining remotely from across the
pond we have Andre katru who is the
climate policy adviser to the chairman
and CEO at PPC from who we heard from
earlier today um and so once again this
is going to have a lot of insight into
some of the commercial and Dynamics in
the European electricity sector uh so
thank you all for joining um really
looking forward to this a few opening
notes I think um we think about energy
Security in Europe we think about Russia
uh I think you know we could probably
safely say that Visa V Russia European
energy security has improved in the
sense that the the gas weapon has been
used it can’t be used again really uh so
we might think that European energy
Security structurally in a better place
um perhaps that’s true in some
Dimensions uh on the flip side of course
the response to that has been new
infrastructure new
suppliers um new technologies new
commercial Dynamics and so I would just
introduce the idea that rather than uh
structurally improved energy security we
are now moving to just a different
energy security landscape that’s going
to require making sure we you know are
vent about what where and what those
risks are um
and then I think in particular we want
to think about the intersection of
different fuels and different energy
sources and so uh once again natural gas
is on is on everyone’s mind but uh the
the crisis of the last several years
showed in particular the relationship
between natural gas and electricity you
can’t think of those two things uh
independently they are one and the same
in in in some really deep sense uh those
two markets are linked the Technologies
are linked the policy decisions are
linked uh commercial and geopolitical
relationships are linked uh if you think
think about coal you want to think about
LG you want to think about nuclear any
of these fuels any of these or or you
want to think about Technologies EVS
solar panels all of this works within
one combined energy ecosystem and uh
policy decisions in one one sub sector
impact the the the demands on the other
so we just have to keep in mind sort of
that synthesis perspective
um I’m going to start uh just by opening
it up here uh to to Ben um as you look
at your I you know my opening theme
which is the shifting risk uh where for
you is is the new risk where where where
for you is the structural sort of
concern as you look at Europe as a whole
thanks s thanks to the csis for the
invitation it’s very nice to be
here for Europe’s energy risk um I think
coming out of the the gas crisis the
situation there is is is much calmer
than it has been in the past as people
have discussed this morning I think one
key risk and hangover from that is the
impact on Industrial outputs in Europe
which is is very depressed and even as
prices have come down in the last six
months industrial output in Europe
hasn’t hasn’t resumed uh it stayed where
it used to be which I mean I’m an
economist and and you know lots of these
energy intensive Industries I questioned
the relative merits of them being in
certain places in Europe and it probably
makes sense this is a a structural
adjustment on the other hand that’s hard
um societally and politically we have
European elections coming up in in just
a couple of months we have national
elections all around Europe and this
kind of hangover and hits on Industrial
activity I think is is a serious concern
something to think more about and moving
forwards and thinking about Europe’s
energy security risks at least me
personally that’s the way I kind of
think of these Future Energy security
risks is is through products through
manufactured products where in in Europe
it’s it’s not clear what share of future
manufactured products we will have both
energy intensive things like aluminium
steel fertilizers but also which are
also energy intensive solar panels and
electric vehicles uh which are critical
for enabling the transition uh and there
Europe is stuck in this in this Middle
Ground um between both China and the US
where where like the us we feel the
threats of China and the fact that China
dominates so many of these value chains
but also there’s a perception in Europe
of of a slight threat from the the
inflation reduction act that’s not um a
mystery or a secret from people here and
and you know trying to Define this
industrial strategy in in Europe of what
we want to produce and how we want to
produce it in This Global competition
between America and China where we have
a European Union of 27 member states
trying to think of an industrial
strategy is is a really hard thing to do
to get kind of unanimous agreement among
these 27 countries and in my mind that’s
the kind of shaping energy and climate
question of the day uh we have in Europe
we’ve asked two former Italian Prime
Ministers to write reports on this one
of them in Rico has published it Mario
dragy will publish soon um after the new
Parliament commission takes office there
will be an industrial strategy document
published and for me that’s the question
thinking through balancing the fact that
Europe is energy poor in both gas and
oil and will likely still be energy poor
in a world of
Renewables um balancing that and the
kind of the economic efficiencies that
we would get from you know from greater
trade of these Goods with the security
of Supply risk
on those products is the challenge
finding that balance and not
overthinking it someone on the panel uh
this morning mentioned I mean the import
of solar panels or electric vehicles is
is not at all comparable to the import
of of gas or oil if if one’s interrupted
it doesn’t have the same impact but you
know having lived through the crisis in
Europe people think in those terms uh
sometimes that when they have
discussions they’re still having this
fresh in the mind the interruption of
Russian gas so so balancing out this
security of Supply on manufactured
products that are typically energy
intensive for me I think is the in my
mind one of or if not the defining
question for Europe’s energy policy
moving moving forward yeah so the the
the Arc of um The Arc of demand and the
composition of demand and the geographic
distribution of demand within Europe is
obviously determines the supply
requirements it determines the
infrastructure requirements um but it’s
politically a comp it’s not an economic
question per se it is fundamentally a
political one um and and the those
political sort of Dynamics I think are
going to be
consistently challenging uh Emily
um talking about political Dynam
Dynamics I’m thinking about
infrastructure um obviously getting
infrastructure built it’s a politically
challenge challenging issue but uh I
think I’m I’m just curious you know
infrastructure unlike unlike fuel uh it
sits for a long time once you build it
it’s there for 30 30 40 50 years a
transmission line can last for 50 plus
years 60 70 years um gas pipelines
decades so uh you know as Europe sort of
invests in new classes of infrastructure
how should it think about the the okay
we’re shifting away from fuel exposure
but we are creating new security risks
and and how are how are you and I guess
how is NATO thinking about that well I
think one of the major impacts of course
from Russia’s invasion of Ukraine was a
complete transformation in the way
Europe is getting its fuel right so we
have drastically reduced Russian
Pipeline gas so that means an increase
in LNG well LNG comes from a completely
different way it’s not piped over large
swats of land it comes via boat it has
to go to R gasification terminals it’s a
whole new set of infrastructure not only
that but then you have increased
Maritime presence you have more
important and much more um frequent
shipments of LG coming through um now
quite contested Waters um in the North
Sea um through the Baltic Sea so there’s
a whole host of challenges with just the
shift of how Europe is getting its fuel
on the NATO side it’s very challenging
because much of this infrastructure is
not owned by the EU or NATO or even the
states themselves they’re owned by
private companies and consortiums so
dealing with how to protect something
that not even a state owns but a variety
of different companies that are based in
different states is a huge challenge how
do we police that how do we investigate
incidents how do we um convince insurers
and private sector actors that we can
police and protect these things is a
huge challenge because there are so many
different actors involved so I think
what NATO is looking at right now is
trying to figure out how best can we
respond what is the best way to organize
ourselves to respond and protect um to
attacks which we’ve seen are very
difficult to attribute and the problem
with much of this infrastructure is that
it is very vulnerable we obviously saw
this with Russia or with the um
explosion of nordstream but we see it
all the time with smaller cabl smaller
pipelines something as um as simple as
an anchor drag can completely disrupt
very serious and important critical
infrastructure that’s hard to police we
don’t have enough physical assets to be
patrolling all of these things at once
um what we have often viewed now is we
can see like Russian Navy vessels
patrolling their own infrastructure so
we see boats sort of going along
different undersea pipelines and cables
and you don’t want to engage we’re not
at war with Russia NATO is not at war
with Russia so these are really tricky
challenges and I think one of the
biggest challenges that we see is how do
we integrate the private sector and and
that to me has been NATO’s biggest
challenge right now how do we integrate
the private sector how do we convince
them to keep investing to keep building
resilience because one of the big
lessons that came out of the energy
crisis and that still is coming is that
that we did not have enough resilience
in terms of our energy infrastructure in
terms of our grids things could very
easily come down and that’s not energy
security right not having any resilience
is not energy security so we need to
build over capacity and to do that we
need to convince the private sector and
insures to keep building these
assets yeah and that that um sounds
vaguely expensive uh so which I think
we’ll probably we’ll probably come to um
Andre uh I guess same question to you
but you know obviously at you’re at PPC
you’re inside the electric electric
sector you’re thinking about the
relationship between your customer base
your your national government and then
of course you’ve got you know you’re
thinking about the European perspective
you’re thinking about uh the sort of
common European objectives as it relates
to energy security but you have to deal
with the the folks that you have
responsibility to responsibilities to so
I guess to you you know H where is where
is the energy security risk going and
and what is what is the role of PPC in
in that sort of
conversation thank you very much I hope
you can hear me well from from Brussels
so before going specifically into into
your question which I think is critical
and important let me zoom out just a bit
because I think it’s important to maybe
connect a bit with uh the topic of our
panel right so it’s tools and policies
for investing energy security and I
think to proper identify what are the
right tools and and measures and
policies to do that we I think in my
view we need to respond to two critical
uh questions in the moment the first one
is what is energy Security today and how
we are defining it uh and I know you
have a dedicated panel on that coming up
next so I don’t want to spoil the fun
but I think it’s important to yeah no I
I won’t but it’s important to remember
what we ought to consider as affecting
or improving energy security right so as
as the chairman was mentioning at the
beginning of the event we are talking
about layers of energy security nowadays
so for centuries we had domestic
resources that were meeting uh domestic
demand then in the second part of the
20th century we have more physical and
Commercial ties with countries that have
an abundance of that and I think we can
all agree that this is the moment when
geopolitics of energy kind of started
and we’ve seen the limits of that uh
over the past few years with uh Russian
uh gas imported in Europe but we’ve also
seen in this layer a solution uh with
uslg supporting the security of Supply
in Europe and now we have another layer
a third layer if you want of clean
Technologies both on the supply and the
demand side which is highly obviously
dependent on critical raw materials and
uh clean manufacturing we know that but
I think the combination of these layers
uh is actually generating uh different
energy security definitions for each
geography because we are having very
different uh starting points but
geopolitics of tomorrow with this
Renewables picking up will uh arguably
be less tense because we will have more
local production so the destination when
we will have a peak of this uh uh
generation local generation will be less
geopolitically tense but the journey
towards that will be very complicated
which actually leads me to my second
critical question and Ben was uh very
rightly so uh referring to that in his
in his part who are we partner of
partnering up with so as you know John
herdz defined in 1950 the security
dilemma right so when one state
increases its security the other that
leads to the other the other states to
see that and to fear that and to
increase their own security capacity so
in that sense I think we are now uh
living a moment in which uh we can
Define what is happening as a energy
security dilemma with countries
investing in their energy security uh
systems and Frameworks and to this end I
think we would need to understand who
are our trusted and like-minded partners
because a a a too fragmented uh let’s
say way of rebuilding our energy
Security will not give us the full
benefits of uh uh of the energy
transition of economies of scale of
lower energy bills and it will also not
solve the the climate change and for
that reason I think the US and EU
partnership is is probably more
important than uh than ever which
basically leads me to your question uh
so I think it’s it’s it’s important to
understand that what happened over the
past few years in Europe of course
started from the uh gas uh prices
picking up from the uh Russian gas
prices that were increasing and uh that
also took advantage uh like Emily
mentioned of the low resilience that the
Energy System had and probably not a
very well functioning energy Market
design and we’ve seen some coordinated
efforts over the past few years on on on
that but I think the the the the
solution what actually solved quote
unquote the electricity prices crises
was not necessarily the um innov um
Innovative policies that we put in place
because they are not necessarily new and
they are not silver bullets but it’s
actually uh what has been mentioned also
in the previous pal uh panel so USL gas
being uh imported in Europe new uh
suppliers for gas Solutions
infrastructure that you mentioned but
also on the other side Ben is
highlighting also some significant
demand reduction or even destruction at
some point so as you mentioned um
infrastructure and um uh security of
Supply go hand in hand but we need to
understand and to respond to these two
critical questions in my view in order
to find the right policies and tools to
uh to address
that so you know you you’ve mentioned
you know commercial commercial Partners
finding commercial partners and then
and then also but they have to be
trusted and because these are going to
be the bedrocks of our energy security
it’s not going to be a fragmented
equilibrium is like sort of a suboptimal
equilibrium um that’s probably true you
know globally but certainly within
Europe as as well and um the energy
security dilemma is really interesting
as it relates to let’s say the
electricity sector where um you know
it’s still National each each country
has its own sort of priorities Within it
within its borders about how much how
it’s going to produce its electricity
but of course it’s far more optimal to
to integrate to to share resources to
move power across the continent um so
you know i’ I’d love to just sort of
maybe explore this this this challenge
in particular this this integration
challenge um uh for Europe in particular
because it’s it seems to be a key pillar
of of a secure Energy Future and yet
presumably um I’m challenging you know
uh first me I’ll throw it right back to
you
Andre can you just talk a little bit
about about transmission you know I you
know I know uh Greece has plans to
integrate with its neighbors um is it
you know how much transmission is needed
what is the risk of sort of
underbuilding transmission and what are
the what are the blocks
there so I think grids in general both
distribution and transmission are a
common problem across geography so I
think in the US we have more or less the
same issue we have that in Europe as
well
and and before addressing what I see as
being the barriers um Let me let me tell
you that I think on the transmission at
least on the transmission side I think
uh we are talking about a Hidden Gem
here because if we were to actually ramp
up uh investments in the transmission we
would basically convert this
intermittence that we have from
renewable generation in some places more
to a base load like uh energy because we
will be able to uh uh to transport it in
some other region that have a deficit
and and and vice versa right so when it
comes to uh the the barriers to to
ramping up that I think cost is
obviously something that comes uh uh
comes into play quite uh easily and um
that’s the reason why we are not seeing
so immediate let’s say action in that
sense um everything has been passed to
the uh transmission and distribution
tariffs in the past because they are man
natural monopolies operators but
obviously there are limits to how much
politically this can be uh uh converted
into tariffs so I think we need to look
into other Solutions and other policies
to to address that but that would be the
first time we will we will be doing that
in Europe and and also uh in the US as
well because adding some additional
funds to the uh uh distribution and
transmission tariffs is something that
hasn’t been done before so it’s not that
easy even if we were to identify uh the
the money to do that and then I think
the deployment time is also an issue uh
permitting U both in the US and the EU
are is is quite an a significant let’s
say barrier and um in order to meet 2030
2040 demand and and targets I think uh
transmission needs to um investment in
transmission and distribution would need
to speed up in order to um to actually
have or to keep let’s say these targets
U uh in sight
uh Ben um you know Andre mentions cost I
think cost is you know in the US cost
alloc we call it cost allocation it’s
the it’s the chief barrier to expand
expanding transmission um in my opinion
that is uh in Europe you know cost
allocation Comes The Challenge around
this comes from different states having
different Visions for their own Energy
Futures um and that those different
Energy Futures include sort of Visions
for their industrial bases and and
policy can you can you just talk about
some of the I guess I would say
intra-european um tensions at play that
that make this challenging you know
across the various divides and member
states because I think it’s sort of easy
to think well we have European unity in
the face of you know Russian aggression
as it relates to some of the the
response over the last several decad
last several years you know where does
that what does that run up into when it
comes to something like uh a large scale
transmission build out sure thanks um
indeed I think for me that’s perhaps the
main challenge with the with
transmission buildout is it’s very clear
that building up transmission is a win
for Europe you know to net positive you
you need less capacity Less storage
lower deployment of Renewables but you
create winners and losers um and that’s
the challenge how how do you balance off
these tradeoffs a very concrete one is
is France um in the connection between
the Iberian Peninsula Spain Portugal
through through France into Germany gas
and electricity um and Spain is they
have the the biggest LG capacity in in
Europe and it was sitting there unused
for the whole of the crisis and no
progress was made um on the gas pipeline
from Spain through France to Germany I
think in the coming years the the
priority now is electricity not not not
so much the gas pipelines but again the
the connection from the Iberian
Peninsula into kind of the heart of
European Manufacturing in Germany
is is is Tiny and that’s I mean the
concern they’re going to deploy a lot of
solar a lot of wind in Spain there’s a
lot of abundant land resources and and
that’s going ahead and and there’s no
there’s no compromise being found here
on building out pipel which is a problem
and it will fragment Europe it will mean
that your industrial facilities you
should go to Spain if if if you’re an
energy intensive producer right now I
would be looking at Spain and trying to
make an agreement how I can get in there
very soon they’re going to have in many
hours of the year um abundant capacity
they’re going to have more soul and wind
than their demand is um so I think
that’s a big a big challenge um and and
in for France with the nuclear I mean
that’s that’s a big question for them
right I mean they sit in the middle and
if they kind of allow unfettered access
to their Market of renewable spiking and
going down every few hours what does
that mean for this plan of building out
another 20 gaw or so of nuclear that you
want to just be running constantly on on
Bas load um so there there’s a huge
problem there and it’s it’s at the top
of the political agenda in Europe I
think enri letter in his report and
Mario dragy again will emphasize it and
they’ll put it on the table of policy
makers um so Europe’s aware of it and
wants to do better but at the moment um
yeah we haven’t really got the solutions
um and just one more point to to throw
out which came from listening to Andre
is on um on the nature of electricity
tariffs and the fact that at the moment
we recoup costs for transmission but
also for things like contracts for
difference for building out Sol and wind
we recouped them onc bills and we
recruit them largely from households uh
so we exempt typically energy intensive
and companies from this this recruitment
of payments which made sense for many
years but now going forward we’re about
to put a carbon tax on households in
Europe um and we’re asking them to
switch to heat pumps to to to deploy
heat pumps and consume more and more
electricity yet at the same time as we
build out more transmission and more
Renewables we lump the the costs of
electricity on them which is a little
bit irrational and I mean one argument
we’re pushing is Shifting away uh from
electricity tariffs towards National
budgets and just general taxation to to
fund these kind of things um to remove
this this strange incentive
Behavior yeah that’s um deeply
challenging the the the sort of the the
the pile up of costs from what you know
at first glance might appear to be
different different projects different
priorities and they all the money
filters down somewhere and piles up on
cost Emily can you just sort of talk
about how you think you know National
policy makers sort of are responding to
that what are the what are what are they
facing and again how does that shape the
sort of the the the energy Union
possibilities yeah so there’s there’s
two sort of related challenges that
relate to financing that I think are are
quite concerning so the first is that as
you know as Europe is moving towards
clean energy technology it’s still a
reality that uh fossil fuels and
particularly liquidi natural gas are
going to remain the pillar of the
European Energy Mix for quite some time
so challenge there is when you are
saying to your investors we are going to
phase out natural gas by I think the I
think repower EU has some magic thinking
like 2030 not going to happen but saying
that’s going to happen how do you
convince investors to lay out large
Capital expenditures on infrastructure
for a fuel that you say we’re no longer
going to use or they’re going to be
banned right so that’s that’s a kind of
structural challenge that we haven’t
really figured out how to manage yet um
you know states are signing 15E long
deals for LG I think Germany just signed
one with the UAE the other day for
another 15 year long deal so these are
you know not short periods of time but
if you look at it in terms of energy
infrastructure that’s actually a pretty
short time Horizon I mean when companies
are building gas pipelines they’re
looking 30 40 50 60 years right to
recoup these sort of long-term
Investments and that’s why the European
system natural gas system of long-term
contracts sort of came into being was to
support the the structure of C Capital
expenditures on infrastructure so now
we’re looking at much shorter timelines
and industry has to figure out how do we
invest in these sorts of things knowing
that we have a much shorter time Horizon
now relatedly to that is that’s on the
that’s on the hydrocarbon side on the
other side we know that the EU needs to
incentivize clean energy technology well
that’s great how will it pay for the
Accelerated Green energy transition
there are many different projects um uh
there’s you know the eu’s Next
Generation EU which is this financing um
project which came out in 2021 it’s due
to expire in 2026 and that was basically
um a mix of Grants and Loans um for each
member state with the money raised
through joint EU debt um speaking to
what what um Ben was saying there’s some
disagreements among the states about if
they’d like to continue this right some
EU states don’t believe in public joint
financing and debt uh Germany for one
there are concerns by smaller states
that
this will mean that the bigger States
like France and Germany will have an
outsized voice if they are doing most of
the the fundraising but the challenge is
how is it going to pay for these things
there’s a lot of programs there’s a lot
of challenges but there’s not a lot of
money and particularly right now the
biggest challenge is that all of this
money that we want to earmark for the
clean energy transition is actually also
in demand for defense spending and in
this current atmosphere most of the
money is going to be allocated towards
defense in and so what happens to those
very lofty goals in terms of bringing
clean energy um technology production
and transmission to the continent so far
there’s not really a consensus on how uh
that’s going how that’s going to be paid
for Andre you you brought up this this
cost point I’m curious curious what you
think about sort of the some of the I
guess you talked about sort of
innovation in terms of how to how to
fund projects and I’m
curious uh from the in the utility space
how how what is the best sort of
solutions set to sort of figure out ways
to what solve what is essentially a
missing money problem you know I guess
that assumes probably that means in
attracting private private dollars into
the ecosystem so curious from the
utility perspective what that looks like
I’d love to give you one specific answer
but there’s no Silver Bullet I guess and
uh my fellow panelist I think they agree
with me there’s no Silver Bullet and we
have very different starting points when
come to member states and there’s also
not a secret Source if you want to keep
the analogy so uh there are very
different tools that we could use and we
should use but we need to look also and
and I think uh Ben was mentioning that
at the beginning at the political let’s
say context so over the past two years
Europe had quite a limited I would say
time to um put forward some adaptation
measures uh to deal with the crisis uh
what is next after this year after the
elections both in the EU and the us that
are important for the European Union uh
will basically put a framework uh
forward for what is coming in the next
few years and the next this next
commission will end its mandate uh just
a few months from the 2030 targets which
are some of them are quite ambitious and
I think that is the this is the moment
when we need to find the right uh
elements and the right tools to actually
Implement some of this uh uh policies
and this uh files that we put uh forward
now coming back to that um of course we
need to look into how to speed up
renewable generation while ensuring
reliability of Supply that is critical
and that is the conundrum that we need
to to look at but at the same time I
think it’s critical coming back to your
initial point it’s critical to look at
infrastructure whether or not
infrastructure is ready today to
accommodate for this transition whether
or not we will have a very fastpaced
transition towards renewable or not so
fast but still a transition towards
renewable that is important but I think
we need to have the backbone first and
that is where I think we are lacking or
lagging behind if you want uh in terms
of Investments and in terms of needs to
accommodate for this new let’s say
energy ecosystem that would include both
the uh uh intermittent generation as
well as a more flexible and more adapted
demand as well as some uh digital tools
and digital platforms that would somehow
unlock system efficiency so I still
think that grids is probably the number
one uh topic that we need to look at
both in terms of financing and in terms
of deployment let’s not forget uh we we
are not performing very well when it
comes to the lead time of deploying this
infrastructure so that is probably the
first the the the get-go let’s say
element that we need to take care of and
then look at the all the others that are
equally urgent of
course
um we’re we’re sort of we’re sort of
circling you know sort intra intra euu
intra-european challenges
um I I want to which I think is sort of
perhaps underappreciated as like a
source of geopolitical tensions um but
of course the traditional sort of
perspective is thinking Europe exposure
internationally and so I I want to just
shift that way you know we’ve talked
about the euus relationship Andre has
sort of really clearly mentioned the
importance of us LNG um I curious you
know first on maybe perhaps natural gas
but also electricity some of the the the
new corridors being opened up from
Europe I’m thinking in
particular uh to the south to North
North Africa to the Middle East to the
caucuses um you know what what should we
expect from those relationships uh Emily
I guess I throw this throw this to you
and and what are the the sort of the new
sources of risk that that invites uh and
that European policy makers need to
consider so I think the biggest
difference if we’re going to compare the
risk that Europe is is is sustaining now
in terms of dependency with these new
relationships as opposed to comparing it
to um it its relationship with Russia is
that um LG trade creates a very
different scent of different set of
factors in terms of dependence right so
one of the reasons why dependence was so
serious on Russia was because of these
long-term contracts and because it was
fixed pipeline infrastructure via land
that there wasn’t a lot of alternatives
for right like but we know now l& is
much more flexible right you have
infrastructure that can accommodate LG
from multiple different sources right so
the dependency on any one source now is
just not as great in terms of just the
just the number of suppliers or a lot
more but also just the physical
properties of of lmg is is totally
different so so the risk is a lot less
and we can’t look at it in terms of the
same sort of like traditional energy
security dependence that we thought
about with Russia in terms of natural
gas however that doesn’t mean that there
aren’t risks right so opening up to
increased Supply from let’s let’s just
take North Africa as an example well
North Africa as a source of of energy
has been problematic for a number of of
years because of the political the
serious political instability um uh that
that comes in some of these states I
mean we had you know some North African
States actually to stop exporting all
together because of political RIS and
that has not changed at all like that
has not been ameliorated in any any
meaningful sense then of course you have
um increased uh natural gas deals with
Middle Eastern suppliers there the
political risk is not as is inherent as
it in North Africa but there is
competition right so it’s one of the the
the things about the Russian natural gas
trade was yes there was a lot of
dependence but there also wasn’t
competition because Russia was taking
gas out of the ground and Russia put it
in a pipeline and sending it to Europe
now lmg can be traded all over the world
and so there is just a lot more there’s
a lot more buyers there’s a lot of
people wanting LG can go all around the
world and Europe will pay more for it
but it doesn’t mean that other people
don’t need it as much so it creates
other sort of negative externality one
of the kind of consequences of the
energy crisis was that Russia sorry that
Europe was paying so much more for
liquefied natural gas and that was
driving up prices so that non- premium
Asian markets could no longer afford to
pay for that and that has caused serious
energy crisises and say Pakistan which
still has rolling blackouts I think for
eight hours a day um Sri Lanka and
Bangladesh so there’s sort of
externalities that have changed the
dependencies have changed but there’s
still a lot of risk and problems
inherent with new
suppliers yeah you we should we should
sort of
uh keep in mind the way sort of
geopolitical considerations Cascade and
show up into in cious way sort of like
so like that has shifted the
relationship with Europe’s relationship
with the global South let’s say was like
sort of I think in many ways that those
exact sort of um examples have sort of
perhaps entered into the climate
conversation okay so now you want to get
together a cop and you want to talk
about climate well what you these
decisions on the energy side in an
energy crisis Cascade through and show
up into ways that are sort of like may
you wouldn’t expect and so important to
keep that in mind
um then uh there’s there’s another fuel
that we’re sort of I think Europe talks
a lot about I don’t know much about I’m
sort of unsure of and that would be
hydrogen it seems to be a new tool it’s
been characterized as a Swiss army knife
um what
what is Europe thinking about hydrogen
and I mean and and then it’s after that
I think maybe we’ll talk about the way
hydrogen interacts with natural gas but
just just characterize where how why and
how Europe’s thinking about
hydrogen um for those who follow
hydrogen I’m more in the kind of Michael
LIC uh ladder hyrogen ladder world so
that that frames my remarks um I mean so
in 2020 Europe launched uh its hydrogen
strategy and here hydrogen was really
about integrating electricity market so
balancing kind of the the two three
weeks of the year uh in the winter when
when you’ve got low renewable outputs
and doing things around the edges so um
helping to decarbonize the production of
fertilizers where where you certainly
need hydrogen potentially some transport
applications but very Niche where
potentially you know the size of battery
wouldn’t be able to do it that that’s
where we began in 2020 in
2022 um all of a sudden with the the
energy crisis in Russia’s Invasion the
European commission was pushed to
publish a document which Emily mentioned
the repower EU strategy and there they
were given the political mandate how can
we have no Russian gas by
2027 and they were given three weeks to
kind of write this document up and it’s
a team of like 10 people who we also
spoke with at the time and yeah they
were a bit
stressed and and there all of a certain
hydrogen took on a new role it wasn’t
just about decarbonizing around the
edges it was about molecule for molecule
replacing natural gas which in my view
is the wrong way to think about hydrogen
uh but that’s a little bit The Narrative
that developed and that’s I would say in
in policy circles a narrative that was
pushed on the ground in terms of actual
Investments I don’t think it’s something
reflected in reality I think hydrogen is
still progressing quite slowly in Europe
and we’re not really seeing a huge ramp
up of the sector um but so that’s a bit
where you the debate is stuck between
these two these two um end points of
replacing Russian natural gas or doing
things around the edges um and I think I
mean going back to the remarks I made at
the beginning on on manufactured
products for me with hydrogen that’s
another really big question for Europe
uh two of the the big thing it’s likely
going to make a lot of sense to do with
hydrogen is producing steel uh and
producing
fertilizers and I mean producing steel
to take that as one example that’s the
foundation of the European Union the
coal and Steel Community that’s where we
came from and do we want to try and
produce all of this clean hydrogen
recing in
progress to then um make steel or do we
accept that for example in in Australia
uh where you can produce green hydrogen
with lots of land very cheaply it’s
quite hard to put that on a ship and
send it to Europe as hydrogen it’s a lot
easier to make steel rods put them on a
ship and send them to Europe and
economically that would make our
decarbonization much easier uh but again
Dani your steel is made in Australia and
how do you feel about that in Europe so
for me that’s again the the question of
of hydrogen and just just to close and I
mentioned at the the beginning of this
ladder I mean there are those who think
hydrogen can heat our homes and can
drive our cars and I think increasingly
the consensus is that this doesn’t make
any sense and I’m quite firmly of the
belief that electrification is is
decarbonization in Europe and hydrogen
will be kind of a niche complement to
that so we can discuss you know energy
security of it but I don’t think it will
be at all comparable in relevance to to
gas today
well no I think it’s helpful and I think
it’s important to keep in mind the
context in which in which you know plans
are produced and um sort of Visions are
articulated and of course all
Technologies sort of go through the
cycle of sort of hype and then reality
and then and then true progress and I
think that’s probably what we’ll see in
hydrogen as well um it makes me happy to
hear that there are European experts uh
who are thinking like this um uh so you
know Europe’s future you’ve just you
you’ve characterized Europe as energy
poor um we’ve talked about the costs uh
you know energy security seems to have
improved through the through the
function of diversity at bare minimum
we’ve got increased diversity uh so
that’s that’s valuable um the the
long-term goal the long-term vision
seems to be electricity electrification
large scale electrification um and then
figuring out a way to supply that
electricity uh so I guess on on one side
I’m curious in the US we have this huge
conversation around electric demand
growth um and look looks like Andre is
back perfect timing Andre excellent work
um uh we have a huge conversation around
electric demand growth obviously Europe
has spent two years shedding demand uh
uh some of that might be sort of I guess
you might characterize as good demand
response uh you know effective P pricing
signals uh introducing Market mechanisms
by which consumers can sort of respond
to prices we like that that’s a good
demand response that creates a more
efficient system um but of course as you
mentioned there’s there’s been some bad
demand response it might be better
characterized as demand destruction long
term however um I guess I’ll ask Andre
this question you know what is how does
Europe think about like the scale of
demand growth that it electric demand
growth in particular that it might uh
that it might see over the the not next
year or the year following but the five
the 10 the 20e Strategic perspective on
electric demand growth and I think we’ll
all want to talk about okay how do we
serve electricity CU that’s that seems
to be the fundamental question um uh for
for for Europe 20 years from now uh how
do we how do we deliver this at volume
so Andre just just to start at least is
your thinking about electric demand
growth the way the way we’re kind of
worked up about this in the
US thank you very much uh great to be
back case in point infrastructure we
need infrastructure you know
communication energy we need it so um no
I I agree and I think uh looking at all
the scenarios that we are uh considering
at the moment electrification um will
grow and has to grow in order to uh stay
within the limits of 1.5 uh uh clate
targets for 2050 and we are seeing that
of course we are seeing what Ben was
mentioning some uh demand uh uh
decreasing in in industrial uh sectors
and that is not good obviously we are
seeing some demand that just responded
to to the price signal and invested in
some capacity in in improving and making
its demand more efficient more its
consumption more efficient but I think
looking forward we have no choice
basically uh um but to follow and to
focus on electricity when it comes to
Mobility when it comes to heating when
it comes to other U energy consumptions
and I think electrification to to Ben
point is actually one of the reasons why
hydrogen may not be a solution to
everything because Europe has I mean
even with this demand uh uh decrease
over the past few years Europe still has
at least in some regions uh a
electricity deficit we are trying to and
we are pushing for electrification
across our uh different let’s say uh
demand um energy options and for these
reasons probably hydrogen will not be a
solution in in in that sense we are
seeing that we are seeing demand in the
pre in the coming years uh picking up uh
I know in the US there’s a lot of demand
um um increase explained by the fact
that data centers are picking up once
again I think we will see that and we
continue to see that in Europe so we
have all the vectors all the ingredients
that will that indicate a an increas in
electrification demand the question is
how once again going back to my previous
Point how to serve them uh you know
through the current and existing
infrastructure and what we put in place
in order to um make up to offset the
supply that we are trying to decarbonize
in the next few
years so Emily I’ll go to you now
thinking about long-term strategic
perspective um where is Europe going to
get its electricity
from I mean and now I’d ask the same
question to Ben it Renewables seem to be
the the path gas is going to serve as a
balancing resource we’re going to need
to build transmission um is is is that
is that Division and therefore it’s it’s
just fundamentally a question of
deployment is that is the ability to
finance and permit and solve the
political battles associated with sort
of that Vision the the fundamental
energy security risk facing Europe yeah
I mean I think it’s part of it I think
we’ve talked about it earlier today is
yes we are Renewables is the way forward
in Europe I mean that’s already Europe
is producing a lot more of its
electricity via renewable energy and
that’s going to be the path forward with
obviously gas as a as a bridge fueld for
quite some time I think the question
remains how is Europe going to do that
in a competitive way right is it going
to be a leader in um producing the
technology for clean energy is it going
to remain competitive in doing that and
so right now you know the question is
how can we how can Europe compete Visa
the US and the IRA and and China um and
so I think that’s a challenge for
industrial policy and you know that’s
the that’s really sort of the question
on everybody’s mind this day for Europe
is Europe needs a serious industrial
policy that’s going to have some major
structural adjustments that I think are
going to be quite painful in a lot of
places we’re already sort of seeing
those structural adjustments and Ben was
mentioning earlier I mean there’s just a
there’s a manufacturing problem problem
in Europe and we were talking a little
bit before this panel you know if you
look at historically at when you start
to lose competitiveness in manufacturing
you lose jobs they go to places where
it’s cheaper to manufacture those don’t
come back those jobs they don’t return
generally so it’s an it’s a kind of
imperative right now to make the sort of
adjustments to stop those jobs from
leaving and to replace maybe some of the
heavy industry that was powered by Cheap
Russian gas for the last 40 50 years
with now changing those jobs to clean
energy Manu facturing but that’s a
challenge because the IRA has some
serious distortional effects uh the EU
knew about this immediately but is is
trying to sort of compete for this
challenge now but then also China and
then that gets you back to the circular
logic of the question now are we are we
sort of replacing this dependency now on
China for critical mineral production
and refining right and this is something
that the EU and the US are working very
hard at right now is trying to
understand the actual National Security
implications of dependency on on China
and other places for critical minerals
and this is not a question that’s
actually been very
well studied um I have manura Grant
right now that I’m working on this very
issue with and we’ve been we just ran
the second of our series of events last
week at UT Austin and we had a whole
bunch of folks from DOD and doe and
state and then private sector actors and
there is still no consensus actually
around what are the actual risks of
critical mineral Supply chains we don’t
know right we know the extent to which
China has a proportion of the
manufacturing of the production of the
refining chain but what ises that
actually mean in terms of our resilience
and resistance if there was going to be
for you know in in some sense a blockade
how else can we Source these kind of
places okay do we want to go to
Indonesia well what do their their laws
against export banss and their Chinese
involvement mean there’s just so many
layers of these questions we really
haven’t figured it out yet so I think
understanding actually what the
implications of that risk are and then
figuring out the extent to which we can
or will cooperate with China um is is a
huge question
um this is going to be an unplanned
question so I’m going to throw this to
Andre or Ben um we haven’t talked about
you know another tool in the toolkit
which is
nuclear um I think there’s always been
sort of Divergent visions of nuclear in
Europe I don’t think that’s going away
anytime soon um but I mean I think
there’s a lot of excitement about the
opportunities associate with smrs you’re
seeing certain countries let’s say
Poland uh really pursue this
aggressively France of course an
incumbent and sort of a leader in this
field um is is is nuclear a way out of
this sort of uh tension um and you know
what is the role of I guess I’d say sort
of European policy in terms of
facilitating this or is this going to be
and remain sort of a national level
issue I’ll thr this to you or Andre I’d
love to get your thoughts on on on the
Arc of nuclear in Europe maybe I go I’m
a nuclear engineer first so I’ll pass
this to to Ben maybe I’m a bit biased on
that so I’ll pass this to Ben okay well
no I want to hear your point but Ben
please please go first and then we’ll
we’ll hear from the engine I don’t plan
to say anything on nuclear specific I
leave that for for Andre I mean it it
will remain a national policy issue it’s
it’s not possible to get European
unanimity on on nuclear and it’s kind of
permissible environment but that’s
something that’s that’s hard so I think
this will remain a national issue where
some countries will pursue this
aggressively like France and others
won’t um and and I mean
it’s a slightly different but but my
question in Europe at the moment is and
I think it will come more with the
election is this this growing sense of
weird 8 n% of global emissions we’ve
done a lot to decarbonize why should we
keep doing it why should we introduce a
carbon tax and one of the things I think
is fascinating about Europe and Europe
can kind of provide to the world is this
laboratory of different decarbonization
Pathways um where you will have France
who will try and get a grid that’s 90%
nuclear R where you will get Germany who
will have no nuclear in the grid and
they’ll try and do kind of hydrogen or
natural gas CCS back up to Renewables
where you’ll have the countries around
the Alps who will have hydro storage
backing this up and all this this kind
of amalgamation of very different
electricity mixes obviously with
transmission capacity um but that’s one
thing where I I think it’s quite
exciting for Europe and whatever you
think about nuclear I I think it’s quite
exciting that at least a few countries
in Europe pursue this pathway and we’re
not we don’t only decarbonize in the
solar wind battery but we have this this
different thing which then provides to
countries around the world who for
whatever reason don’t deploy solo wind
at the same level a second option of
nuclear a third option of Hydra if they
happen to have the resources available
um and so for me that’s something
exciting about about Europe and kind of
a service Europe could do for the world
in shuring these different electricity
decarbonization Pathways yeah yeah uh
sort of security in diversity once again
shows up there uh yeah Andre please
sorry I’m pointing
but I don’t want to be a a story to but
I agree with Ben basically uh we have
very different starting points and I
think the nuclear industry speaks
volumes to how different member states
are uh across the EU but I think what is
different uh when it comes to the
nuclear sector when it comes to nuclear
generation what is very different is
that um there’s a the prerequisite to
deploy something is a sort of an
experience in that field it’s not
something that you can acquire just by
buying it’s something that you need to
basically Foster uh uh either domestic
or with your partner so that translates
into higher lead times I would say for
those that haven’t started or that don’t
have a a nuclear plan but I think uh
Ben’s point is is is correct and it
shows the diversity across the EU and it
shows the challenges and it shows how
Solutions coming from Brussels are not
Universal are not silver bullets and can
only uh provide some sort of benefits to
some countries and no benefits to others
so I think that’s you know the the
diversity of that is is actually both a
a pain point to some extent as well as a
a an advantage that the member states uh
have um okay so I’m going to open up the
questions if people want to talk about
electricity gas markets in Europe this
is this is your chance
uh I’ll start with sammer
please oh
Sam thank you great panel love the
discussion
um I am Ben I’m really curious bugal is
like right in the mix you guys are there
like in the weeds and you’re talking a
lot of people and this is a question I
was hoping nobody asked me but I’m going
to ask you um Russian gas it’s there
right and there’s a lot of Industry who
are who are near it you know uh do you
is there talk still amongst industry in
the region about a scenario in which you
turn the Taps back on I mean again the
pipes are there right so I’m I’m curious
what is the what is the energy what what
are The Vibes what are The Vibes over
there thanks thank you for the difficult
question and we’ll we’ll make sure all
the panelists can get in on this if they
if they dare to I W for think thanks so
the beauty is I I can I can say what I
want and it doesn’t matter
so no and I mean this morning the
conversation was that there’s no going
back
um I don’t think Europe’s about to turn
back and and this is isn’t based on
conversations with the industry but my
sense would be a little bit more
pessimistic I guess is the right word
that it might be possible um you know
Europe hasn’t introduced any sanctions
on natural gas uh which people forget
and and policy makers they say we
successfully transitioned away from
Russian natural gas we haven’t yet still
there and we didn’t um the nordstream 2
pipeline was blown up and Russia
demanded payments in Rubles that’s
largely what happened and why we don’t
have as much Russian natural gas in
Europe so there no sanctions and
something we’ve been calling for is that
I mean we should introduce sanctions
there should be kind of a maximum amount
of Russian natural gas and there should
be a European mechanism which says if we
want to keep importing this gas it goes
through this body at the European level
which says this is the maximum you can
have per year and there’s not any
political appetite for doing this um so
so not based on mean you’re asking if
I’ve heard from industry this I haven’t
heard from industry but I would share
the same opinion that the pipelines are
all still there the gas is really cheap
Russia can’t send that gas anywhere else
for now and the power of Siberia to
which which should connect those fields
to the it’s not happening and you would
think I mean You’ think with a crisis
they would have kind of expedited uh
constructions exactly so all the gas is
there it’s not so no I I see the same
risk and my sense would be that’s a
problem for signing long-term contracts
uh for LNG whether that be of the US or
Qatar is until you have kind of a
legally binding political thing that
says here we sign we will never Import
in the future more than x BCM of Russian
gas it will always be there um and in a
scenario of political change I don’t see
why it wouldn’t um play a role so I’ll
also jump in to say that there is still
Russian gas still flowing into Europe
today um it was just looking at
something which showed that I think
Italy is importing three times more
Russian gas today than it was in 2021 or
2022 something like figger like that so
it’s it’s still happening um I I I
should also always preface my remarks I
my remarks do not represent that of the
Department of Defense or NATO this mind
me speaking in my personal capacity as
an academic um I spent many years living
in Europe doing interviews um with uh
particularly in Berlin with uh
industrial consumers and their
relationship with gas prom and I spoke
recently with some of these um uh
industrial producers in Germany in
particular and they said that nothing
was ever off the
table um now of course these were the
industries that were most closely
associated with gas prom at the height I
mean would you know have lunch with with
gas fromom in Berlin you know three
times a week um but yeah I think that
when the rubber meets the road these
companies care about cost and they care
about remaining competitive and today’s
current energy environment means that
they are no longer competitive and so
that if there is still a permissive
environment that allows them to buy
Russian gas in a way that’s not
completely politically toxic for them I
think that they will do
that
Andre so also in my personal capacity
let’s say U I think yeah Russian gas is
still flowing so there’s still some gas
flowing through Ukraine right that will
land at the end of this year basically
the gas prone contract um at least this
is what we know at the moment and LG is
still Russian L gas is still flowing to
Europe as far as I remember the numbers
15% of it of the LG Import in Spain is
is Russian 13% in in France or something
like that so there there’s still Russian
gas flowing to Europe and it may one of
the next moves on the chess board from
from K Lin so yeah we need to take take
a look on what’s Happening next uh you
know before understanding whether or not
uh you know new contracts or new gas
will will uh will will come back to to
Europe from Russia yeah and I think Ben
your your your suggestion of you like
there are policy models perhaps to
manage this um in the future should that
future arise um any I’m going to open
the floor to any any final questions
here yeah uh almost all the discussion
today has focused on gas and
electricity uh with even one reference
to to LNG being seen as a as something
of a legacy fuel well what about a
dinosaur fuel I mean the war in Ukraine
has also disrupted Market in markets for
petroleum products uh most particularly
heavy
distillates uh can does anybody have
anything to say about
that not not in depth I mean uh during
the the crisis we looked gas and and
crude markets and the threat I mean
that’s crud not even distillates but the
threat from from Russian disruption um
and I mean before the Embargo on Russian
oil which is an area where the EU did
take action itself there was a big fear
in Europe not comparable to natural gas
but not not like orders of magnitude
lower than natural gas it was felt that
oil was almost as difficult to get off
as natural gas and okay again for crude
this maybe was a little bit harder but
for crude it wasn’t that hard with with
the ship trade you know Europe itself
was able to get our riing crude oil um
very quickly so I think that’s the I
mean the sense in Europe was probably
that for oil markets with the existence
of things like the Ia that Europe was
well prepared and was was well able to
to diversify from Russian supplies um
but on thiss particular I can’t really
comment wait we we got a
question thank Bob iort from the Atlant
Council um there’s been more discussion
in the US these days about the
implications of cbam and what it means
for the US um industry and trade um
and I I don’t know too much about it Al
it’s going to go into effect in early 26
what what does it mean in terms of
imports of energy uh domestic uh
industry operations prices
competitiveness
Etc you have Ben Andre Emily anybody who
would like to comment on
CBM I can take
it um so so the context is the the
European emissions trading system which
puts a carbon price on heavy industry
and for about 15 years we’ve had free
allowances so essentially your your
steel plants your ammonia plants we gave
them a carbon tax but we said here’s all
the permits for free and you can trade
them so we kind of created a market but
it was a bit of a false one and about
two or three years ago the this was the
introduction of cbam um was to try and
get rid of those free allowances um so
that so they would face the real
incidence of a carbon price that that’s
the birth of cbam
and I think that’s important to
understand because especially the
technocrats in Brussels really didn’t
intend this at all as a tariff barrier
as some kind of opposition and there’s
some in the commission like tiar baton
and others who kind of talk about we’re
going to use all these money and raise
all our own funds etc etc which I think
is very damaging to the position and
Europe hasn’t done a great job on on
communicating that we want to put a
carbon price on our heavy industry but
we can’t do that unless we have some
kind of protection at the border uh
otherwise they’ll just all move away um
so that that’s the context and what it
means I think it’s in my sense a bit
narrower Than People typically interpret
it I mean it’s very specific uh energy
and trade intensive Commodities things
like steel things like aluminium uh
things like ammonia where I
mean the uh production in countries who
don’t have a comparable carbon tax or
comparable something else which creates
huge complications with the states how
you some of the permits and and these
sort of things or the regulations here
how do you how do you translate that
into a carbon price so I don’t think
we’re very far along I think there’s
still a big challenge there um but for
the states my my sense is it shouldn’t
have you know assuming the states
maintains kind of a a similar trajectory
and decarbonization I wouldn’t have a
sense it will have a huge impact and
it’s more places like Indonesia or
Morocco with cold fired steel where
that’s really targeted at at having an
impact okay so that’s it for us um thank
you all for this wonderful discussion
and we’re going to have uh this we’re
going have another panel in a moment and
then one more at the end of the day on
Supply chains uh please uh welcome join
me in giving my panelist a round of
[Music]
applause uh and now we’re going to talk
talk more geopolitics uh than energy in
climate uh this is sort of the the guns
and bombs parts of the conversation
today um with me on on the panel uh I
have an excellent panel uh to my to my
far left is Ian ler who’s vice president
of GMS gmf of the global uh German
Marshall fund South and executive
director of the Brussels office uh Ian
is the the vice president there he’s
also served as the executive director of
the Brussels office and leads the
organization’s work on transatlantic
relations uh and the Mediterranean in
Turkey in his expertise includes US
foreign policy and European and Middle
Eastern security Affairs uh joining
above me is uh Charlie cupin uh
virtually uh Charlie is the is a senior
fellow at the Council on Foreign
Relations and a professor professor of
international Affairs at Georgetown
University uh he uh was from 2014 to
2017 uh he served as special assistant
to the president and senior director for
European Affairs on the National
Security Council in the Obama White
House and prior to that his career has
spanned the the Clinton Administration
National Security Council the policy
planning staff where I uh once served as
well at the state department and at
Princeton University uh and then uh
we’re also pleased to have Anna uh Anna
uh Bosa research staff member Science
and Technology policy Institute and the
institute for defense analyses uh she
prior to that she was a senior fellow at
Rice University’s Baker Institute where
she co-led the program on energy and
geopolitics in Eurasia uh and a senior
fellow at the kimman Center for Energy
policy at the University of Pennsylvania
and I forgot to introduce myself I am
Max Bergman I’m the director of the
Europe Russia Eurasia program uh and I
think this whole conversation that we’re
having today is I think uh really about
the fusion of the energy and climate uh
issues with the the harder National
Security uh defense topics that um we
often times uh engage in I was in
Ukraine a few weeks ago and one of the
most depressing aspects was actually
going to the energy Ministry and it’s
not simply that the Ukrainian grid is
being destroyed but it really hit me
that probably one of the most for
foremost e experts now on Russian
missiles and drones and the impacts that
they have is the energy Ministry that
has seen Uh Russian tactics techniques
and procedures evolve in how they are
striking uh Ukraine’s energy grid uh
this this war that’s now spanned after
over two years has also seen the the
explosion of of pipelines uh in Europe
uh and has really remade uh Europe’s uh
energy orientation some ways back to the
United States or toward the United
States but also to other regions and so
I think there’s a lot here to discuss uh
but Ian maybe I’ll start with you um you
are a keen Watcher on all things Europe
with your perch at gmf at at Brussels uh
so in the two years since the war have
you seen a real sort of paradigm shift
with how Europe views energy energy
issues energy security and how it views
essentially Russian energy to pick up on
a topic that we touched on at the last
panel Max thank you very much and thanks
very much for the invitation to be here
it’s a fascinating discussion I a c just
a couple of points maybe to about this
one is that uh you know as an American
sitting in Brussels uh you know this is
very much something I follow um this is
really a time of anxiety on all of these
fronts in Europe I mean it’s absolutely
palpable in Brussels uh and and there is
an interaction as you say between the
geopolitical anxiety the economic
anxiety the energy Supply anxiety the
competitiveness anxiety I mean and
you’ve heard that in various ways I
think from different speakers already uh
but they but they do interact with and I
would add even to that another anxiety
which is anxiety about us if I can say
about the United States and what’s
happening about what’s happening here um
I think you know just a couple of points
one is I think what you’re seeing now
really
underscores um the aspiration on the one
hand for strategic autonomy in different
fronts including in the energy sphere uh
in Europe uh and the gap between that
aspiration and what is actually possible
at least in the near term uh and expense
and the time that it would take to
actually get where Europe aspires to be
especially on defense but also in many
other sectors um there’s a huge gap
there um and and you see it underscored
in different ways and we’ve already
talked about some of that the second
point I’d make about that is that there
are some real there’s an there’s an
understanding that um that there are
structural shifts there are structural
Investments that or structural
preferences that Europe had historically
with regard to energy the head of the
international Atomic energ International
Energy agency the other day commented on
this that the the long-term choices that
Europe had made whether by Design or
simply by practice of Reliance on
Russian LG on the one hand and distaste
for nuclear in many places on the other
is has not served Europe well but to
reverse those structural choices is not
easy and not quick um and so I think
there is some again some anxiety about
this Al I think the green
transition is is now under stress it’s
in many ways been overtaken by a debate
about
competitiveness and surely these things
are not irreconcilable but they’re not
easily
reconcilable something you know that I
would also mention and it’s been
mentioned by a number of your speakers
is that um there has been a response to
this Supply insecurity with regard to
Russia that has reinforced north south
connections now you know that’s taken
many different forms in terms of
connectivity um whether you actually get
to a point where places like North
Africa and but also in southern Europe
are able to sort of fill this Renewables
to export renewable energy I mean it’s
been an aspiration for many many years
whether this actually creates the uh
sort of circumstances where it’s
possible you know we’ll see the final
you know maybe a final point if I if I
have a moment um and that I think there
is now um things are people are now
discussing things that would have been
Unthinkable a short while ago I mean
when Joseph Burell talks about the
possibility of a general war in
Europe um this is extraordinary um and
it doesn’t need to be by Design I think
there is a growing sense that as there’s
this open-ended quality this impass in
Ukraine um that the accumulated risk of
something simply going
wrong that leads Europe NATO into an
escalation that wasn’t necessarily
intended but nonetheless leads you
somewhere um is it’s it’s a very real
thing and of course if we think about
sort of the kinetic risks to energy
infrastructure and other things under
those conditions you have a very
different very very different situation
so you know and that could happen quite
quickly so you get on the one hand this
thinking about something at much greater
scale in terms of a problem and at speed
that no one wished to contemplate uh I
can say more about the American piece of
it and some other things we can come
back to let let me just follow up
quickly because you know one of the the
I think Hallmarks of the Biden
Administration and also with the
European commission has been the the
trade and Technology Council we actually
haven’t heard much about it today
because I think the the deliverables
that the tangible deliverables that have
come out of it um have have not been
maybe as ambitious as what was expected
or hoped for but do we have the right
level of ambition you mentioned Europe
pursuing it its own uh quotequote
strategic autonomy on the energy side
but it does strike me that we are in
some ways have a lot to cooperate over
here over the energy uh space that the
uh Europe’s turning to uslg is one
aspect of that but is there has the IRA
created opportunities for cooperation or
is it just created barriers uh and and
annoyance or should we increase our
level of ambition there uh between us
and and EU I I I think you know European
are keenly aware of the extent to which
they’re now Reliant not necessarily in a
negative way but anyway on on US Energy
exports by the way that’s a was Return
to a historic reality I mean until you
know the late 1940s that was the US role
was the leading energy supplier to
Europe and and so it’s not a new thing
for Europe to to experience that I think
in a bigger sense whether you’re talking
about Energy Technologies or many other
things I would be concerned about this
growing tension between economic
nationalism in many places actually on
the one hand and the desire the need
even for greater Alliance cohesion in
the face of what we’re we’re confronting
with Russia but also with China in a
different way you see this we’re talking
about Europe here but you can see this
with Japan too with the United States
that you how do you reconcile those
things and the T I think it’s one of the
reasons why the TTC hasn’t functioned
very well private sector is an enormous
stakeholder in this because so many of
the regulatory battles over whether
you’re talking about data privacy or
environmental regulations or many other
things uh are being made in
Brussels they’re being made in Brussels
and if we had ttip maybe we would have a
different kind of discourse about all of
this but we don’t we can’t talk about
ttip doesn’t doesn’t don’t talk about
ttip that’s the transatlantic uh trade
and investment partnership that that
died during the Obama Administration and
is everyone is afraid to bring it back
up but but Anna I want to bring uh bring
you in um you’re an expert on on uh
energy security and the geopolitics of
energy security how has the war impacted
Europe overall are is you know European
interaction not just with the United
States but other regions of the world
has has has been has increased maybe
with the with the Gulf States in
particular have you seen shifts or am I
kind of stretching some of what what may
happen how how would you assess how
Europe has has evolved from an energy
security perspective in the last couple
years um I think at first you should
probably underscore that Europe is not
as uniform as we might often think if
when we say in Europe right uh there’s
the UK versus EU but there’s also the
Western versus Eastern Europe um or the
post Soviet Europe which um in my view
has seen energy Security in particular
from the perspective of dependence on
Russia very differently than the west
and that has been a historical
perspective right the West has depended
on Russian gas over the Cold War and
nothing happened Germany was happily
receiving gas since 1970s despite
nuclear threats right so uh whereas uh
countries uh in uh central eastern
Europe have had uh experiences of gas
not flowing after 1990s when they sto
being under direct influence and that
influence had to be uh replaced by other
type of influences and that was uh in
some uh in some cases uh push for um uh
uh I mean basically uh using gas um as
geop political weapon sometimes oil um
uh as well but gas has been the easiest
one because it was so regionally um uh
focused um that changed with lmg of
course and um and central eastern Europe
has been talking about the issue of
being dependent on Russian gas um and
has been uh but to some extent it has
been this kind of you know the boy who
cries wolf uh because we’ve heard from
Poland all the time and from Lithuania
or laia don’t depend on Russian gas
something’s going to happen and nothing
was happening right so that kind of kept
being discounted as the LA as the years
progressed until it kind of came through
uh in uh in the second invasion I think
the first Invasion on Ukraine should
have been a wakeup call it hasn’t been
unfortunately um the second invasion
something had to change um
and I think
that was The Awakening that in the
Western Europe that energy security
matters still that’s not kind of the the
thing of the past uh that uh at some
some points you will have to use every
type of energy even if you don’t want to
admit it uh that you might have to
disassemble a wind farm to put a liite
mine like Germany did um whether or not
you’re going to be using it that that
will be up to up to the Future um and
and
um however I think what was happening at
uh in in reality um was accompanied by a
different type of message the message
was yes we have to do what we have to do
this is expediency we need to go uh and
uh create better future in terms of
cleaner energy and so on I think these
goals are there um now how they can be
reconciled it will depend on whether
Europe is able to create create this
energy security scenario where it’s not
only the accessibility and uh uh of
energy and and but also affordability of
it and and that’s what what what the
previous panel was talking about can
Europe be competitive um uh can Europe
be uh uh be the leader um to some extent
can Europe bring in the Clean Energy
Future somewhere else or what it will do
it will just discount the oil and gas
for other countries by using more
expensive energy um
itself Charlie I want to bring you in uh
you’ve been tracking uh the events uh in
Ukraine very closely the events in the
uh in in Moscow uh this strikes me as a
clear case where Russia uh at least uh
prior to the actual Invasion and then in
the aftermath of the initial Invasion
began to throttle its gas flows into
Europe uh and while it’s sort of unclear
what happened with the nordstream 1 and
two pipelines that energy was being used
as a as a geopolitical lever as a
foreign policy tool for Russia uh how do
how do you think that has fared and how
do you think the Kremlin sort of views
energy as a lever now as it sort of
looks back on on the the crisis and and
how do you what impact has that had on
on European uh thinking when it comes to
their own energy and National Security
Charlie you’re you’re
muted Thanks Max um wish I wish I could
be there uh in person but we’ll we’ll do
the best we can with remote um you know
I I think that the that the
Russians
overestimated the their ability to
weaponize
energy and underestimated
number one the nature and scope of the
European response and number two the
unity that has endured since February
2022 within Europe and across the
Atlantic and I think it’s understandable
why they overestimated the utility of
that weapon and the answerers Anna began
to talk about it which is until February
2022 it really didn’t look like the
Europeans took seriously
the Strategic vulnerabilities emerging
from energy dependence on Russia uh and
so the Russians saw what I think we
could call complacency on that front and
there was no complacency I think one of
the the more striking features of the
response that we saw emerge after the
Russian invasion in February of 2022 was
just how far and how quickly Europe has
gone to wean itself off of of Russian
energy yes there is there is still some
Russian fossil fuel flowing into EU
countries but there really has been just
a fundamental
transformation uh in where Europe gets
its its energy in a way that has dried
up the the dependence that we that we
saw before and I think on on all three
lines of effort not just the sanctions
but aiding Ukraine economically and
militarily and bolstering NATO’s Eastern
flank I I am still struck by how much
unity and solidarity there has been
within Europe and across the Atlantic
yeah there have been some bumps yes it
took a long time for our Congress to
approve the recent Aid package but the
bigger picture is is one of of striking
unity and solidarity that’s that’s the
good news the bad news is that when you
ask how effective
has Europe’s reorientation of its energy
supplies and the broader sanctions and
let’s let’s be frank here you know this
was the nuclear option we threw the book
at Russia we went much further in terms
of sanctions than I think the Biden
Administration intended but it hasn’t
really worked and the the Russian
economy is doing okay mainly because
Russia has simply moved its Supply
Chains It’s selling energy to the ch
Chinese to the Indians to others instead
of getting imports from Western Europe
they’re flowing in from turkey and
Georgia and Central Asia and so the idea
that somehow we were going to strangle
Russia
economically uh that didn’t work and I
think we can we some can draw some
important lessons there about just how
hard it is to sanction big countries in
a in a globalized world uh and that may
require us to think hard and long about
our policies toward China and the
efficacy in general of this kind of of
economic
isolation uh a couple quick other points
just to to end one is that I think the
implications uh of our inability to
really impose economic pain on Russia
are number one that you know Russia has
staying power that Russia’s population
its economy its defense indust Ral base
are
performing uh you know at a level that
that basically it requires us to say
time is not on Ukraine’s side and I
think we need to factor that in when we
uh when we plot our strategy for where
we go from here and the other important
implication I think is that to the
degree that there is a real loser in the
economic implications of the of the
sanctions it’s it’s it’s the global
South where we have seen energy
shortages High Energy prices food
shortages and that in part explains why
2third of the world effectively has not
taken sides and is not getting on board
when it comes to isolating Russia and
that that’s an important conclusion I
think to draw at a time when the US and
China are are attempting to get an upper
hand in in that part of the world my
final comment
I do think Max that despite the positive
things that I’ve said about
transatlantic unity and the
effectiveness of of sanctions and the
end of energy dependence I don’t think
we’ve spent enough time talking about
the long-term effects of those measures
on
us uh and if you were to say you know
what do I most worry about moving
forward it’s not Vladimir Putin it’s us
it is the impact of high energy prices
of German companies shutting down of
millions of Ukrainian refugees on
political moderation and ideological
centrism in our own
societies uh had we been on this call a
couple years ago I would have said thank
goodness the center is holding in
Continental Europe I wouldn’t make that
kind of statement today I don’t like the
political trends that I see in France
and Germany and I do think we need to
have a more forthright conversation
about how our policies toward Russia
toward the Ukraine war in general even
if working in the sense of helping
Ukraine defend itself maybe undermining
political centrism at
home let me uh follow up because there’s
one one area where we haven’t really
gone after uh and that’s really the
energy sector the Russian energy sector
as mention that there aren’t actually uh
sanctions against the Russian gas sector
it’s just uh European countries have
turned away from purchasing and and
pipelines were exploded uh but the oil
and gas with oil we have tried to put uh
essentially create a mechanism with the
Russian oil price cap to try to uh keep
Russian oil on the market to keep Global
prices oil prices low but to deprive
Russia of Revenue the administration
sort of defends uh the efficacy of this
measure I think many other experts would
say Well it hasn’t really impact uh how
much revenue is going to the Kremlin
um do you
think you know your last comments the
skepticism sanctions uh to I I I take
that on board but looking at the Russian
energy sector is that uh something that
do you think we’ll see oil sanctions
post an election if Biden were reelected
is that an area where if you were in the
white house where you know you’ve just
won a won a reelection this is assuming
a a a Biden victory that is Russian oil
on something that should be looked at or
is that too hard a lever to pull for the
for the United States and and West in
the west given concerns about political
moderation yeah I mean I’m going to
defer to to Anna and to Ian I think they
have more expertise on uh detailed
energy issues than I do but I would
respond in the following way Max and
it’s a it’s a very interesting question
uh I think that the you know the price
the cap has has to some extent worked to
some extent not the real the real
problem is that there are too many
buyers uh of relatively cheap Russian
energy to to in any way really put a a
serious clamp on sales and their for
income to the Russians and I’ll be you
know just very instrumental in in my
reply here you know if you’re in the
White House and you’re running for
reelection and you know that the
American electorate is probably
most concerned moving forward about
prices about the cost of living and you
know that perhaps the election could
turn on the price of gas at the pump uh
I think you’re going to You’re Going To
Tread very carefully even after the
election uh and I do think that yes
inflation has slowed down but uh you
know I don’t know about you Max but you
know when I go trundling off to Trader
Joe’s or Safeway to fill my fridge it’s
still bloody expensive for bread for
milk for eggs you know my at my local
gas station it was it was down in like
320 a few months ago it’s now close to
$4 uh if you’re a if you’re a politician
you are keeping a very very close eye on
that sign on Connecticut Avenue about
how much a gallon of G gas costs okay
thanks and maybe back o over to you on
that on that question um sure so um I
think you know sanctions work if they
everybody is on board if we have as uh
uh as johnney mentioned here if we have
other buyers willing to buy that um
because um for for cheaper price that
then the sanctions have an issue of
course uh now Russia has also devel a
considerable Shadow Fleet uh where
sanctions kind of don’t uh don’t
necessarily apply and that Fleet also is
traveling around the world and and
bringing in uh Russian Uh Russian oil um
and products now some of that fleet has
been purchased uh from European sellers
uh so there is also that or other type
of sellers uh so I think it’s it’s it’s
a it’s a very sanctions are very
difficult um I think to some extent they
will work uh it’s just a very long term
um and it’s very difficult to assess How
would how they work because you have to
basically compare it to
counterfactual what would have Russian
energy industry be in 10 years had there
been no war and no
sanctions um well uh probably better off
than it will be um H but then again
there are political versus economic
issues and um in at least in my view the
the the Russian government in particular
Vladimir Putin doesn’t care as much
about economy as much he cares about the
ideological Bend of whatever he wants to
achieve and um that’s what uh what
drives him um some of the assessment
I’ve heard about you know what will
Russian industry be because of sanctions
is well we’re not going to be as
efficient we maybe going to be at 70 80%
but we’ll still do fine uh because some
of that um some of the uh you know that
the uh the technology will bringing or
or any some uh you know uh uh resources
are going to be from China uh the
question also is um are we willing to
have Russia be a vessel state to China
considering how we consider China a
competitor to the West in general so
that’s also something that that we have
to kind of think about as we look
through um what type of uh effect the
sanctions have and how we imagine our
world particularly at the time where
where cooperation even within West is
not as easy as as as we would like it to
be yeah maybe over to you I mean my
understanding is the oil price cap kind
of came out of uh the administration
being shocked that Europe
was uh forging ahead on on sanctions on
the Russian oil industry and that caused
heart palpitations here in Washington
and then hence the L price cap mechanism
being sort of a a compromised solution
That Was Then negotiated throughout
2022 uh but how do you see this you know
going forward you know I think you have
to ask a fundamental question I think in
different ways we’ve all hinted at this
you know what did we want these
sanctions to
do uh and I mean in the most basic sense
we we wanted somehow to change Russian
policy uh on that basis at least so far
it’s failed uh now you could argue that
you could get to some threshold moment
both in terms of both operationally on
the ground and in terms of perhaps
economic costs where where this would
flip and you would see but you know I’m
not so sure I mean I I would agree very
much with what you said on it that you
know that that that that the whatever
his sort of ideological strategic
objectives versus about Ukraine just
simply Trump uh his concern about
sanctions in this sector but that’s not
the only thing sanctions do I mean
sanctions can be a vehicle for cohesion
among allies they can make you feel
better they
I’m no joke I mean this is there are
people who’ have done long studies about
the effectiveness of sanctions and you
know there’s a reason why they work best
with your
friends you know so um I think I’m a
little skeptical about that the leakage
point I think is very important that you
that you mentioned um another very
interesting thing in terms of
transatlantic relations on sanctions is
I think it’s quite striking the extent
to which the Biden Administration has
had the European Union as the
interlocutor on sanctions on export
controls um
that’s not necessarily an instinct that
would have been shared by well many
previous administrations of either party
actually um and and that’s been that’s
really noticed in Europe because in fact
you’re dealing in terms of energy and
also a lot of other rather politically
existential issues in in in Europe
including defense and and borders that
actually aren’t EU competencies
yeah it’s optional but we’ve chosen to
view the EU as an interlocutor in this
and and it’s been quite effective not in
terms of necessar the effect of the
sanctions but in terms of transatlantic
cohesion around the policy it’s been
quite effective uh I going to transition
to another subject but before I do have
to make a quick PL quick plug uh today
we actually came out with a new report
um at csas on uh looking at the impact
of sanctions on Russia’s defense
industry we did one last year it was
called out of stock this year it’s
called back in stock uh and and
essentially Russia has found a way
around s but really it’s been uh a huge
increase in dual use components that are
being exported by China the one thing
however not to to to put to remove my
moderator hat for a second I think the
sanctions Defenders would say and I
think I would agree with this is that
they do disrupt and so if you’re when we
talk about supply chain resilience and
Supply chains being really important
well when you’re trying to build when
you have factories that are humming and
you’re trying to do two and three shifts
uh you know run 24 hours a day that
machine tool breaks and then you need to
figure out how to get it and instead of
being able to go to the German supplier
which you used to be able to do you know
have to smuggle it well you can get it
but it may take time and cause a degree
of disruption which you know any little
bit of friction May uh May in some ways
have some some benefit but let me shift
gears because one of the topics that I
think came up uh earlier in some of our
discussions I think is quite relevant
and that is the the energy
infrastructure that in that Europe has
uh as not just being critical uh as we
often times describe it but as also a
potential Target uh and we have seen Uh
Russian ESPN efforts and and active
measures from assassination campaigns
through uh targeting uh Czech ammunition
uh Depot and after the after uh it’s
Russia’s invasion of
2014 uh and also critical infrastructure
uh uh things happening uh over the last
few years
uh and it worries me that we don’t seem
to now have a clear ability to deter
these actions because we have sanctioned
Russia endlessly we have put a a
diplomatic isolation uh against Russia
there’s very few tools that we have
short of kind of military kinetic
threats uh now to I think deter some of
the more concerning kinetic actions I’m
curious how you see this this challenge
this threat maybe Charlie maybe I’ll
I’ll start with you and then then go go
backwards to the
panelist yeah I mean it’s a it’s a very
interesting question Max in the sense
that we do seem now to be heading
into uh an era in which both kinetic
Warfare and hybrid Warfare does entail
these kinds of efforts to disrupt
critical
infrastructure uh I mean if you look at
what what the Russians are doing in
Ukraine particularly in the absence
of American air defense systems you know
they’re they’re pounding infrastructure
uh they’re trying to disrupt the energy
uh flow the water flow uh and they’re
being reasonably successful in ways that
will take a significant toll on
Ukraine’s ability to
resist uh and to some extent we’ve seen
similar activities by Israel in Gaza
degrading uh core infrastructure uh and
so it does seem to be coming to be be
becoming more of a a kind of standard go
after Target in in kinetic Warfare and
at the same time uh it looks like it’s
also an increasingly attractive Target
in in non-kinetic scenarios where we
have seen
disruptions uh of energy infrastructure
in in Europe and we’re also hearing
about Chinese Andor Russian Andor
Iranian
efforts to implant ma malware in US
critical infrastructure whether it’s the
pipeline I think we had one instance in
which there was a disruption in in
pipelines but it could be in the in the
energy grid uh and and and maybe we’re
doing the same thing maybe we’re
planting mware in Iran in russan I I
don’t know uh but I do think that that
this is a in some ways a an understudied
underappreciated Dimension that we ought
to we ought to be paying more attention
to Anna curious for your thoughts being
from Poland there’s been lots of
activities that the polls themselves are
are reporting on of of Russian activity
against um against infrastructure
throughout Poland but also uh but the
energy infrastructure being being
particular concern right no absolutely
and it’s uh it’s it’s it’s not new the
energy infrastructure has been um
earlier in more nuanced way uh uh
affected by by by by Russian at some
point I think the uh oil for example
that Russia was flowing to Europe uh it
was flowing it at the Quality that
polish refineries couldn’t refine it but
the Germans could right so there’s
there’s different ways in which things
can be H can can be affected including
infrastructures like refineries uh and
um and today we see uh the attacks on
generate generators um uh gas pipelines
although not the trunk pipeline that
flows Russian gas still uh to to Europe
Austria or Slovakia through Ukraine
through Ukraine absolutely uh that has
not been uh bombed uh although the
others one uh that flow would have flown
gas um to to the local population or the
storage recently has been has been
attacked but what it
predominantly should give us uh kind of
should should should make us think of is
well what can we do to prevent uh uh
these attacks and one thing to do to
prevent is to prepare for them so they
don’t have the effect that they that
that the attacker intense so they don’t
uh prevent the flow of energy and or at
least not uh uh that can be um or at
least that we can fix it really really
quickly so how do we design our our uh
energy systems uh one thing that I think
of um you know what are we going to do
if we Electrify everything are we going
to be more resilient or are we going to
be more exposed if so how how can we
make sure that by attacking our grid we
are not turning off everything that we
basically uh uh use to live um so heat
water and so on and our cars and so on
and so on so as we I think you know
there is little that we can do right now
um probably immediately but thinking
about designing um our Energy Future
that’s extremely import
important well I you know it just puts
me in mind of the comment that was made
in an earlier session about you know
being one click away from a very very
big problem uh as a result of this I
mean of course I mean I think it’s also
worth you know thinking about the fact
that this these are very old strategies
I mean since the dawn of the Industrial
Revolution people have been thinking of
ways to
of economic Warfare in this respect and
if there’s a lesson from all of that it
seems to me is that given enough time
and and you know enough Focus you can
fix almost anything uh money to you know
and and if you’re willing to devote the
resources and shift the economy around
in such a way that you that you’re going
to fix it I and there’s a lot of
capacity for adaptation it’s arguably
grown uh maybe even exponentially in in
recent years as as the sort of
intellectual inputs and the
technological inputs as opposed to the
resource inputs have become much more
important um so I wouldn’t you know sort
of overestimate our our
vulnerability um but you know clearly
it’s something worth watching not least
because you know I think we see with
Putin in various respects whether we’re
talking about the kinetic piece of this
or other things you know just factoring
this element of ruthlessness which even
during the Cold War frankly we never
really had a a kind of you know element
in the nuclear balance called
ruthlessness if anything we had the
opposite which was a degree of caution
um and and that we don’t see now and
then it could get much more complex
because of the use of proxies who carry
out these kinds of attacks I mean in
some ways what we’re seeing in the Red
Sea may be more instructive for what
we’re talking about than the
consequences of what’s happening between
Russia or as consequential as in terms
of
lessons Charlie it seems like part of
what we’re talking about is building a
degree of resilience and treating the
energy sector or potentially treating
the energy sector more uh as kind of as
not just a national security priority I
think we would all agree that a national
security priority but you know part of
what the militaries do is do ton of
planning about what events could go
wrong and they stockpile weapons
hopefully never to use th those weapons
they’re essentially you know hopefully a
stranded asset but do we need to maybe
think a little bit more about the energy
sector in similar ways to try to boost
our resilience having Transformers
having generators having other equipment
that perhaps uh uh solar panels that
could be uh brought for hospitals to
maintain energy infrastructure this need
to be part of our kind of deterrent
strategy effectively so that no
adversary will even bother trying to hit
our energy infrastructure because it
would make no point there would be no
point to doing so is that something that
we need to start doing or am I kind of
overhyping some of the the threats or
concerns
you’re you’re muted
Charlie uh no I don’t I don’t think
you’re overhyping Max I I think that
given what what we’re witnessing taking
place in Ukraine in Europe we do need to
build in redundancy we need to have you
know pipelines that uh that may not be
essential because the existing one is
adequate but you put in a second one
just in case something happens uh so I
do think that that Prudence does require
moving in this direction and I thought
Anna asked a good question you know if
we if we Electrify if all of our
transportation is based upon batteries
in charging what are the implications
for that does that does that make it
easier or harder to to disrupt uh but I
I don’t think that it’s just a question
of building in redundancy and and
resilience
there are a whole host of issues that I
I also think we need to to think long
and hard about trying to forge a set of
rules of the road and here I’m not just
talking about attacks on energy I’m
talking about cyber War the the
different uses of uh of cyber tools to
disrupt uh civilian Society you know
there’s this whole new realm out there
where you know we don’t even have our
own guidance system we don’t have our
own rules of the road you know we don’t
have our own legislation Congress has
yet to pass a single piece of
legislation on regulating the digital
Arena U and so I think that is another
area where we have to develop our own
set of uh of guiding rules and norms and
try to socialize them first with allies
but not just with allies also with
adversaries I think it’s a great great
point I want to move to questions from
the audience in a minute but before I do
so everyone think about their questions
uh Anna any any comments on on Charlie’s
point I mean look there are people in
the room who know a lot more about this
than I do but I would have thought that
the more the more diversification the
more distribution you have in terms of
critical infrastructure the better that
and if it if you get that with for
example increasing Reliance on
Renewables or or distributed generation
or whatever it might be uh it just gives
you much more resilience and redundancy
I would have thought uh than having uh
you know less sophisticated grids that
that are centralized and and and all the
rest of it I me I mean it also has
there’s something to say here about the
nuclear power industry too and there are
people who know a lot about that and I I
don’t yeah but and maybe I’ll just go to
you on the threat it how how serious do
you think the threat is essentially to
Europe’s energy infrastru structure uh
from from Russia presently is this
something that you should be concerned
about should not be concerned about
should be overly concerned about how I
mean how panicked or not should well
there’s a lot of things that Europe has
to be concerned about it so Panic is
probably not the best idea uh otherwise
they would just we you know uh um really
in trouble uh but um there has to be
concern we’ve seen
explosions in the Baltic Sea we’ve seen
a Baltic interconnector being disrupted
by an anchor and some of uh of uh cables
underwater cables uh that that had also
been cut um now we don’t know
uh what force has done that there are
different theories and and different
opinions on that but doesn’t matter who
has done uh uh who who who who has done
the actions these need to be uh
considered and um uh having most of the
gas that goes to or all of the gas that
goes uh from Russia to Germany being cut
off that that’s an that’s an issue that
uh Germany was lucky to be able to deal
with uh based on its uh its associations
with other uh other countries in Europe
uh so I think it has to be one an
important part of energy policy uh now
as it was mentioned energy policy is not
in the preview of per perview of of EU
it’s actually depends on each and single
country and and that’s and that’s an
issue because every country in Europe
has a different idea of how that energy
security should look like um Germany
doesn’t like a nuclear power uh to be in
uh Poland is introducing nuclear power
right on the border of Germany um France
is building it up back of uh its nuclear
power power so um you know Spain has a
huge amount of LG import terminals but
doesn’t have a way of connecting it to
the rest of the of of Europe so it’s not
able to bring it and France is not
seeing like uh seeing this you know the
same uh need for for for pipelines so uh
I think while the solidarity between
different European countries has existed
in the in the face of threat there is a
need for more of it it so the threats
like uh threats to energy infrastructure
can be addressed great well let me see
if there’s any questions for the
panelists if not I’ll ask one more any
any questions for for our panelists yes
please I’m Bob Hershey I’m a consultant
uh from the things that the US and
Europe are doing now would you keep them
doing the same thing or you do something
different
great question
in tough question question extremely
difficult it’s extremely difficult to
answer I mean I I think look there are
there are you have to make some
long-term assumptions and you have to
hope that they’re well informed and
correct because we’re talking about
policies and Investments and decisions
that are not only very expensive but
very consequential over time and very
difficult to reverse and uh and so you
need to make some
some decent assumptions about the
long-term relationship with Russia also
with China we’re not so much talking
about that and some other things and
across the Atlantic because if some of
those big picture variables are changed
are different the decisions that you
would make on some of these questions
that we’re discussing would look very
different if you don’t trust the us as a
supplier you’re going to go in a
different direction if you think that
you’re going to wind up in a kinetic war
between NATO and Russia you’re going to
make some choices about uh resilience of
your infrastructure that you might might
not make otherwise because you do as we
were saying before we started this
session have people in industry but not
just in Germany but not just who are who
are just waiting for this thing to get
settled so they can go back to a nice
house politique and some relatively
secure cheap energy from Russia and and
Away you go
um we have elections coming up which
will influence some of this stuff too
so and
Charlie let me actually just pick up on
the last the point Ian made to to ask uh
our panelist do you see a scenario or
scenarios in which Europe turns back to
purchasing the stranded Russian gas that
is sitting there and if so what would
have to happen because I I think in the
present State I do not see a scenario in
which that happen or do not see that
happening but I could Envision future
scenarios in which a lot changes but I’m
curious how how how you well Austria is
still buying of Russian gas like 100% of
its use at times right Slovakia the same
so as as the previous panelist mentioned
uh Europe has not sanctioned Russian gas
it’s Russia sanctioned it Gast against
some countries like Poland or Bulgaria
for example um but um Europe hasn’t so
that’s one indication if there is a need
there’s a will right uh however I think
uh the situation has changed uh so if at
any given point Russia will there will
be situation where Russia is able to uh
to trade back with Europe uh H and it
could be Russian gas potentially or um
as some maybe hydrogen uh blue hydrogen
that Russia is encouraging its companies
to uh to produce um then the idea would
be that this Russian gas cannot at any
given point become a weapon MH right so
uh and this was not the case um and
written before that uh uh you know how
do you do this well you have enough
redundancy you have enough suppliers so
at any given time you can replace the
gas that’s coming from Russia with some
uh with with something else electricity
gas whatever else it is uh so Russia
doesn’t have that that card right so it
cannot play that card anymore and then
it becomes the normal supplier uh that
everybody else is um if that’s the case
I mean do we really want to have this
compl completely unfunctional huge
country on the on the European border
that potentially as I’ve mentioned is a
vessel to a vessel state to China and uh
I mean probably it’s a it’s an issue uh
so um it’s a very it will require a huge
amount of careful consideration um but
yeah okay I would just add Max that
please I think the you know if you look
at the likely outcomes in
Ukraine most of them involve some kind
of Frozen conflict or semi Frozen
conflict with Russia keeping grab of at
least some chunk of Ukrainian territory
for for a while and it’s hard for me to
imagine that under those
circumstances you could ever get the us
or the EU to seriously scale back
sanctions so I other than you know a
change of regime in Russia Putin is gone
there is some new regime that that is a
very of a very different ilk I don’t I
don’t see that return to
normaly uh I think that one of the
questions that that this analysis begs
is can we keep the sanctions in
effectively have no serious economic
relationship with Russia but still at
some point deal with
issues that we need to deal with them on
like strategic stability like nuclear
arms control uh like uh you know things
to prevent a a wider conflict between
NATO and Russia uh but given where we
are in in Ukraine I think any return to
economic normaly is far off in the
future this is a kind of microcosm of
the debate over der risking with
China in a sense I mean it’s slightly
different but not entirely you know um
you do you want to do you want to even
if we don’t there’s a lot that we can
complain about and a lot that we don’t
you know don’t want to excuse um I I
agree with Charlie about the the near
maybe to medium term but over the longer
term I mean is it a safer world if you
have no economic interdependence and uh
completely free floating relationship
when it comes to strategic stability
nuclear understandings about nuclear
strategy all of this probably not um so
you know over longer term can you simply
ignore this relationship again probably
not and I think a lot in more than in
the United States a lot in in Germany
many other places in Europe even in
France despite the toughening of
attitudes uh are are looking ahead to
that because there’s a long history
there there’s a long history there no I
I I completely agree and I think that
the uh looking down the road I mean Arms
Control between the US and Russia is
currently uh on dead it’s currently dead
it’s not even on life support however uh
can be as soon as there’s potential for
um negotiations if there is potential
for negotiations Arms Control gets
resurrected because that is the the
foundation for which you have these
sorts of conversations and at that point
then if you are on a road to building a
more stable relationship than the energy
side I think down that road could could
potentially be a topic but there’s a
long path uh I I think to to head on
head head in that direction so uh but
with that um I we’ll take uh hands
popped up in the last second we have a
few more minutes uh
Amy we we take two question primarily
for Charley but also maybe Ian if he’s
will to answer it which is where do you
think we stand in terms of deterrence
has the United States lost its ability
to create a deterrence internationally
do we we have a deterrent do you see we
have an active deterrence uh in the
balance with the with Russia and did you
see the exchange between Israel and Iran
directly as a manifestation of the fact
that the United States Global deterrence
is faltering or you think that’s too
pessimistic why don’t we take the the
second
question thank you um we we’ve talked
about the um uh Europe uh
diversification of gas in terms of LG
shifts um I I think there’s still an
issue though with regards to the nature
of that diversification strategy and it
relates to the fact that the West has
put a tremendous amount of effort in
developing the southern gas
Corridor and uh and the plans are to
expand that Corridor and to increase
supplies from
aaban which of course ALS also runs the
risk of in a sense Russia’s actions in
Georgia and in the future and what that
might mean for security of those
supplies as well as the issues related
to what to do about Turk stream and
Russia’s control over Turk scream which
is important in terms of their leverage
over Serbia and Hungary so I was
wondering in in that context do you have
any sort of thoughts about that aspect
of diversification and uh how important
it is to continue down that route uh and
is there anything we can do about Turk
stream in Turkey yeah great great
questions and we will Charlie we’ll
start with you and we’ll go through or
uh with each panelist and I encourage
everyone to be brief so we can stay on
schedule so
Charlie yeah to the question about
deterrence I think the American
deterrent is in pretty good shape for
for the following several reasons one is
that I think the policy toward Ukraine
has been about right in the sense that
Biden made the Judgment early on that
Ukraine was not worth World War III and
that we were therefore not going to go
to war with Russia or enforce a noly
zone or do other things that would put
US forces in direct conflict with
Russian forces but we’ve gone pretty far
in helping Ukraine defend itself uh the
country still holds 80 plus per of its
territory and I’m guessing now that more
Aid is going to arrive it will be able
to to hold the line you’ve got NATO two
new members a lot more Firepower and
capability on the Eastern flank I think
that the Chinese have been watching
what’s happened to Russia for invading
Ukraine and they don’t like that story
they don’t want to go down that rabbit
hole I think the response uh of the West
to the Russian invasion of Ukraine makes
a Chinese attack against Taiwan less
like
and the Biden administration’s efforts
to tighten the alliance system South
Korea Japan the Philippines Aus deal
with
Australia I would say that that uh bit
broader extended deterrence is in is in
pretty good
shape I’ll defer on the energy questions
to Anna and
Ian uh
I think the diversification is is is
progressing as I said yes the the
Turkish stream is working full for
throttle uh and uh the AER gas is
Flowing as well there has been a push
from the European Union to bring more of
that gas uh but the question is uh is a
question of financing additional
pipelines and building them and for
aeran to do it it would have to have the
assurance that that gas is going to
be sold for a you know and bought for
long long time to be uh whereas European
Union’s uh policies are such that they
want to you know uh uh have this only as
transitional fuel so there is this
disconnect uh probably European Union
would have to uh Finance most if not all
of it in order for this to happen um
that I guess remains to be seen although
thanks to a relatively successful kind
of last two years of no serious energy
crisis it it seems to me less likely
than it was at the very beginning when
Europe signed several agreements with
with
aeran um there’s also the issue of
potentially uh leaking of Russian gas
through through other sources including
through aeran who just signed a contract
for one BCM of gas with Russia right so
it’s a matter of displacement uh so
these things these things uh these
things uh these things could happen
however there are serious uh um uh off
uh diversification uh efforts uh the
Kirk terminal that’s expanding with
Hungary bringing in uh quite a lot of
that degasified uh uh deified uh uh fuel
uh uh to its borders um as well as the
Greek terminal uh and then increasing
interconnections uh both in terms of
electricity as well as gas
interconnections between different
countries so Poland Ukraine Poland
Slovakia um uh and and uh Lithuania
actually has been just uh connected with
with Poland through the uh uh through
pipeline which is like the first
connection on uh um on land connection
between the Baltic republics and and the
rest of Europe uh with gas so that’s
that’s important uh and that the
interconnections will help
diversification because it will help
balance the system so you don’t have to
have as much of gas but you can move it
uh around
maybe just a last thought on the
deterrence question uh you know I I I
would agree with Charlie that I think
overall as a kind of net assessment that
that we’re still in a relatively we the
West if You’ like to say nato is still
in a relatively strong position when it
comes to deterrence if you’re thinking
about deterrence in terms of deterring a
direct
Russian
uh threat to Nato territory beyond the
war in Ukraine if you like or even
thinking about it in terms of of the
situation in Ukraine perhaps but
certainly in terms of a further
territorial threat to Europe I you know
I I find that that pretty pretty hard to
contemplate I think I think he is
deterred in that sense what I do worry
about two other things I worry about
things going wrong as I said earlier uh
inadvertent escalation miscalculations
accidents and the longer the conflict
goes on the accumulated risk of this it
seems to me is very significant uh
includ you know directly implicating
NATO um the other piece about it is that
as this goes on uh we know less and less
about Russian intentions we’re not
learning more the the the questions are
just piling up and I have to assume not
that we’re trying to be mysterious that
who knows he may have the same feeling
about us you know during the Cold War we
knew very well we had a very good
understanding about what was stabilizing
and what was destabilizing we may not
have agreed about the outcome we wanted
in the world but there were no Mysteries
there really uh and now we have lots of
mysteries and lots of potential for
miscalculation and and I would worry
about that more than the the
fundamentals of of deterrence although
again we never really priced in
ruthlessness as an element to deterrence
and that’s clearly what we confront
today well I really uh want to want to
thank you all I think it was a
fascinating conversation uh as someone
who’s been in Washington for 20 years if
this conversation happened 20 years ago
I think we’ve been fixated on on the
Middle East on on Gulf oil and I think
it sort of demonstrates how the
conversation has really uh evolved when
it comes to energy security and
geopolitics uh but please join me in in
thanking our our
[Applause]
panelists and we will be taking a a
short break as we transition and then
we’ll be back for our final uh panel on
uh Supply chains
[Music]
all right uh welcome back everyone again
I’m Joseph mik I’m the director of the
energy security and climate program here
at csis I’m very excited to round out uh
what has been an incredible day we’re
going from the energy RI the risks
associated with uh cyber security and
EVS to the nature of the US’s deterrent
power in its relationship with Russia
we’ve we’ve covered a lot of ground and
on on this last panel I think we want to
start talking talking about the one of
the key Concepts that we heard right at
the start of the day right the story of
the last two years in Europe has been uh
a shift toward Renewables is seen as a
way off of Russian gas dependence uh
there is concern held by many that you
then kind of trade one dependence for
another right especially given Supply CH
chain supply chain concentration in
China with respect to a lot of the goods
of of the clean energy economy and so
I’ve got three people here to talk about
that issue how real those risks are and
what we can actually do about them in a
practical and economical way um and
we’re I’m really we’re all going to
benefit from their expertise directly to
my left is Roger Martella he’s the chief
sustainability officer at General
Electric vnova
uh and and Roger has a long and story
career as a general counsel at the usepa
and the doj and um and he’s got I think
a lot to share with us on this kind of
nature of what these Supply chains are
going to look like in the future future
Andrew Wills is the senior vice
president for federal Affairs at
invenergy a large Energy company with a
with a global pre footprint um Andrew’s
also bringing a lot of uh is bringing
prior government experience he was the
chief of staff for cyber security energy
security and emergency response at the
US doe until just about a year ago is
that correct that’s right great so I’m
very excited to hear your thoughts on
this in this regard and then Elena jopu
is the uh Chief strategy offer at bpc um
Elena’s got a long career working at a
Europe in the energy finance and
Analysis space including stint at BF um
so thank you all for joining us I want
to actually start with Al Lena and then
we’re going to work our way this way um
trading one dependence for another from
the perspective of a utility how how
should public policy makers and analysts
think about the the risks that you guys
see and what you’re planning for in the
medium-term and the long term with
respect to sort of the the shifting
nature of of Supply chains and the
shifting Energy
Mix uh first of all thank you for for
the question it’s exciting to to hear
everything that has been said earlier on
um there is let me start with energy
Security in the sense that the system is
changing it was said everyone knows that
we move from a fuel based system to a
Technology based one but this change is
not happening overnight in the sense
that you need to manage the the risks
and the complexities both of a fuel
based system because we are still using
fossil fuels and as we are planning our
transition to a Technology based one
where materials equipment manufacturing
uh capacity critical raw materials are
key um in this sense
we all right okay okay okay good um as a
utility of course we are trying to
diversify our portfolio we are trying
both in terms of Technologies and in
terms of geographies because there is a
lot of complimentarity that we can
leverage if we operate in different
systems and of course this has a big
impact on the energy security of a
country and the region like Europe um
but at the same time what is very very
important for us to understand is how
there is stability in the region in
order to make sure that a we have access
to the equipment and we are not going
experience a similar situation uh at a
very high cost that we experienced in 20
uh 22 and secondly that there are the
economic signals on the market that will
keep us going uh with our investments
that will contribute to the Net Zero uh
transition that Europe has set as as a
Target so um let’s let’s jump to Andrew
Andrew you know you were looking at the
sort of this security of supply for the
us when you were at the doe now you’re
working in in in the private sector how
do you rate these different things our
conversation today has gone from sort of
like availability of materials in the
critical mineral space to the the the
the sort of mechanisms necessary for
clean energy to then cyber security
where where do you kind of see the
emerging definition of energy security
going yeah At Doe thanks for the
question um At Doe we spent a lot of
time thinking about how do you define
energy security because it really could
be all things which you just said it it
is all things uh but you can also try to
PVE a narrow a path it reminds me when
we were talking about the term
resiliency what does resiliency mean and
who owns it it’s kind of hard to
describe about what it is and I think
the same thing is true for energy
security we at inv energy I think um for
those of you who don’t know and I didn’t
see this morning uh we’re a clean energy
developer owner and operator based in
Chicago uh we’re definitely the the US’s
largest and probably the world’s largest
private Clean Energy company and I think
our owner Michael psky has done a good
job at following where this is needed
following where there’s a demand
following the market signals uh you know
when he built the company in in the
early 2000s it was perpa had just
changed the markets and so we were
building gas and then the credits came
along and he was building wind and now
we’re at a place where we really have to
look at sort of all the above and so
that’s what we’re doing we have gas
assets and right now here domestically
we’re really focusing on getting power
from where we have it which is as we all
know uh for Renewables usually in rural
areas where there’s not a lot of people
to where we need it so we’re focused on
longdistance high voltage direct current
transmission um to to your question from
The Experience At Doe I I I don’t even
want to try to to uh quantify or qualify
risks I think they’re all important and
I think we have to be paying attention
to all of them at the same time um and
then let’s come to Roger and you know
vova is it GE or vnova GE vnova GE vnova
is is you know there equipment supply
right so you know a lot of the political
narrative is we can we move to a world
of wind and solar the resources are
right here the supply chain is like very
very short uh but that’s perhaps a
hollow uh transition if you don’t have
the ability to have the inverters the
wind turbines the Nels all of the all
the equipment necessary to scale up that
clean energy economy you know G’s G’s in
the space like what what do you see as
you know government activity in in with
regard to these risks are they well
characterized and then how do we resolve
them economically well Joseph first of
all thanks for hosting us and inviting
us and having this critical conversation
at this critical time and I I guess
there’s two things so gnova is a company
that innovates the technology that helps
produce 30% of the world’s energy right
very Diversified renewable energy
conventional power grid equipment and
then breakthrough Technologies like
small modulor reactors carbon C capture
hydrogen so we’re kind of in the whole
supply chain in in over 100 countries
30% of the world’s energy 880,000
employees and I guess maybe two things
I’d say I I think one thing about energy
security frankly I wish we didn’t have
to be here have a conversation on energy
security I think we’d all prefer that
well
but but um but it has driven I think a
return to pragmatism when it comes to
the grid and power a few years ago was
like picking winners and losers and we
didn’t like that we were very much on
the record like we think it’s still all
of the above um and I think we’ve seen
as a result of the the focus on energy
security this return to pragmatism where
we’re not picking one versus other it’s
come to more of the all of the above
government policies aligning to that
couple exceptions out there we think
that’s a positive thing from a supply
chain perspective though that is where
the challenge whether you’re talking
about Renewables gas power nuclear and
these breakthrough
Technologies um energy security Ukraine
has been a wakeup call even for us like
when when we stepped up with Ukraine we
wanted to and we continue to be one of
the strongest Partners to make sure
nothing is more important to us than
keeping the lights on in Ukraine but we
started to realize right away like we
don’t have this equipment sitting on
shelves we don’t have it in some
Warehouse or an inventory we look around
we have years and years of backlog we’re
talking with some of our colleagues here
about delivering technology 2020 20 27
28 29 30 and and so we came to this
fundamental like this is not only an
energy security issue it’s a national
security issue are we ready for whether
it’s cyber security weather events the
growing demand um and all this
infrastructure to to be able to address
this so we’re having very serious kind
of boardroom level discussions as well
as with our public sector colleagues
from a national security imperative how
do we make sure we have a supply chain
how do we have strategic reserves of
those types of equipment because we have
years of backlog and how do we build
that capacity we have to be fast and we
have to be smart so we’re at the
beginning eror of that but I do think
because of energy security we’ve woken
up to this reality that the current
situation is not sustainable the
capacity is critical and we need to
solve for that both in collaboration
with the private sector and the public
sector so let’s turn to the
transatlantic cooperation a little bit
if we can I mean a big part of the story
from the last two years was us LNG can
can arrive in in Europe and keep you
know really helped resolve the the
crisis that Europe faced and that you
know we like that was not a cost-free
thing but but it by and large worked now
but it was like a market driven thing
like like you know politicians on both
sides want to claim a lot of credit for
it but like largely it happened through
the price mechanism so I’d be really
interested to hear uh Roger kind of how
you see transatlantic cooperation or
like you know kind of strategic allies
working together to build the kind of
capacity you describe right whether it’s
manufacturing capacity whether it’s
stockpiling equipment what are the what
are the places of activity we should
look for where does the government need
to set its efforts well I think there’s
a lot of good discussions going on
there’s a lot of transatlantic
coordination at the highest levels of
government among really smart people and
Europe UK US I think they see the energy
security issue I think they see the
national security issue and there’s a
lot of questions about China’s
opportunities and advantages and how do
we right you know prepare ourselves for
that so we’ve gotten very strong
advocacy cooperation collaboration from
Partners on all sides now it’s not a
Level Playing Field when it comes to
policy between the US and the EU it has
swung the EU has historically LED in the
space I think everybody understands that
the US has the momentum with the
inflation reduction act we see more EU
companies wanting to build factories
here than we see us companies kind of
running to the EU we want to we want to
address that and I I think to the credit
of the European Union they were kind of
antagonistic in the early days of the
inflation reduction act now they’re like
help us understand what we can learn
from the us so we can duplicate that
here how do we build that domestic
supply chain how do we create those
incentives that may be a little
different and we’re very very happy to
have that conversation we don’t think
this should be a us-centric effort and
now we see the flow of information going
back that way so it’s not just about
deploying technology in Ukraine LG and
other places how do we build that strong
economic base in the EU supply chain
Workforce Development right so that they
get the same economic opportunities and
benefits so that’s a big focus at the
moment I mean we love to see Europeans
go from annoyed with with Americans to
inspired by Americans right that like
not that they would admit it
but um but then you know the question
becomes how do we avoid duplicative
effort right like you know we don’t want
to be competing against each other to
build the the wind turbines or the you
know the components for inverters or you
know so like that’s where I think the
kind of government to government
communication is going to become
essential so we’re not in this like kind
of battle for you know who can be the
most protectionist who you know who who
who’s going to like win the subsidy
fight but that were sort of coordinating
or complimenting each other based on
strengths um Andrew I’d love to bring
you into this conversation as well given
in Energy’s footprint kind of like how
do you see the the um the private sector
playing a role in helping to kind of
like create demand for th that kind of
cooperation yeah no I love that question
and I think I think that is happening uh
we don’t have to do anything about it at
this point I think the in the government
incentives through the IRA have already
inspired along with ESG efforts and
other kind of uh just demand from
customers you’re seeing companies that
want to invest in this technology and in
this this new power um and I think that
is kind of like the rising tide that
that sort of lifts all boats so we
already are seeing the demand now it’s
just a matter of executing and that’s
where um people like Roger and his and
his team and his folks uh ge are helping
uh inventery I think I mentioned to you
earlier inventergy built um this year a
solar manufacturing facility that is the
country’s largest single site solar
manufacturing facility of modules in
Ohio and we’re producing by the end of
the year 5 gaw of solar modules um it’s
going to take a long time to onore the
whole supply chain for solar but I do
think there’s an opportunity for folks
like assistant secretary Patt over at
the state department and his team to
work collaboratively with other nations
and and how we can uh sort of frore our
components that are needed because to
your point we can’t dup duplicate these
efforts it takes too long to build a
polysilicon factory and a and a wafering
and wafering in facility and a cell
manufacturing facility we can’t
duplicate we have to do it together
Elena you you know I’d love to he bring
you back into the conversation on sort
of how you see the conversation evolving
with your peers in Europe and with
European policy makers as well with
respect to you know sort of being
inspired by the IRA but but also sort of
you know here in the US there’s a
there’s a lot of hesitancy around you
know Chinese dominated Supply chains you
know I I I think Europe the picture is a
little more mixed kind of what’s the
state of play right now so what what we
need to keep in mind is that the targets
we have in Europe uh for to to satisfy
our climate Ambitions required to almost
triple renewable energy install capacity
and by 2030 and increase fivefold by
2050 so we need a lot of equipment and
we need a lot of critical materials that
will be used to uh manufacture this
equipment and we will need them on time
and at the right price from a utilities
point of view right so we are only one
investment cycle away from 2030 which
means that we definitely appreciate the
lessons learned from the recent crisis
and we definitely understand that there
is a need to find a pathway forward that
combines both climate targets and energy
security and we are increasingly the
utilities working closer with the
industry
um but at the same time our asking from
policy makers is that in order for us to
play our part we need to make sure that
we have Supply chains in place the
resiliency in place the equipment in
place and I will say that again at the
right price uh because unability has
always been an issue when we talk about
energ security when we talk about
climate transition and from the
utilities point of you as well we can’t
just ignore
it um the green industrial plan has
being the response of Europe to the IRA
uh I totally appreciate that it’s not a
matter of competitiveness who can do it
better uh but it’s a matter how you can
join forces and make sure you deliver on
time what we need um in order to meet
our targets um but these These are the
important aspects for for a utility to
make sure that we have enough panels
enough wi turbines enough batteries and
of course this need to come together
with the permitting framework it’s has
been a huge issue uh in Europe
permitting how you reduce red tape and
you you keep deploying and of course
great cables uh are extremely important
um in order to make sure that
electricity flows around the continent
and that you Leverage The the resources
that you have in the different parts of
Europe and to make sure that you reduce
over Reliance to anything as continent
not at the country level so this this
question is for the to the group because
I’m
honestly just
curious um as we you know you think
about this so supply chain concentration
that really is you know it’s largely a
China conversation um what are the
components that we should be thinking
about right like you know is it is it
the is it the wind turbine is it
batteries is it solar modules you know
like what for each of you kind of what
are the ones that what are the the
essential pieces you think we need to
kind of like focus on from a security
perspective then we can talk about the
other things you know sort of the the
industrial policy the political economy
of of transition just from a security
like what which components do we need to
be are you worried about C can I ask a
clarifying question yes sir uh do you
mean cyber security physical security
supply chain I was aiming to be
ambiguous on that just to
like but like let’s like you know we
talked a lot earlier today about cyber
so we could like let’s start at Cyber
and then you know physical I feel like
we’ve kind of covered and then and then
talking about sort of like where is
there supply chain risk that might be
familiar from the oil and gas space
right where you’re worried like you know
like in a in a rising geopolitical
conflict like we’re just going to lose
access to a critical component of the
Energy
System cyber then go go go Supply uh I’m
going to speak to to one before cyber um
but but I’ll start with something I
think that is a huge uh something we’re
facing here in the United States quite a
bit is load growth um whether it’s from
data centers that are uh that are coming
to the United States or whether it’s
from electric vehicles or
electrification of appliances or any
number of things that is bringing
electricity usage up um we here in the
United States have to have additional
capacity we just can’t deal with no
capacity to meet load or meet demand um
and so you know that brings me back to
transmission which I could talk to you
all day about transmission but that’s
not why I’m here uh create wires to
connect disperate regions is incredibly
important um on cyber security I think
all of the components are at issue all
of the components of energy
infrastructure at this point is
connected I’d say the more points of
connection the more vectors for cyber
interference you have so we really have
to do be mindful about that I think my
former employer nerk is doing a good job
at the sort of bulk power system of of
mandating cyber security standards but
when you get behind the meter and even
at the distribution level there really
isn’t a whole lot of conversation being
had there quite possibly because the
information sharing isn’t really
happening um but uh on supply chain I I
i’ I’d say um yeah I’m gonna leave it
there actually I’m gonna stop get off
the so
box others I mean is is it even a
well-posed question maybe I’m like maybe
the componentry question is less
important than I think I think it’s a
critical question and and um I’m going
to go to Ukraine because I think I think
Ukraine is going through the energy
transition right now and and we’ve been
partnering with them shoulder shoulder
with Jeff Patt with our our great
Partners in the government let’s look at
what what’s happened in Ukraine first
thing Ukraine needs in in an emergency
situation is emergency power and so we
make a product called an aerod
derivative turbine imagine a jet engine
connected to a generator on the back of
a trailer bed that you can move truck
trailer that you can move around
strategically Powers about 100,000 homes
connected to a natural gas line Ukraine
could use all of these aerod turbines we
can get them the problem is in an era of
an energy transition climate change we
have two challenges they’re extremely
high demand because everyone in the
world wants to have these ready to go um
to solve droughts weather conditions all
around the world and two they rely on
jet engines which involves critical
minerals so we have huge supply chain
issues so what we’re trying to do with
Ukraine is go to our customers and say
we’re sorry we know you really need this
but Ukraine needs it more how can we
balance that supply chain in real time
we’re managing this down day by day with
these inventories so job number one is
emergency power not as easy as it sounds
and in Ukraine they’re literally running
generators sometimes to keep keep the
lights on um the second would be grid
grid synchronization equipment how do
you enable uh a grid that’s impacted by
a weather event in Ukraine it’s because
of you know targeting a bombing by
Russia and things like that to connect
with other parts of the grid again not
sitting on shelves um very high demand
and years of backlog the third category
I’d say would be just regular
Transformers Auto Transformers and how
do you replace something we had an issue
in North Carolina someone was going
around shooting up Transformers with a
gun who would have thought and and how
do you have a strategic Supply ready to
go so we could go further than that
weather wind and other Technologies but
if we look at Ukraine in the early days
of this energy transition energy
security issue that is those have been
the demand drivers in the near term to
keep the lights on yeah Elena do you
have thought what I would like to add is
that of course there is a need for
everything I mean everything in terms of
components and Technologies and there is
then the special category of equipment
that is available which is the Chinese
panels they are available but then
especially because of what happened with
Russia you want to diversify so there
there is an issue not because there is
not enough equipment but because you
want a diversification strategy that
makes sure
that you won’t go down the pathway of
over Reliance and as you said at the
beginning you’re switching one with
another so it’s it’s on all end it’s not
Pi one technology and Tackle this
problem and one of the things I think is
is an open question for a lot of us in
the analytical community in in the
private sector is kind of like what is
you know how do we even think about
overreliance in that case right like the
the intuitions we have from sort of the
the oil space are just probably not the
right ones to use here and so one of the
things we’re hoping to do in this over
the next year and a half with this
project is think they’re like how do we
actually kind of measure resilience in a
meaningful way right is it is it the
ability to spin up manufacturing when
there’s Supply challenges is a certain
level of diversity and enough I think
that’s going to be some of the key
questions that we have to face um rer I
want to I want to return to you because
you know as as a manufacturer one of the
you know my if I if I you know we kind
of put my my libertarian analyst hat on
for a moment I go well this is all going
to be really expensive right and part of
the part of the story here of globalized
Supply chains is it makes things cheaper
and that’s good for consumers and it’s
good for the energy transition so how do
you how should we think about the the
government doing the right amount of
effort to really bring down costs to
make this an affordable transition and a
secure one at the same time you hit on
one of the key points and we you were
asking about transatlantic factories and
the US factories in Europe let me just
point out this is not a transatlantic
issue NE it’s also domestic issue
everybody wants their the cell Factory
everybody wants their blade Factory and
one thing you know the biding
Administration have to go is go state to
state and say nope you get this and you
get that and we’ve had to spread out the
supply chain because it’s entirely
economically efficient both for the
inefficient for the private sector and
the public sector right as as Andrew
pointed out to to keep you know
repeating all these Technologies and
what we’d like to do
is we don’t want to build something in
the US and ship it to other parts of the
world necessarily we want the whole
world kind of invested not only in the
opportunities from energy nothing’s more
important than affordable sustainable
reliable electricity but have the
economic developments of that too the
work chain development going to
underserve communities and making sure
that we’re inspiring you know people who
otherwise don’t have access to a stem
education to be inspired to become stem
leaders so this increasingly and I’d
like to say we’re doing it because we
want to do it we we’re committed to
doing this but i’ also like to say like
I think increasingly we have to do it if
we’re going to be a global company
working with Global Partners they should
expect this from us where do they fit in
the supply chain they may not get that
in the cell Factory but they could get a
critical component that helps us you
know do this very efficiently all around
the world and the public sector has to
help with like we have domestication
contents domestic content requirements
in the US on inflation reduction act
fine but they’ve defined those in a way
it’s not 100% domestic content you know
making sure that we’re helping our
partners grow their supply chain but
they’re also cautious about China too so
I think they’re finding that balance and
we should continue to be very pragmatic
in how we we find that balance going
forward interesting you know Elena from
the European perspective you know what
do how do you think about that the the
challenge or what what are European
policy makers looking at like I know
like Stam education is a big priority
for you right um you know when you hear
this kind of like we have this term here
in the US it’s like industrial policy is
like an everything bagel right it’s
trying to deliver everything you know
how are how are some of those challenges
being um considered in the in the
European context not challenges but like
a lot of those factors there there are
three uh components uh when it comes to
any industrial I think uh when it comes
to any industrial success so you need
the scale said you need the global scale
you need the Innovation and then you
need the financial support in order to
build something that is uh can can can
deliver
so these days um and with the you the
European Union has said very clearly the
the end Target and what’s the goal uh
where we want to
go when it comes to Technologies and how
exactly the industrial activity will be
supported I think it’s not that clear
it’s a bit um there are so many
technological options there is a certain
amount of money that can support these
Technologies and it’s not infinite uh
definitely a number there uh that cannot
make
everything competitive and successful
and at the right amount and at the right
price made in Europe and I think that’s
where these discussions that are
increasing over time uh with the us
about the IRA and how we bring these two
Frameworks together and we leverage the
best out of it right um we are as you
know right before the European election
so we will have a new commission the
item on the agenda are very clear with
the industrial act the critical minerals
act how GS will be supported and how we
deliver the 20 30 and 40 targets uh but
I think that the it’s it’s still out
there uh the journey on how we are going
to work together and how exactly we are
going to get the supply chains and the
equipment that we need Andrew I see you
nodding and I’d love to hear your
thoughts on this kind of same same
question yeah of course the question you
asked was what is the right amount of
government effort needed and um one of
the it reminds me one of the things we
worked on when I was at doe uh was
Transformers if you’re tracking domestic
uh manufacturing domestic Supply chains
you know that Transformers is a critical
issue whether you’re talking about
distribution Transformers which was
actually a very acute issue here
domestically they’re talking about what
we call lpts or large power Transformers
that are made for the transmission
Network um there was a huge discussion
about creating a strategic reserve for
Transformers and it’s probably still an
active conversation if I had to get yes
uh the hill asked about it and you know
the administration asked about it and
the industry asked about it some but
everybody kind of agreed that because
our system in the United States is so
big different specifications between the
the Western interconnect and the Eastern
interconnect very slight difference in
frequency there just really wasn’t the
ability to have a a supply chain or a
reserve that served everybody’s needs so
you’re talking hundreds of millions of
dollars to maybe NE meet some Niche Gap
uh when it’s needed and I think the
Administration has done a good job of
sort of putting forward a a a strategy
that I think is the right strategy which
is to onshore this stuff and for inure
this stuff so we don’t have to have a
strategic Transformer Reserve so we have
it in our backyards um the IRA
incentives they are they’re fantastic it
allows more more capacity uh for us to
manufacture Goods domestically and work
with our partners I’d also note that
it’s not just limited to the United
States I mentioned this earlier in a
conversation but um because of the IRA
companies like in energy a private
company have been able to invest abroad
as well we have two offices in Madrid
we’ve got projects in Japan Poland UK uh
Uruguay uh Brazil Mexico Canada we’re
able to do that because of the success
we’ve had domestically and i’ I’d argue
that in some respects it’s because of
Investments made even by the r Ira um
that I also agree with uh Roger about
the balance between decoupling from
China and and pushing forward our
manufacturing um efforts here
domestically there has to be a balance
it can’t be just a throw everything out
um China has developed a a manufacturing
um capacity that nobody else in the
world has we’ve kind of seated that
leadership a long time ago and now it’s
time to bring that back to our Shores in
the United States and of course uh the
shores of all of you um represented here
in the room um thank you so much I’m GNA
ask one final question to the panel but
I want to bring the the audience in so
give it give it a thought of what you
want to get out of these folks and and
we’ll turn to you in a moment but you
know a lot of what we are trying to help
states do and is like a risk management
problem right sort of how do we assess
these supply chain risks how do we
incorporate them how do we kind of bring
in the Cyber and physical risks that we
spent a lot of time today talking about
risk management also gives us the
ability to try and hedge right and so
when I think about this challenge I
think well you know it’s just as Andrew
says how do we how do you compete on
solar manufacturing with China it’s like
that might be hard expensive to do but
as Roger brings in there’s a whole bunch
of other technologies that we know we
need for deep decarbonization that are
going to be part of the Future Energy
System that nobody really has ownership
of yet so how do we look at this risk
management problem also as an
opportunity to kind of see investment
flow to places where we we know we need
to see further technological development
and you know how do you Roger how how’s
GE thinking about that how do you think
about it and how can we help the the US
and European governments think about um
that that sort of you know kind of
hedging strategies for this for these
risks it’s something that weighs on me
every day and so thank you for asking
and look if we were sit here today and
if we could lock in the policy framework
so the direction the momentum is
happening I think we’d feel quite
optimistic that you know maybe we’re not
100% there we got some guidances coming
out the bid Administration the EU has
some work to do but seems like things
are heading the right direction but we
all know that nothing is a straight line
and companies do best on this type of
investment when there’s certainty and so
from a risk perspective we see a lot of
uncertainty board sees a lot of
uncertainty we see uncertainty and so
we’re managing for the uncertainty we’re
hedging for the uncertainty and we see
that the trends are moving in the right
direction the energy security uh
innovation technology manufacturing jobs
regardless of you know what you might
think on politics everyone should be
behind all those Concepts but then there
becomes the question how you execute on
that so we’re constantly looking to
encourage our government stakeholders on
all sides of the issues if you care
about energy security if you care about
jobs manufacturing beating China
innovation technology you should care
about sending clear signals of certainty
to the business environment and the
other thing you could do is think about
some of the the roadblocks and the
obstacles whether permitting reform some
of the finance issues how do you
streamline Workforce Development the
things in the way you know I I was
impressed with a lot of things that at
cop 28 in the UAE and one of the things
I walked away with someone who’s been in
the space for 30 years is just like how
much easier it is to get things done in
certain parts of the world like we know
it’s not easy here it’s not easy in
Europe but there’s places where it’s
just really easy and maybe that’s good
for some things you want them to pilot
projects and that’s fine and we can do
that in a collaborative way but at some
point that’s just going to attract a lot
of inevitable investment in attention if
you can do something in three months whe
it would take two years or three years
and litigation uncertainty here so I
think we have to solve for for those
risks at the same time so as an example
of that kind of certainty like the the
global pledge to build you know triple
nuclear capacity and you know which is a
place where there’s potentially a lot of
innovation it doesn’t feel like anybody
really owns that space at the moment
especially in the smrs where Andrew
talked about hydrogen hubs and carbon
capture hubs like those are great we
love where Doe’s headed with that we
love where Congress has headed with that
but now is EPA going to issue the
permits fast enough there there going to
be litigation around those things and
versus other places where they might be
like we’re doing a hydrogen Hub so so
here’s our schedule we’re sticking to it
so we have to be careful about you know
the the relative advantages of those typ
typ of situations and Elena and what are
your thoughts on this kind of like you
know the sort of the the big innovation
problems associated with a net zero
economy and you know how do you you know
where do you see European efforts since
so much of the US conversation is now on
hydrogen and carbon capture and small
modular
reactors definitely there is a lot of
focus on what we like to call the phase
two of De decarbonization Technologies
where things are not settled so um
hydrogen has been been a focus for for
Europe the last few years for PBC as
well green hydrogen the electrolysis I
mean there is a lot of plans for ramping
up capacity uh for manufacturing
electrolyzers in Europe um and there are
special schemes where they allow us to
test things at a smaller scale um there
are these projects of common interest we
have in Europe with quite a few projects
uh around Hydro and especially address
to the heart toate sector so Maritime is
hungry about what they’re going to do uh
industrial players a lot so there is
definitely room there and the Frameworks
are setting up I just think from utility
point of view of course we are trying
smaller things smaller projects
decentralized projects something that
it’s not going at the core of the system
but we test things on the side and we
can see how we can this can be roll roll
out while the market is set up because
the challenge there is a to set up the
market and B to come up uh to make sure
that we have the the equipment and is
working and there is permitting and that
everything around is is set so we are
trying uh pilot projects around Europe
there is a lot of hype around hydrogen I
think this might be scaled down a bit um
next year or so because it’s not just
the economics are hard but it’s also
that it’s it’s very expensive and it’s
very difficult technically to transfer
molecules compared to electrons but I
think that definitely this there is a
lot of room for trial and error and
there is time there that will allow all
of the different sectors to line up and
deliver and there is a great opportunity
in terms of of equipment but I don’t
want to get there this is not not really
my area well I’m I’m really feel that
you like one one of the terms that you
use there is right trial and error and
learning and um I was just I’m reading
the book fixing the climate again with
my students that Charlie Sable and David
Victor wrote this like really impactful
book at least for me um on kind of how
climate policy actually works and one of
the key themes is like learning right
experimentalism ends up being very very
important in in helping firms and
countries make these kind of like
existential choices about what their
energy portfolio is going to look like
what their business is going to look
like in the face of needing to build a
net zero World needing to improve energy
security um and that you know it becomes
a key and important part of industrial
industrial policy um it does and you
know if there is an advantage that we
have in Europe is that we have a lot of
countries with different Energy Mix and
with different Pathways to get to to
nzero which allows us to try some things
around I mean you have France of course
that has nuclear uh you have the South
that has a lot of solar so there are
different Microsystems if if you wish
that they can try different things and
see at the end of the day what are the
solutions that could work and could fly
and what are the ones that who didn’t
yeah that’s excellent I’m really looking
forward to continuing work on that space
and then of course we collect all those
different microcosms with a large grid
and a lot of grid infrastructure and
then we can share efficiency and
resilience um let me open to the floor
uh as folks have questions on this
regard um there should be a microphone
going around um brief reminder questions
have a propositional statement followed
by sense goes up again uh on the subject
of cyber security uh most of the uh
discussion today most all of it probably
seemed to assume that that the
vulnerability was coming from hostile
governments uh how would you compare and
contrast that qualitatively and
quantitatively with the vulnerability to
non-governmental actors whether
it’s hostile private group operating
abroad or a bunch of kids amusing
themselves uh
whatever trying to speak high level
enough that I’m not sharing anything I
probably shouldn’t share um I’d say it’s
I’d say it’s a good point and I’d say
certainly leans towards State actors but
you’re right there is a real threat even
from nonstate connected
actors can I just address that yeah
please please I think it’s a critical
point because the technology should be
agnostic on that right and we have to
make sure we have both digital and
physical
tools exactly yeah yes
yeah thank you Bob iert Atlanta Council
um I’d like to to get your perspective
on wind from a sort of a supplier
investor utility perspective because
we’ve had this downward curve and then
all of a sudden we got hit with Supply
chains disruption inflation higher
financing cost Etc and it’s really
affected the offshore wind in particular
not only in Europe and the us but around
the world as well so I
mean is it going to
change and
why it’s an excellent question tough
days or I mean I in preparing for the
for this conference I read that wind
surpassed uh gas for the first time
across Europe as a as a primary energy
source so challenges in the
industry onshore wind I think has found
its footing good trajectory there
inflation reduction act partially
responsible for that and but even
without the inflation reduction act
we’re seeing the right Market signals to
give onshore win long-term sustainab
bilon support you’re right about
offshore that’s probably been the
hardest thing that we do I think history
if I had to make a prediction we’ll look
at
2023 and say that was the toughest year
that was the year the whole industry had
to reset the market had to reset every
everybody’s expectations had to reset
we’re only in April of 2024 but I’d like
to think history is going to look back
and say April 20 2024 was the year
turned around um the market the oems the
governments came together they learned
from that and we start to see a forward
trajectory so still hard very hard
perhaps the hardest thing we’re doing
but I see the positive momentum and
that’s been a result of both government
the public sector and the private sector
having to make some really difficult
decisions in the last 18 months or so
financing rates are barrier now or we’re
starting to see the pricing start to get
closer we’re getting in the universe now
where where the pricing is making better
sense for for offshore wind so we’ like
the trajectory where that’s headed Elena
I’d love to hear your thoughts on that
question too given that Greece has this
enormous offshore wind
resource um beautiful views kind of like
I what are the you know what what are
the what are your thoughts on that we
think that it’s a technology still in
its early days the offshore wind
um especially in Greece the potential
can be leveraged using floating offshore
wind because we have very deep water and
we understand that this is even in the
earliest days and it’s going to be more
expensive we we understand that and it’s
going to be need support like uh the
same thing happened with all with the
solar and the onore wind back uh like 10
or 15 years ago however uh in Europe we
also have the UTS scheme the carbon
price so we can’t say that the
competitiveness is that close to be
honest I think that the crossover points
are closer than than here uh the gas
prices that we experience are also
higher not as low here um but definitely
going back to my point about scale and
what it takes for a technology you know
to get there and become competitive we
will need the scale from the the
manufacturer’s point of view but also
offer wind is a technology that will
need support in order uh to become
competitive and out comp heat thermal uh
on its own Merit without any any
subsidies and it’s not just that that
offshore wind also needs the grid
infrastructure so going back to my point
about the importance of En hassing grid
modernizing grids and making sure that
we have the infrastructure to leverage
its full potential it’s it’s critical so
it’s not just the equipment it’s also
everything else that comes around it
please Andrew go ahead yeah I on onshore
uh Roger is exactly right I totally
agree with him if you read the American
clean Power Association reports and any
eia reports you saw a huge dip in 2023
of onshore wind deployment and it was
precisely because covid inflation rates
supply chain uh I think you’re on your
trajectory up we have this price signal
now with the inflation reduction act for
10 years we have a solid we can rely on
that tax credit for a long time to come
which we’ve never had before as industry
on offshore uh inventery owns an
offshore wind uh lease in both
California and in New York so we’re
dealing with both floating and more
offshore wind and can kind of you know
see the both perspectives I think
generally as an industry offshore is
going to take a long time to get right
but I do think you’re starting to see it
level out and balance out a little bit
where a lot of the contracts that were
made for offshore wind facilities that
are becoming a thing now were made at a
time when the world looked a lot
different than it does today um I think
some of the ones including in Energy’s
uh um agreement with uh New Jersey BPU
um you know are at a place where we can
start really thinking about putting
steel in the water now it’s a matter of
permitting transmission and VG is
developing a transmission line to take
all the offshore wind from the east
coast and put it in the pjm um
permitting sighting uh and all the other
things that are going to go along with
uh creating the
industry uh yeah we can go over here and
while while the microphone’s in transit
I’ll you know I like that comment from
Elena you know ETS does work you know
Carbon pricing some challenging days
here in the States but it really does
make a difference provides Market
certainty for our innovators go ahead hi
um thank you for everything
UMAS previously CS now at HG uh
centering on the definition of energy
security um and thinking of all the
geopolitical conflicts that we’re having
in the world like we have a global nor
and Global South and of course the
definition of energy Security is
contigent to every country but when
thinking about defining the energy
security of every country or different
regions around the world how do we
differentiate it is it developed to non
developed is it the global South to not
the global South um yeah how do you
think about the definition of each
country thank
youbody write have experience of like
energy security issues I mean IIA I
think has this definition that says it’s
all about availability affordability
access and accessibility so you need to
access to have access to energy resource
at all times at a at a low
price as we are transitioning to a
different world and everyone is
transitioning to a different world right
solar is cheap for everyone you can see
uh in the developing countries a lot of
innovation happening lip frogging and
moving to a certain
direction there is this like 3 a are
replaced by decentralization you know
digitalization uh
decarbonization so and this comes with
its own like risks and its own
vulnerabilities but also with different
opportunities and because the
Technologies are Global um different
countries can enjoy the benefits of the
same technologies that are uh yeah of
the same technology so I would say that
the definition is the same for everyone
in in my opinion how you use the
technology available and how you make
your systems might D might differ but
the definition I wouldn’t say the
different countries would have a
different definition of energy security
yeah if I may add I think one of the
things that often gets conflated is
energy security and sort of
geopolitical factors right that you
could be very energy secure but totally
geopolitically beholden and and you
could be and and so part of what I think
governments are trying to do is navigate
both of those things right that um you
don’t want to sa you don’t want to
sacrifice one for the other necessarily
that’s true but there is a confusion
sometimes I think that energy secure
means energy independ dependent right
which is is not the case uh you need to
have enough diversity H and make sure
that you have access at all time not
that you need to rely on your own
resources right yeah um let’s take one
final question and then I think we can
wrap up the day um yep here we
go
thanks um question is about stockpiling
and what role you see for stockpiling in
future Energies security you know the Ia
at the moment with 90 days uh
requirement for oil to what extent can
that be carried over and perhaps
particularly for Supply chains where
China is already dominant and solar is
the one that stands out for me where it
might make less sense for on shuring or
friend Shoring and what role would you
see for stock piling
thanks um I’m going to respond to two
different answers one um when I was at
doe our office was in charge of the the
Strategic petroleum Reserve I think
there’s a different answer for your
question if you’re talking about fuel
supply it just doesn’t really it’s
comparing Fuel and Technology I think is
a little unfair comparison so no
position on stockpiling uh fuel in
Europe or or wherever because I help Le
the the stockpile here in the United
States for that um the Chinese Supply
the Chinese suppliers of products and
sort of diversifying the the uh
technological supply chain
I I’m only going to speak to my
experience At Doe when we had the tech
the Transformer Reserve idea um that was
specific to the circumstances of
Transformer Reserve they’re just those
pieces of infrastructure are incredibly
expensive and they go out they’re
outdated pretty quickly depending on the
use case um but I won’t opine on other
Technologies to stockpiling I I do think
it’s a it’s a good question to continue
to ask but I don’t know that we as a
country at least for my vantage point
have have had a conversation about
pieces other than sort of L uh large
power any thoughts to add on that
question I think it’s well said
okay well I’m let me uh now we’re I’m
gon to make them wait while I close out
the whole conference so they have to sit
here for 10 minutes now um on on behalf
of everybody at csis let me thank our
guests who’ve been here in person uh our
colleagues from joining online we’re
really grateful that you lended your
time um my colleague Max Bergman uh on
on his behalf as well uh I think we
we’re really appreciative that
everybody’s engaged in this conversation
with us we’re appreciative that that PPC
is in a position to help support this
work and uh we are very very mostly
grateful for the efforts of our of our
experts they took time out of our day to
share their perspectives with us thank
you very much if if you wouldn’t mind we
can close with a warm Round of Applause
for our
speakers and uh this is Joseph mik for
csia signing off we’ll see you next time
[Music]

Join the CSIS Energy Security and Climate Change program and the Europe, Russia, and Eurasia Program on Tuesday, April 23, 2024, at CSIS HQ, for the 2024 Energy Security and Geopolitics Conference. This year’s conference will feature a keynote from The Honorable Geoffrey R. Pyatt, Assistant Secretary of State for Energy Resources and Mr. Georgios Stassis, Chairman and CEO of the Public Power Corporation S.A. The conference will begin at 10:45 AM and conclude at 4:30 PM EST.

The conference will convene senior leaders from government, private sector, and think tank communities. Speakers will reflect on the last two years of policy developments in Europe related to energy security, specifically how energy policy is informing and shaping geopolitical decisions, and vice versa.

The conference will be held at CSIS headquarters and streamed virtually. Further details on the schedule, participants, and registration will be updated below in the leadup to the conference in April. All attendees must register through the link below.

This event is made possible by the generous support of the Public Power Corporation S.A.

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