We are presently seeing the vulnerability of the European markets to supply dependence and especially risks of reliance upon Gas from Russia. So how much is Europe dependent on Russian gas?
The EU is so dependent on it, and because it has committed to limiting its greenhouse gas emissions. The EU imported 155 billion cubic meters of natural gas from Russia in 2021, almost half (45%) of its gas imports and nearly 40% of the total amount used, according to the IEA.
There is currently a real scramble to change the dependencies due to the Russian invasion of Ukraine and the implications to Europe, and this growing recognition that Europe is faced with a real energy crisis for the next decade.
The current “talking up” of replacing oil, coal and gas with renewables of wind, solar, green hydrogen solutions (PEM Electrolyzers), new grid infrastructure and battery storage means potentially some very volatile and disruptive energy management problems in the short to medium term.
Over now for the next 10 years replacing existing energy generating solutions, dependent on oil, coal and gas with ones based on renewable solutions needs to be even more central to energy management.
But we also need to be recognizing the next crisis following this present one, that is rapidly coming towards us is the dependences on essential minerals and who controls these and that is China.
As the EU attempts to solve this Energy Crisis it is moving into the next one that is possibly worse.
Yet once this crisis gets resolved and that will require a very intense energy transition over the next three to five years with all the social, political and infrastructure issues to manage in radical ways we will enter the next energy crisis: the reality of securing the essential minerals needed for the solutions offered today for the clean energy transition.
In reality, we are moving from one current dependence on oil and gas into another dependence trap of obtaining the present essential minerals needed for batteries within electric cars or to support renewable storage, green hydrogen solutions, solar and wind.
Moving from today’s crisis of dependence on Russian Gas in Europe we will go through volatility and instability of energy for years to come
Today’s crisis in Europe: dependence on Russia for Gas
A short summary, specifically on Germany’s energy shocking dilemma and its dependence on Russsian Gas- that should have NEVER HAPPENED.
Just read this 2014 article “Energy Dependence Dooms EU to Instability“to not understand what was coming towards us, we kicked the energy dependence can (barrel) down the road. Well, it’s well and truly back!
Europe can’t manage the energy transition in progressive ways, it needs to be aggressively managed
In a recent Q&A: How could Germany and the EU weather a fossil fuel embargo on Russia? by Clean Energy Wire (CLEW) the following fallout issues have been highlighted that the German government fears from cutting Russian energy ties?
- “Europe’s supply of energy for heating, mobility, electricity and industry currently cannot be secured in any other way” (Scholz)
- Halting energy trade with Russia would not just cause inconveniences to individuals but would inflict “damage on the entire society that would ultimately undermine other sanctions” (Habeck)
- Stopping oil and gas deliveries from Russia would lead to “severe damages to the economy, unemployment, to large societal damages — and then there is the question, will we be able to keep this up?” (Habeck)
- “If we announce an import embargo now, we have to be able to sustain it for three years, not just three days. I don’t have data that says that this is possible, but instead, I have information that suggests that we then get severe economic distortions.” (Habeck)
- Cutting gas imports now without knowing if this can be sustained next winter would mean that deliveries from Russia may have to resume at the end of the year. In the meantime, prices for gas would skyrocket (Habeck)
- Although the economy and climate ministry (BMWK) has repeatedly said that gas storage levels are sufficient to get Germany through the rest of the winter, spring and summer, it has also warned that if Russian deliveries should cease entirely, securing supply for next winter would be difficult
Without doubt the EU is in a real energy dependence crisis that constricts how they can react to the Russian invasion of Ukraine.
The next crisis is possibly worse, supply of Essential Minerals for Renewable Solutions
Lithium, graphite, cobalt and nickel and other essential minerals are all presently required for the renewable solutions we require to replace fossil fuels and for that, we rely specifically on China, Chile, the Democratic Republic of Congo, Indonesia and Australia.
An essential report to be read was published by the IEA in May 2021, “The role of critical minerals in clean energy transitions. highlights our need for these essential minerals and while we are facing a growing energy crisis in the world our rush to reduce dependence on oil, gas and coal will take us into another very different energy crisis in the possibly the next 5 years to come.
This offers an extensive review of this topic of critical minerals needed in the Energy Transition and anyone interested, concerned or wishing to understand issues that are critical to a successful energy transition should find time to read this report.
The mineral intensity for renewable solutions will become the critical focus point as we attempt to scale up any energy transition
The mineral intensity for our renewable solutions within the energy transition will have an increasing focus on Rare earth elements, and Manganese, Nickel, Chromium, Silicon, Zinc, Copper for our new power generation capacity
Mineral security will become a new variable in the energy transition, that is for sure. Briefly taking some points from this report.
Will the supplies be resilient and secure?
The reality is today that many of the energy transition minerals are more concentrated on a few countries than oil or natural gas supplies—that indicated real risks.
For lithium, cobalt, and rare earth elements, the world’s top three producing nations control well over three-quarters of global output. In some cases, this is one single country. The Democratic Republic of the Congo (DRC) and the People’s Republic of China (China) are responsible for 70% and 60% of global production of cobalt and rare earth elements, respectively, in 2019.
China has a very high concentration for processing operations and has global refining shares of 35% for nickel, 50-70% for lithium and cobalt, and nearly 90% for rare earth elements.
The Chinese companies have been making substantial investments in overseas assets in Australia, Chile, the DRC and Indonesia to make for even more critical mineral control.
The decline in resource quality is becoming a growing concern as well.
One example mentioned in the IEA report was Chile, where the average copper ore grade has declined by 30% over the past 15 years. This extracting the metal content of lower-grade ores requires more energy, exerting upward pressure on production costs, greenhouse gas emissions and waste volumes.
This impact from poorer quality will add growing scrutiny on environmental and social performance. Consumers and investors are continuing to source the minerals in sustainable and responsible produced ways. Will they?
Increased mining in already highly stressed parts of the world of climate issues will add to higher water stress levels. Some areas or regions in Australia, China and Africa have extreme heat, and flooding gives greater challenges in ensuring reliable and sustainable supplies.
Reliability, affordability and sustainability for minerals will become critically important to manage.
The IEA regards the risks to the reliability, affordability and sustainability of mineral supplies are manageable, but I openly would question that in this changing world of global conflicts and politics.
This supply management will require a greater focus on these critical minerals, collaborations and policy co-ordinations in a rapidly polarizing world of global politics
The suggestion of recognizing mineral security in similar ways to how the world monitors and manages oil or gas security as this critical mineral threat can have far-reaching consequences throughout the energy system if not globally managed and recognized for the risks it will present.
Recognizing energy dependencies in the public domain.
Mineral supplies will not be seen as quickly as “spikes in pump prices” but in how minerals as essential components for infrastructure and our energy transition will make it more expensive and delay the pathway to net-zero even more than we see today.
Pump prices get immediate public attention, less so for essential infrastructure or energy transition delays although this will change, as more dependence on energy resilience comes into play, as we when ourselves off fossil fuels onto renewable clean energy.
A critical overview of the dependencies and crisis potentially coming for securing essential materials can be seen below.
Let’s take the time to evaluate the following slides from the IEA in support of their May 2021 report, “The role of critical minerals in clean energy transitions.
Energy instability will dominate much in the next ten years, in conclusion:
Mineral security and intensity of use will become the energy risk we will all be facing in ever-increasing growing realities, once the transition from fossil fuel dependence is fully on its way to being replaced by renewables, that is for sure.
The EU in particular has to find a way out of its current fossil fuel dependence, especially reliant on Russian gas supplies.
In the next big crisis, both the EU and increasingly the USA has to face up to its even more dependence on China’s dominating role in essential mineral supply and processing both inside China but in all its investments made in Africa, Asia and Latin America to gain world dominance in these.
Energy management at the global, regional, country and local levels is going to be dominating in the years to come.
*This summary has been drawn from the report from the IEA as per the links shown.
The report by the IEA in May 2021, “The role of critical minerals in clean energy transitions“, offers an extensive review of this topic and anyone interested, concerned or wish to understand issues that are critical to a successful energy transition should find time to read this report.
All rights reserved by IEA. The report reflects the views of the IEA Secretariat.
