“It’s déjà vu all overagain,” said philosopher and Hall of Fame baseball great Yogi Berra which aptlyapplies to the present-day Russian weaponization of energy with its tactic ofreductions and selective cut-offs of natural gas to its European customers.

A similar Russian cut-off ofresources occurred almost 80 years ago, post-WW II, during the Cold War whenthey blocked all roads and rail traffic that threatened to starve West Berlin’s2 million inhabitants. This blockade necessitated the infamous Berlin airlift thatprovided essential food & energy to the citizenry and lasted almost a yearJune 24, 1948 to May 12, 1949) before Joseph Stalin relented and opened theroad and rail links to the besieged city.

Fast forward to 2022. Putinis channeling Joseph Stalin by recreating the greatness and glory of the SovietUnion. This time Putin has a much wider & deeper hostage base in most ofEurope, not just West Berlin, to deprive natural gas which is heavily utilized industry-wideincluding residential heating.

According to World Bank 2022estimates, Germany has the world’s 4^th largest GDP and is Europe’slargest economy. The comparative highest GDPs are indicated in the chart below:

The Russian Bear’s EnergyChokeholds

The following chart entitled Russia Tightens Squeeze on Gas Flow to Europe provided by Bruegel (a European think-tank oneconomic issues) and ENTSOG (European Network of Transmission System Operatorsfor Gas) present Russia’s measure of control. By selectively reducing orcutting off gas supplies to the European economies, they are leveraging thiscontrol for the purposes of political & economic behavior modification withrespect to the easing of sanctions.

The impacts of future Russiangas cut-offs vary from country-to-country contingent on each one’s dependencyon Russian gas and present-day utilization of other energy sources. Thefollowing chart entitled How a Russian Gas Freeze Would Curtail European GDPs provided by the IMF presents the varying degrees thatgas cut-offs would impact European economies:

European countries are reviewingtheir contingency plans and scrambling to secure non-Russian natural gas tomake up most of the shortfall in liquified natural gas (LNG). The followingchart entitled LNG in Europe: Ready or Not provided by Gas Infrastructure Europe presents thenumber of operational and planned LNG import terminals.

According to GasInfrastructure Europe, in the first half of 2022, the US has been the world’slargest LNG supplier and playing the energy cavalry with 71% exported to the UKand Europe.

The German Dilemma

In an attempt to mitigate a worst-casescenario of total Russian gas cut-off, Germany has set aside $2.55 billion torent four LNG processing vessels. These vessels take the chilled liquifiednatural gas from seagoing tankers, warm it back into vapor and move it ashore. Tostreamline and accelerate their acquisition and operation, the Germangovernment has assumed responsibility for their brokering and financing.

LNG is fungible however itssupply is limited because of the dearth of LNG vessels and terminals which willforce German and other European countries to outbid their Asian counterpartsmaking acquiring essential energy an extraordinarily expensive endeavor.

Economic Role Reversal |Africa to the Rescue

Filling in the energy gap insupplementing US LNG supplies are LNG shipments from Africa as outlined in thefollowing chart entitled Can Africa Offer an Alternative to Russian Gas provided by OPEC Statistical Bulletin 2021 andStatista.

It’s ironic that Europe isdesperate for alternative LNG sources now seek it from Africa for economic survivalwhen for decades these same former African colonies were dependent on foodsources from Europe. Less discussed is the risk is that these African LNGexporting countries are dependent on Russian & Ukrainian foodstuffs andcould find themselves in a double bind and blackmailed by the Russiangovernment in refusing or limiting LNG exports.

Europe’s Folly | SoleSource Suckers

Sole sourcing is a recipe fordisaster carrying an unacceptably high risk whether it be a change of thesource’s management, unfavorable change of source government, naturaldisasters, supply chain disruptions, etc.

Europe’s political folly ofdeliberately engaging in a high dependency if not exclusivity on sourcing theirenergy requirements to an historically, non-democratic state like Russia couldbe classified as irresponsible.

Russia, like China, haveengaged in capitalistic economic policies & practices yet their authoritarianpolitical practices have not changed. The priority of non-democracies hasalways been political not economic, as their policies are predicated onpolitical not economic objectives. This is possible because autocraticleadership cannot be voted out of office by the citizenry.

The naive hopes by European leadershipthat “this time it’s different” because of Putin’s extensive exposure to thewest as an agent in East Germany and his fluency in German have been dashed.Indeed there was fierce opposition amongst their more savvy, street-smart intheir ranks not to become highly energy dependent on the Russian state becauseof the risk.

Putin’s brilliant and patienttactic in pre-positioning Russia to leverage its energy resources and foodproduction has paid off handsomely by placing Europe in a precarious position.

Conclusion

For this reason Putin has theluxury of triggering economic hell with a flip of a switch creating greatereconomic carnage than on the Ukrainian battlefield. The Russian militaryleadership may not carry through his orders on a tactical nuclear strikehowever they’ll have no qualms about standing by while Putin shuts off gas andenergy to Europe particularly as the colder season approaches.

Regardless whether Putin isstill in power when winter arrives, the European winter season will bedifficult resulting in socio-economic hardship.

More ominously in thelong-term, this confirms a multi-generational dilemma because from the West’sperspective, the present-day and future Russian leadership cannot be trustedthanks to Putin’s aggressive efforts to indoctrinate the young leadership andyounger generation to carry the torch in the same way as their political forebearers.

© Copyright 2022 Cerulean CouncilLLC

The Cerulean Council is aNYC-based think-tank that provides prescient, beyond-the-horizon, contrarianperspectives and risk assessments on geopolitical dynamics and global urbansecurity.