Russia's President Vladimir Putin at Navy Day Ceremony

Russia's President Vladimir Putin, Defence Minister Sergei Shoigu and Commander-in-Chief of the Russian Navy Nikolai Yevmenov attend the Navy Day parade in Saint Petersburg, Russia July 25, 2021. Sputnik/Aleksey Nikolskyi/Kremlin via Reuters

Why Seablindness, Not Putin, Could Be The Biggest Energy Threat

John Konrad
Total Views: 113
January 20, 2023

by John Konrad (gCaptain) Vladimir Putin’s attempts to destroy Ukraine have been met with powerful resistance, and his energy war against the West has been met with a determined response. His failures in both are centered on Putin underestimating the will of Ukrainians and the ability of the west to quickly reroute LNG tankers, deploy grain ships ton the Black Sea, and send US Merchant Marine ships filled with military supplies to the Baltic and Mediterranean. He underestimated a seafaring nation and shipping itself.

Seablindness: “the inability to connect with maritime issues either at an individual or political level”

The results of Putin’s endeavors have been far from satisfactory for the Kremlin, leaving Putin with few options and a weakened position while showing the world the importance of maritime transportation. But, will either Russia or the west learn the right lessons from this conflict or will we continue down the path of chaos, war, and apathy toward the power of maritime transportation to solve big problems?

European Energy

Prices for natural gas in Europe have dropped from near €150 per megawatt hour to €60/MWh in the past month, the food crisis is stabilizing, and massive amounts of US Department of Defense stockpiles continue to be loaded on American flag ships and aircraft for delivery to Ukraine.

Although European energy prices are still high by historical standards, it is a relief for households and industry. Another sigh of relief comes with the fact that Europe’s gas storage facilities are full, contrary to what was expected. Usually, they would be at 60% capacity by this time of year but they currently stand at 80%. In Germany particularly, it is close to 90%. Putin’s plan to retaliate against the West with an energy war has not worked out well for him.

Although Russia might take the decision to reduce the marginal amounts of pipeline gas that still find their way to Europe through Ukraine and Turkey, most industry specialists assume the upcoming spring and summer gas storage refill season will start off with high amounts of gas, which should ameliorate fears that winter 2023/24 will be a tougher challenge due to diminished Russian supplies compared to the first half of last year. In this context, it appears Europe has the necessary measures in place to deal with additional cuts from Russia.

Halting the fuel supply to Turkey would likely provoke a negative reaction from an important country that is the only gateway for Russian commodities coming from its interior waterways, the Caspian and Black Seas, to leave through the Bosporus Strait.

China Remains A Wildcard

Even if Putin is willing to oppose Turkey, the European countries are now better prepared to face an energy war than they were a few months ago. The only variable that could alter the game is China but that nation is emerging from strict COVID lockdowns with gas tanks full from a lack of growth.

The current level of LNG supplies could be ample this spring if Europe is replenishing reserves from the United States but the situation could get tense again come winter 2023/24 if Chinese demand increases sharply.

Worst Case Scenario

The worst-case scenario includes another international conflict or a major natural disaster, however, countries such as Germany have proven that they are able to act quickly and efficiently to engage shipping in a crisis; for example, floating LNG terminals can be set up in only a few months to provide an alternative to Russian gas. Governments should prioritize maritime alternatives, offshore wind, hydrogen fuels, and nuclear ships. They should continue to work with the United States Maritime Administration, Department of Energy, and Department of Defense to support LNG exports and maritime solutions. By doing so, Europe could be in a better position than before the war and reap the benefits of this difficult year for many decades.

The question is, as energy worries relax, will the shipping puck be passed back to the IMO (and continue to be mostly ignored in Washington) or will leaders start to understand that energy security can’t be solved by another meeting in Davos, it can only be solved by moving more molecules from land-based transportation (e.g. vulnerable pipelines, carbon intense trucking/aviation, onshore wind farms) to seaborne solutions.

Washington Remains Apathetic To Shipping

Former Democratic presidential candidate Pete Buttigieg endorses former U.S. Vice President Joe Biden at Chicken Scratch in Dallas, Texas, U.S., March 2, 2020. REUTERS/Elizabeth Frantz/File Photo

The consequences of the current global crisis could linger on for Europeans, but the U.S. is already forgetting the lessons. Those at the helm, like MARAD Commandant Ann Phillips, Secretary Pete Buttigieg, and Secretary of the Navy Carlos Del Toro remain reticent to laud the contributions of U.S. Merchant Marine transport vessels in the armed conflict and tepid in their enthusiasm for LNG and energy exportation. Moreover, they are shying away from taking a role of leadership in pinpointing maritime approaches to address the planet’s energy needs, food shortages, or reinforce the role of the US Navy in maritime security worldwide.

Pete Buttigieg has used his influence to great effect in the past year, helping to resolve airline issues and encouraging investments in highways and landside infrastructure. However, despite his background as a veteran US Navy officer and the fact that climate change is a priority for his administration, he has been largely silent on the role of shipping in global affairs or its potential to solve climate issues. This is a shame, as the US has the most extensive river and coastwise shipping system in the world – a system that could be unlocked to provide considerably more food and energy to the world – and ships are up to 10 times more energy efficient than trucks and up to 100 times more than airplanes. Pete should be working tirelessly to promote this incredibly efficient form of transportation that – by providing energy, food, and arms to Ukraine – has saved countless lives in 2022. Instead he, and his Maritime Administrator, have remained silent about ships.

For the United States, apathy towards shipping sadly remains business as usual. Billion in subsidies for the carbon-intensive aviation industry while not even a public word of acknowledgment from Pete Buttigieg for the critical role of shipping in world affairs. He is not alone. Biden – whose father worked in shipyards – rarely discusses shipping except to admonish the industry’s largest companies and occasionally to support offshore wind. John Kerry and Al Gore continue to park jets at Davos airport and demand immediate action to reduce emissions but no leaders have been willing to follow Greta Thunberg’s and sailing to world climate events.

The energy crisis has been a real and pressing issue, with pipelines bursting and shipping lanes changing, but shipping has delivered beyond expectations. Now, as Ukraine pushes further East and energy prices continue to plummet as giant tankers reroute to move millions of tons of oil and gas, the greatest danger may no longer be Putin. It may be the lack of recognition of the vital role shipping has played in solving the many crises we faced last year.

Tomorrows Biggest Threat

The biggest threat to global well-being is that we – the world – forget the heroic role shipping has played in stabilizing global energy, food, and the supply chain. The biggest threat may now be the utter lack of maritime leadership in the United States, the continued unwillingness of European shipping executives to engage with Washington D.C., and the decline of Western Navies’ ability to secure the high seas without needing the help of nations like Turkey and China to broker deals.

We must not forget the immense contribution of shipping to our global stability and security since the outbreak of COVID. We must recognize the importance of maritime leadership and the need for future collaboration between the US and Europe to ensure the full employment and safety of earth’s greatest natural resource: our seas.

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