Varcoe: Russia has ‘exceeded its energy card’ in the conflict as Putin raises the stakes

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The war in Ukraine and an energy crisis in Europe have reshaped the geopolitics of oil and gas and cast a long shadow around the world.

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With Russia’s invasion of Ukraine faltering and Vladimir Putin mobilizing more troops, the war has changed as Moscow has “exceeded its energy card,” said Kurt Volker, a former US ambassador to NATO.

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“It’s not over yet. We see an end in sight, but it is not yet here,” Volker said Friday at the Global Business Forum in Banff.

“The tide of war is now decisive with Ukraine setting the terms and tone, slowly moving forward…This war probably continues well into next year, but it becomes decisive against Russia.”

Putin sent troops to Ukraine in February, sparking the largest military conflict in Europe, and the largest displacement of people on the continent, since World War II. The fighting continues with gains made by Ukrainian forces this month in the Kharkiv region of the country.

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Earlier this week, Moscow announced plans to mobilize 300,000 military reservists. It also began holding referendums on Friday in occupied parts of Ukraine on whether to become part of Russia, a move Volker denounced as a sham.

Russia’s president has also again threatened to use nuclear weapons if his country’s territorial integrity is in jeopardy, something Volker called “a pretty big hoax” but one that needs to be watched carefully.

“I don’t think that’s likely, but he’s looking at the last things in his drawer,” Volker, who also served as the US special representative for Ukraine from 2017 to 2019, said during an online presentation.

“The Ukrainians will make steady progress, but something will break on the Russian side. We do not know very well what it is, when it is or how it will be. But now they are in an untenable position from which Putin has no turning back.”

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One of the cards that Russia, the world’s largest exporter of oil and gas before the war, has played in recent months has to do with its vast energy supplies.

Putin has turned off the taps on natural gas exports to Europe, while Western countries, including Canada, have imposed bans on Russian oil.

EU members are looking to other energy sources and cutting consumption as prices soar.

“Russia has already overstated its energy card now,” Volker added, noting that Germany has contracted LNG supplies and is keeping some nuclear plants that were planned to close connected to the grid.

“It will be an expensive winter for Europe, but it will not be one of deprivation and I think they will get through it. And this marks the high point of Russia’s ability to use energy as leverage. In the future, the trend will be towards less and less dependence on Russian oil and gas.”

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At the two-day Global Business Forum, the war in Ukraine featured as a key theme throughout the summit.

Ivo Daalder, president of the Chicago Council on Global Affairs, called the conflict an “exhilarating moment” for the West.

Allied countries have responded by imposing crippling sanctions on Russia’s economy and providing aid to Ukraine. The war has also strengthened NATO, which will bring Finland and Sweden into the alliance, said Daalder, who served as the US ambassador to NATO from 2009 to 2013.

And it has permanently altered the flow of energy between Russia and the West.

Countries like Germany and Italy that depended on their gas are feeling the pressure of a growing energy crisis, but the era of Europe’s dependence on Moscow “has completely disappeared,” he said in an interview.

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“We are going to end any idea that our reliance on energy from Russia is acceptable,” Daalder said.

“If you can get that from your friends, instead of countries you can’t depend on, that’s a good thing. So here is an opportunity for the United States, which is massively increasing its LNG exports, and an opportunity for Canada to be a source of supply that can be counted on.”

The Trudeau government has said Canada could pump an additional 300,000 barrels of oil equivalent by the end of the year to help its allies.

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However, with no liquefied natural gas plants ready to ship gas overseas and with limited capacity to increase oil exports immediately, there is not much more Canada can do in the short term.

But you need to plan for the long term.

“We have to lift our heads and look at our allies and friends and make sure we help them get through this…because this is not a five-year period, this is here for the next 10, 20, 50 years,” the former CEO noted. of Suncor Energy, Steve Williams.

To help other countries, Canada will need to get the policy mix right, balancing decarbonization initiatives with the need for additional energy infrastructure.

Perrin Beatty, president of the Canadian Chamber of Commerce and a former national defense minister, said the country can help produce additional fuel, food and fertilizer for the world.

“We have both an obligation and an opportunity to play a significant role and demonstrate international leadership in a way that we haven’t seen in recent years,” Beatty said.

“This could be Canada’s time.”

Chris Varcoe is a columnist for the Calgary Herald.

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