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13 July 2022

The UK isn’t prepared for Russia’s new energy war

Almost none of the Tory leadership candidates want to talk about the strategic conflict Europe is embroiled in.

By Paul Mason

“Still no evidence of any interest in the war”, George Orwell complains, in a diary entry from May 1940, days before the Dunkirk evacuation began. “Last night, Eileen and I went to the pub to hear the 9 o’clock news. The barmaid was not going to have turned it on if we had not asked her, and to all appearances nobody listened.”

As the Ukraine war heads into its sixth month, that’s how it feels here. When it was all air strikes, manoeuvres and newly-discovered execution cells, the media were – rightly –  in the thick of the action. Now, although Russia’s tortures, rapes and executions continue, Europe’s first major conventional war since 1945 has become, in British public consciousness, like a chronic condition – to be checked on occasionally and “managed”. 

Russia is methodically “rubblising” cities in the Donbas; Ukraine, in response is using the long-range rockets donated by the US to torch ammo dumps and command posts deep behind Russian lines. The momentum on both sides appears to be dwindling.

But at the strategic level the conflict has only begun. This week Russia shut down Nord Stream 1, its vital gas pipeline to Germany, for what it says is a routine maintenance operation. The German government fears the supply will never restart. Even if it does, the high price and deliberately choked supply of Russian gas to Europe would leave the continent’s most gas-dependent economies in deep trouble.

In the run-up to the war, many European countries saw their domestically held gas reserves depleted – by a mixture of reluctance to buy at inflated prices and the refusal of states to act strategically on energy security.

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Today, Russia-dependent utility companies in Germany are under severe financial stress. Uniper, the biggest buyer of Russian gas, has applied for a government bailout of up to €9bn in return for an equity stake. It is being forced to buy Russian gas on the open market but prevented by a price cap from passing the inflation on to consumers.

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And it’s not just the energy companies. Much of German heavy industry is dependent on gas for production and while major players such as BASF  have diversified supplies and reserves, industry leaders say it is smaller companies, sometimes critical nodes in the supply network, who will feel the stress first. 

The German Green politician, Robert Habeck, who is the country’s vice-chancellor, warned in June that a sudden gas shortage, combined with the financial collapse of gas-dependent firms, could create a Lehman Brothers-style moment where the whole energy market falls. On Tuesday he told reporters: “The situation on the gas market is tense and unfortunately we can’t guarantee that it will not get worse. We have to be prepared for the situation to become critical.”

So both industry and the public sector are facing self-imposed gas rationing. One big housing rental group in Germany has cut the temperature of its residents’ central heating to 17 degrees. A town council in Saxony has rationed hot running water for public housing tenants to three time slots per day. 

But all this is being treated in Britain like the rumblings of a distant thunderstorm. Almost none of the Tory leadership candidates want to talk about the strategic conflict Europe is embroiled in. Or the impact on Britain if a Russian gas shutdown throws Germany  – along with gas-dependent Italy, Romania and Hungary – into a simultaneous political and financial crisis.

British politics has successfully compartmentalised the cost-of-living crisis as a domestic issue – seemingly unconnected to the war in Ukraine. While it’s true there are multiple factors driving inflation – the post-Brexit skills shortage, the post-Covid recovery, the deglobalisation of supply chains – the price of Russian gas is the one factor that is weaponised, and capable of weaponising all the others. 

[See also: What do Russia’s Nord Stream 1 cuts mean for Europe’s gas supply?]

As household finance experts warn of energy bills topping the £3,000 mark by 2023, it is time for politicians to level with the people, just as they have done in Germany – and to contemplate radical action. If central European countries are forced to switch the lights off, and introduce compulsory rationing of heating and light this winter, and bail out private companies with tens of billions of euros, that’s not just an energy crisis, or a financial crisis. It will be a strategic blow in a conflict between systems, initiated by Vladimir Putin.

People will go on the streets, rightly, to demand lower prices and priority supply for households and public services, not non-essential corporations and luxury consumption. Some, spurred by the conservative right, will demand an end to decarbonisation targets, the energy taxes that promote them and to bans on coal and fracking. And they will ask: who is to blame?

Across Europe, there are political movements ready to blame Western governments for supporting Ukraine, with arms and sanctions. In Germany this includes the far-right Alternative for Germany (AfD), a vocal section of the Left Party and – tacitly – Putin-sympathetic voters among both the social democratic and conservative electorates. 

In Britain it will be the usual suspects: Nigel Farage, Reform UK and, on the far left, the likes of George Galloway and Chris Williamson. But the real British weak point – if an energy crisis does engulf Europe –  will be the Conservative electorate. They’ve been sold one lie – Brexit. A more subtle lie was the story woven by Boris Johnson – that Britain could shovel arms, ammunition and money into Ukraine without any domestic consequences. Our support for the war was framed as a free hit against totalitarianism, delivered by other people’s children and enhancing Britain’s reputation as the unilateral tough guy of Europe.

With the emergence of the first fuel price protests, and renewed pledges to abandon the net-zero target from Conservative leadership candidates, we’re at the point where the UK, like the rest of Europe, has to face the connectedness of the crises we are living through.

Russia fights strategically. Its strategic aim is to split Nato, shatter the EU, blow apart Western democracies and install a Putin-friendly politician in the White House. Its invasion of Ukraine, its dark manoeuvrings with Lithuania over rail access, its shutdown of Nord Stream 1, and its blockade of grain exports to the Global South: each of these events are “operations”. So is the disinformation war it is fighting: the perpetual threats of nuclear armageddon mouthed by Putin’s acolytes on live TV, the intimidation aimed at Western journalists.

It’s all part of something we must honestly call a war. The non-violent stuff is there to back the missile strikes. It’s all there in the Russian textbooks, which explain how economic pressure, political manipulation and culture wars can render the “state victim” helpless, forcing Western adversaries to act against their own interest.

The art of facing down Russia in Ukraine, retaining and enhancing our own democratic freedoms, maintaining the resilience and openness of our societies, and keeping the lights on – that’s the real challenge facing this fractured Tory government. But its lost in the chatter. As with the Brits Orwell observed in 1940, we are trapped in the delusions of a phoney war. Unfortunately the next move lies with Russia.

[See also: What happens if Russia doesn’t reopen Nord Stream 1?]

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