Russia With Its Energy Can Be Modern ‘Noah’s Ark’ as West Buries ‘Green Transition’: Rosneft Chief

The US and its allies have been forced to scale back plans to move away from hydrocarbon-based sources of energy in favour of ‘green’ alternatives like wind, solar and hydrogen power amid shortages caused by efforts to artificially reduce reliance on Russian oil, gas and coal to ‘punish’ Moscow for its military operation in Ukraine.

Anti-Russian sanctions have effectively wiped out the West’s plans for a so-called green transition, with the single global economic market “dead” and its institutions and regulatory mechanisms operating in a “wartime regime,” Rosneft CEO Igor Sechin has said. In this situation, Russia, with its immense energy potential, can serve as a modern-day "Noah's Ark" for the global economy, he suggested.

“Anti-Russian sanctions have essentially done away with the ‘green transition’,” Sechin said, speaking at the St. Petersburg International Economic Forum on Saturday. “In fact, the ‘green transition’ is no longer needed as a way to manipulate the market, with other, cruder and more radical measures available,” he suggested, with these including “robbery” as defined under the Russian criminal code.

While discussions about green energy continue, Europe is in fact facing a “coal renaissance” caused by its leaders’ shortsightedness, Sechin said.

“The demand for cheap substitutes of energy is growing and the share of coal in the energy balance is increasing. Thus, coal-fired power generation in Europe, having already climbed to 18 percent of the total [energy balance] in 18 percent, may grow by more than a third in 2022. There is a real ‘coal renaissance’ underway, undermining global efforts to reduce the carbon footprint,” Sechin said.

"In these conditions [of energy shortages] the answer to the question of where the Noah's Ark of the world economy lies is important. Russia, with its energy potential and a portfolio of first-class projects, such as Vostok oil, can meet the world's long-term needs for affordable energy resources, undoubtedly is this life-saving ark," he said.

Energy Suicide

The Rosneft chief suggested that by sanctioning Russia, European nations are committing energy “suicide” and bankrupting their own competitiveness vis-à-vis the United States.

“As a result of the anti-Russian sanctions imposed upon it, Europe has completely lost its agency and chances of becoming not only a political but also a competitive economic pole – an alternative to the USA,” Sechin said, pointing to the region’s status as the world’s top spot in terms of energy costs for producers.

“The energy suicide committed by Europe will have long-term consequences. We are already seeing a drop in its economic potential, a loss of competitiveness and direct losses for investors,” the CEO added.

Predicting that world shortages of oil would continue for a long time due to years of underinvestment and the current crisis, Sechin stressed that the economic downturn the planet is slipping into has been exacerbated by the permanent “sanctions premium” placed on energy by the West.

“If before, money flowed from one market to another, now, everything except for hydrocarbons, even the gold traditionally used for reserves is falling simultaneously. The dollar is rising as a last refuge against the backdrop of systemic inflation in the United States. That is, the United States is the main beneficiary of the crisis due to the inflow of capital and the growth of the dollar. At the same time, against the background of the inevitable rise in rates, the cost of servicing America’s huge debt is growing, and in the short term, this will mean recession and stagflation,” Sechin predicted.

“As for the poorest countries of Asia, Africa and Latin America, as well as developing countries without their own affordable energy resources, sanctions for them mean rising prices for fuel, energy and food. The prospect is hunger and economic collapse. The organizers of this ‘sanctions Bacchanalia’ themselves admit this,” he added.

The official pointed, for example, to European countries’ efforts competing against developing nations for limited supplies of LNG, outbidding them on global markets.

The United States slapped sanctions on Russian oil and gas (which accounted for about 1 percent of US energy needs) in March. Major EU countries, which have traditionally relied on Russian energy for as much as 40 percent and a third of their gas and oil deliveries, have followed suit, wreaking havoc on their own economies and exacerbating regional energy shortages already facing the bloc.

On Friday, energy specialists told Bloomberg that EU countries were chipping away at gas reserves held in underground gas storage facilities – reserves which are traditionally topped up in the summertime to prepare for a cold winter.

Last month, Spiegel Business explained that without Russian deliveries, EU countries were physically incapable of simultaneously filling up members’ underground gas storage facilities and continuing to operate industries.