Experts expect Putin will try to weaponize its energy resources

（单词翻译）

Experts expect Putin will try to weaponize its energy resources

Transcript¹

NPR's Steve Inskeep talks to Daniel Yergin, vice² chairman of S&P Global, about the impact of Russian President Putin's move to cut off gas to Poland and Bulgaria on Europe's energy economy.

STEVE INSKEEP, HOST:

At this dramatic moment, Daniel Yergin is with us. He's vice chairman of S&P Global and author of acclaimed³ books on the energy industry. He joins us via Skype. Mr. Yergin, welcome back.

DANIEL YERGIN: Thank you. Good to be with you today.

INSKEEP: We heard the Russia move called a warning shot. Europeans have also called it blackmail⁴. How would you describe it?

YERGIN: Well, I think it is a major sign that Putin just a couple of weeks ago said that Europe can't do without energy. I think he's demonstrating with this that he will use energy as a weapon or try to use it. But...

INSKEEP: Is it likely to work?

YERGIN: Well, I think in the case of Poland and Bulgaria, they have easy alternatives, so it really doesn't have much impact. In fact, Poland will buy gas from Germany, which actually will be Russian gas. But I think you have to assume that when Putin threatens things, he will act upon them in his current sort of crazed and irrational⁵ manner.

INSKEEP: That seems like a reasonable assumption, particularly after watching the invasion of Ukraine that seemed to make sense to no one else but that made sense to Putin, and then he went ahead with it. And yet I do notice that they have only cut off gas to two countries that did not use that much of it. Does that imply that Russia itself is afraid to go all the way?

YERGIN: Well, I think the - what's going on with the other countries is, can you find a way to - and some of them where you open a bank account at Gazprom Bank, which is part of Gazprom...

INSKEEP: Yeah.

YERGIN: ...The Russian energy giant, and you put euros there, and somehow they convert them. So it's an iffy situation right now. The European - EU telling companies, don't violate our sanctions. But I think that many companies will, if they can, open these accounts to keep the gas flowing for now. But as the German economics minister says, we have to be prepared for a larger cutoff and a larger - you know, that Putin will, you know, use the energy weapon, which is quite different from what has been Russia's brand for half a century, which is we're a reliable supplier. They're demonstrating that they're not a reliable supplier.

INSKEEP: Do you think it is likely that large European companies are going to go around the desire of their governments or the desire of the European Union and try to find some way to evade⁶ the sanctions?

YERGIN: I think that's already happening. I don't think they're going to do it against their governments; they're going to do it in consultation⁷ with their governments. I think Germany has very interestingly said that it could do without Russian crude oil, but it needs natural gas. And so I think no company will do this without the approval of their government.

INSKEEP: Is the energy weapon a weapon a little bit like nuclear weapons for Russia - they can't really use them without destroying themselves?

YERGIN: Well, I think Putin is - you know, is behaving in an apocalyptic⁸ manner. And his thesis now is that the West is out to destroy Russia. So he might do something like that. But I think that's the longer - the bigger point is that Europe - Russia is going to lose Europe as a market. The Europeans are determined⁹ to no longer be dependent upon Russian energy. Only question now is time, and I think that timeline has gotten shorter as this war has gotten more horrible. Putin is talking about, well, I'll shift my gas supplies to Asia. That will take a lot of time. And so I think, ultimately, he could be stuck with gas that he can't sell because of his actions. And by the way, when he does go to China and say, will you buy some more of my gas, the Chinese will drive a very tough bargain.

INSKEEP: Sure, because he doesn't have other customers. You said an interesting thing there, though, Daniel Yergin. You said that Europeans are already determined to shift away from Russian gas. Might take them a while, but they're determined to do it. I wonder if that becomes a part of Putin's calculations, then. I am recalling that before the invasion of Ukraine, Putin was threatened with all manner of sanctions and, at least in public, persuaded himself and said this explicitly¹⁰, the sanctions are coming anyway - in effect, they're going to go after us regardless, so we might as well invade. That was the logic¹¹ of that statement. Is it possible that could be the logic of Putin's thinking now? I'm going to lose this energy weapon eventually; I might as well use it.

YERGIN: Well, I think that's a very good point because, of course, up until recently, Europe has been talking anyway about leaving natural gas, moving more and more to renewables. He's decried¹² that. So he may actually say, well, we're not going to have this market there in five years anyway. So - but I think in the current situation, as the pressure - as Germany sends weapons now to Ukraine, the likelihood that he will strike back greatly increases. And I think the Europeans, whatever they say it may - they have to be prepared for that.

INSKEEP: Daniel Yergin, even before the developments of the last couple of days, you said that energy markets around the world were in crisis. And I do understand that there's a lot of pressure and that prices are up. But what do you mean by crisis?

YERGIN: Well, crisis means that prices - price of gas, natural gas in Europe, is five times normal, that the balance is very precarious¹³ in global markets because even before this war began, these markets were very tight. And crisis means disruption, means shortages. And I think that risk is there. What is happening - to me, what's got a lot of attention is the cutting off of gas to Poland and to Bulgaria. What's not gotten so much attention is that the German economic minister said, we can do without Russian crude oil in a matter of days. Three or four weeks ago, they said that wasn't possible. The German government has consulted very closely with energy companies and figured out, what are the alternatives? Where can you get supply from? So the one that they can deal with most successfully in short term is crude oil because there's a lot of other oil in the world. When you get to natural gas, you get to the kind of situation where, if Putin actually really acted upon it, you could shut down German industry if he really cut off gas.

INSKEEP: Who, if anybody, benefits from this crisis - Persian Gulf¹⁴ nations, China, somebody else?

YERGIN: Well, I think that China doesn't because it's paying higher energy prices, although with the shutdown, the lockdown in Shanghai and in Beijing, in a sense, their energy consumption is going down. Obviously, short-term revenues go up for energy companies, and it gives them more money to invest in alternatives. I think what you see Germany doing, something - they're saying now they're going to build terminals to receive natural gas, LNG from the United States, but it'll take a year or two to get those built. But I think that in the short term, what Europe has to do is look at what are alternatives to using natural gas and electric generation, which means a short-term expedient¹⁵, means using more coal.

INSKEEP: More coal.

YERGIN: Yes.

INSKEEP: And in spite of their desire to fight climate change, they might be going for more coal.

YERGIN: Well, I think you - that your language is right. You're fighting a war now, which is immediate¹⁶, and climate change is longer term. So I think they're going to have to do expedient things. And Germany is basically already doing that, saying, we're going to extend the life of our coal plants, at least till this conflict gets over.

INSKEEP: Coal industry could be a winner. Daniel Yergin, it's always a pleasure talking with you.

YERGIN: Thank you.

INSKEEP: Thank you so much. He's the vice chairman of S&P Global.

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