The Institute of North American Studies (IEN) celebrated the second edition of the USA & EU Barcelona Meeting this March, an annual event through which the foundation seeks to reflect on and study aspects of politics, technology, culture, history, science and society that condition relations between Europe and the United States. With the title The geopolitics of energy after Ukraine, the IEN has dedicated this year’s Meeting to analyzing how the armed conflict in Ukraine has marked the geopolitics of energy in the European Union and the United States. It took place at Palau Macaya in Barcelona, ​​in front of a full auditorium and with contributions of international experts and EU political leaders.

To begin the event, which was held on March 9, the opening speaker was Andreu Mas-Colell, a member of the IEN’s board of trustees, economist and emeritus professor at Pompeu Fabra University (UPF) and the Barcelona School of Economics (BSE). In a brief welcome speech seeking to contextualize the USA & EU Barcelona Meeting program for the attendees, Mas-Colell recalled that the IEN was founded at the beginning of the 1950s, in the middle of the Franco era, with the aim to walk towards “an open and democratic society”, mirroring the United States and Europe. In this sense, he emphasized that the annual series of conferences is perfectly aligned with the spirit of the entity: to address the transatlantic relations between Europe and the United States.

Then, continuing with the opening speeches, Mas-Colell gave the floor to Katie Stana, Consul General of the United States Consulate General in Barcelona. Broaching the topic at hand, Stana recalled that, this past February 24, it has been one year since the outbreak of the war between Ukraine and Russia. The Putin regime’s “brutal full-scale invasion has caused incredible suffering for the Ukrainian people” and has had a global impact, also for the United States, she assured. Addressing the issue from an energy perspective, the consul general recalled that the conflict has brought forward “the need to diversify supplies and accelerate the energy transition towards a lower carbon future”. In the same vein, she insisted that the world is immersed in “the most significant moments in the history of energy… aiming for a global system where clean energy and access are widespread and affordable across all regions and all sectors, as quickly and efficiently as possible, which will also require new supply chains that are resilient, secure and diversified so that we’re not in a position where a single bad actor can disrupt supplies.” To deal with this scenario, the United States has approved the Inflation Reduction Act, which provides mechanisms to accelerate the country’s energy transformation. “True energy security will only be achieved through clean energy transition that moves all of our countries away from unabated fossil fuels towards a future energy system that utilizes locally available resources like hydro, wind, solar or geothermal,” she elaborated. Stana closed her speech with a reminder that the energy transition “won’t be easy, but if we don’t address this today, the consequences for tomorrow will be dire”.

After Stana, it was Sofia Geli Stenhammar’s turn, honorary consul general of the Honorary Consulate General of Sweden in Barcelona, ​​the country which, from January 1st until June 30th of this year, holds the presidency of the Council of the European Union. “We are facing a situation that requires urgent attention and action,” she began, referring to the global consequences of the conflict in Ukraine. “Sweden assumes the presidency at a time of economic insecurity, geopolitical turbulence and historic challenges for member states and the EU”, she continued. One of the situations that is marking the European agenda is the energy crisis. “Measures are currently being considered to mitigate the short term challenges but it is important not to lose the long term perspective and not undermine future European competitiveness,” she stressed. As such, she reminded the public that Sweden is focusing its presidency on addressing four priority areas: external security, internal security, the energy transition and the maintenance of democracy. “In particular, the EU is a world leader in the transition to the green economy and Sweden wants to reinforce this position during its presidency,” she emphasized. In order to do this, she agrees with Stana: it is necessary to diversify energy sources, invest in creating new technologies and infrastructures that allow them to be stored, and reduce dependence on fossil fuels. “We pledge to prioritize the well-being and energy of our citizens, promote sustainability and uphold out shared values,” she concluded.

The war in Ukraine and its impact on the energy sector

The first session, titled The Impact of Russia’s War on the Energy Sector in the EU and US, sought to address the changes experienced in the world’s status quo since the beginning of the conflict on February 24, 2022. Specifically, it provided attendees with an overview of the European and American responses to the large-scale Russian invasion and Russia’s weaponizing of energy, as well as the consequences this has had for the economies and populations of Europe, the United States, and beyond the transatlantic area. The speakers were Katja Yafimava, Senior Research Fellow on the Oxford Institute for Energy Studies; Ana María Sánchez Infante, Policy Officer – Energy Platform Task Force – DG ENER – European Commission, and Ben Cahill, Senior fellow in the Energy Security and Climate Change Program at the Center for Strategic and International Studies (CSIS). Each made an initial speech and then it was time for questions from the attendees, moderated by Jeffrey Michaels IEN Senior Fellow, Institut Barcelona d’Estudis Internacionals (IBEI).

In the first presentation, Katja Yafimava outlined the outbreak of the energy crisis, from the second half of 2021 to the present day. “The crisis was a perfect storm of all different factors coming into play at the same time” that have caused European energy supply and demand to be out of sync, she summed up just after taking the floor. According to this expert, the main cause has been the sudden reduction in gas from Russia, which arrived to Europe through four major corridors. This includes Belarus, which is still working; the Nord-Stream, which stopped working due to sabotage; the Turkish one, which supplies southern Europe, and the Ukrainian one, which continues to operate, but is located in a zone of armed conflict. Europe “compensated for the loss of supplies by increasing sharply energy from all over the globe, mostly from the United States and Qatar,” she clarified. However, the energy crisis has also been alleviated thanks to other factors. We had a “relatively mild winter, which meant that demand fell quite sharply,” she offered as an example. For Yafimava, this has been a key element. “Although Europe has been successful in averting the worst, so the impact wasn’t as bad as one might have expected, we shouldn’t be complacent because Europe now faces the challenge of refilling its storages ahead of next winter,” she highlighted. In this sense, the panelist emphasized the European efforts to aid its people and the production framework to cope with the increase in energy prices. “Europe emerged relatively unharmed but prices are pretty high. European governments did provide cushion, but we should not underestimate,” she predicted. “There could be quite difficult challenging times ahead.” 

Next up was Ana María Sánchez Infante, policy officer of the European Commission’s Energy Platform Task Force. In her presentation, the expert from the European Commission reviewed the measures taken by the European Union to deal with the energy shortage situation. At the outbreak of the conflict “the commission came up with a quick reaction with the preannouncement of the Repower EU plan, which we officially published on the 18^th of May, in record time” she contextualized. According to this expert, this fact corroborates that, “in an emergency we are all acting and reacting with a sense of union among the member states”. Broadly speaking, the plan seeks to end the EU’s energy dependence on Russian fossil fuels and accelerate the transition to clean energy. “We want to reduce dependency on Russian fossil fuels in a very quick manner; acceleration of the implementation of renewable energies; increasing energy efficiency and diversifying our energy suppliers”, she specified. The speaker also recalled the efforts made by the European Union to reduce the gas demand of the member states, which was achieved, as well as the streamlining of the procedures to speed up the granting of permits to create new plants generating clean energy. “We came through with a lot of sacrifices from all of us, but this is not over yet because now our main concern is the preparation for this winter,” she concluded.

The last speaker of the first session was Ben Cahill, Senior fellow in the Energy Security and Climate Change Program at the Center for Strategic and International Studies (CSIS). In his case, he focused his speech from the American point of view, explaining how the United States has contributed to alleviating the global energy crisis. “The strategic importance of U.S. natural gas and oil exports is clear to the global market. It’s been a huge source of global energy security,” he began. In this sense, he explained how the United States is investing to gain ground in exports of liquefied natural gas, an energy source that has been key to sustaining European energy demand. “The U.S. LNG export industry only started in the year 2016. At the moment the U.S. is one of the three largest producers in the world, alongside Qatar and Australia,” he pointed out, “very soon it will be the largest, we have a wave of projects coming online around 2025 and 2026,” he went on. For Cahill, the United States has played a key role in dealing with the energy consequences of the conflict in Ukraine. “The situation has been quite difficult but it would have been much harder without U.S. LNG,” he assured. The expert also opined on the price limits on barrels of Russian oil, a ceiling that stands at 60 dollars. “This new mechanism has avoided a shortage and a price spike but also driven down the revenue that Russia gets for every barrel”, he analyzed. According to Cahill, the United States and the European Union need to come together in the fight against climate change, with shared goals.

The energy sector, with an uncertain future

With the title Looking towards the future of the energy sector, the second session took a long-term view and made it possible to address the implications that global geopolitics and the energy sector will have in the future. Specifically, it served to analyze the effects that Russian energy independence may have on future EU and US energy policies in areas such as supply diversification, energy efficiency measures and emphasis on green and renewable energy, among other topics. Manuel Rivas, Market Analysis Team Leader of the Chief Economist of DG Energy, of the European Commission, Anna Mikulska, resident fellow in energy studies for the Center for Energy Studies at Rice University’s Baker Institute for Public Policy, and Nicholas Crawford, Research Associate for the Geo-economics & Strategy Research Programme at the International Institute of Strategic Studies (IISS) took part. Each made an initial speech and then it was time for questions from the attendees, moderated by Victor Burguete Senior Research Fellow in Global Geopolitics and Security at CIDOB (Barcelona Center for International Affairs).

To open the second session, Manuel Rivas focused his presentation on explaining, through data, the magnitude of the global energy crisis and how it is impacting the European energy market. “These increases in prices are unprecedented, unprecedented to the point that some experts say it is comparable to the oil crisis of the 1970s,” he pointed out. Now, however, the epicenter is the gas, he added. According to this expert, “The decrease in pipeline flows from Russia was a weaponization of energy, with the imposition to the member states to pay in rubles, then in problems with the Nord-Stream pipeline.” Rivas also outlined one of the key factors that, according to him, have helped Europe stop the Russian energy coup: “We had to replace Russian gas – a very important part of our gas consumption – through policy and outreach to suppliers other than Russia, from Norway and the U.K.” US liquefied natural gas also played a key role. “LNG represented 15% of the European supply and now it’s 30%,” he calculated. “Without that we wouldn’t have been able to get through the crisis without shortages,” he stated. He also issued a warning. “Europe will need LNG for a long time, we must have the capacity to absorb it and inject it into our system,” he added. However, Rivas was hopeful. Since this winter has been mild, restocking this summer’s gas stocks for next winter shouldn’t be too difficult. “We are going to end this winter with stocks that will be close to 60%,” he quantified. Looking at the long term, Rivas explained that it is complicated to venture into making predictions, but he does predict the rapid reduction of gas consumption and its replacement by energies such as wind and solar. “Probably after 2025, there will be significant amounts of biomethane and hydrogen produced from renewable sources,” he concluded.

Then, it was the turn of Anna Mikulska, resident fellow in energy studies at the Center for Energy Studies of the Baker Institute for Public Policy at Rice University. The expert was in charge of addressing the issue focusing in particular on the geopolitical dimension. Just as with the oil crisis of the 1970s, states are once again asking themselves: will we have secure access to energy? she contextualized. Regarding the availability of gas, Mikulska emphasized the need to have an infrastructure that allows gas to be stored in European territory. “There is a need for a huge amount of infrastructure,” she insisted. At the same time, she pointed out that, in the case of gas, Russian regions such as Siberia are only connected to Europe and that, therefore, it is not easy for Russia to redistribute it to other countries. Regarding the import of liquefied natural gas from the United States, the expert recalled that a lot has entered the market, but that if more is to be produced, an important hurdle must be overcome. On the one hand “without contracts, US companies that have projects permitted  are not able to start them. They need to go to banks and ask for loans but the loans are not going to be given to them unless they already have these customer,” explains Mikulska. On the other hand, “EU companies do not like to sign longer contracts because they are not sure if gas is going to be used in Europe for 20 to 25 years,” because of the energy transition or because the situation with Russia may change, she added, and concluded her presentation with a note on coal. “Renewable energy production must grow, but coal will continue to be used, because it is the most democratically distributed energy source around the world, also in less developed countries. “

Finally, Nicholas Crawford, research associate of the Research Program in Geoeconomics and Strategies at the International Institute of Strategic Studies (IISS) spoke, basing his speech on the proliferation of the use of clean energies in Europe . “The energy crisis, partly as a result of the war in Ukraine, has encouraged Europe to invest and accelerate the transition towards renewables”, he assured at the outset. However, he reminded the audience that the process is not fast. “For some offshore wind projects in Europe, it can take between 10 to 15 years from the signing of a lease to the windfarm actually becoming operational,” he offered as an example. In the case of industries that use large amounts of energy, such as chemical industries or steel, the expert pointed out that the solution for them to transition will be through the adoption of green hydrogen as an alternative.  He warned  that although a lot is already being invested in this new energy source, getting the productive system to adapt to it will also take time. Since the price of energy in Europe is very high, some of these industries are starting to consider moving production to places like the United States, where the situation is more advantageous. Crawford also spent a few minutes analyzing the Inflation Reduction Act promoted by the United States and warned of possible disruptions to the energy market. Since they will heavily subsidize the use of clean energies, it may happen that employers decide to invest in the creation of new plants there before in Europe. The expert also pointed out that it could cause deindustrialization in Europe. Even so, he believes that the law will not have as much impact in Europe as some experts predict. And added that Europe has accelerated the training of the workforce to produce clean energy; with the renewable energy goals that Europe and the United States have set, there will be a market for investment in both; and many of the products that subsidizes American law are difficult to offload. Crawford closed the presentation by assuring that in the case of hydrogen, the situation is indeed more worrying: American subsidies give entrepreneurs a very large incentive to go and produce it there, because they will be able to make an immense profit.

Joan F. Corona Ramón, president of the IEN, was in charge of closing out the day, and thanked all those present, as well as the contributions of the speakers. Corona closed the day by announcing the third edition of the USA & EU Barcelona Meeting, which will be held in March 2024.