Wednesday, March 02, 2022

Ukraine 02

With energy prices having risen a long way through 2021 and now rising faster still, and long term contracts only indirectly reflecting the spot prices, it's hard to know just how much western countries are paying Russia for their oil and gas imports, but a conservative estimate puts it around half a billion dollars per day, over $150 billion annually. To put that in perspective, Russia's annual expenditure on its military is around $60 billion.

We are paying Russia more than twice what they spend on their armed forces.

Governments fret about money held by oligarchs and create restrictions on air travel; civil society and business reduce sporting and cultural contact and withdraw from investments. But all this is detail, irritations that Putin will have factored in to his diabolical scheme. The big one is an embargo on energy imports. 

Western governments, perhaps unsurprisingly, are reluctant to plug the pipelines, fearing that energy prices will soar and real shortages will occur. A friend of mine just commented "For millions of people gas or oil is their only source of heating in the EU". I replied "For millions of people their home is their only home and the Russians are bombing it".

It's good and kind that people are donating their stuff and their money to help Ukrainians, but the real difference we can make is to stop buying their gas and oil. Governments must see to an embargo, but while they look for the political support to act we can show them by using less ourselves. That sends two signals, one to government, to indicate public support for action, and another to the market to reduce the price by lowering demand, and incidentally giving some relief to those least able to afford expensive energy.

We should turn down our thermostats and reduce our travel. That may be hard for some but nothing in comparison to the suffering in Ukraine. If we want to stand with the Ukrainians, as slogans and headlines proclaim, then we need to share the pain and stop benefitting from Russian energy imports.

And, in case it slipped from your attention, there's a Climate Crisis. We'd best get used to not using gas and oil.



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