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Davos 2022: We are in the middle of the first global energy crisis. Here’s how we can fix it


The world is in the middle of its first truly global energy crisis. The answer is not additional fossil fuels, but instead putting efforts into the energy transition, according to the Executive Director of the International Energy Agency.

Fatih Birol told the Energy Outlook: Overcoming the Crisis panel on the opening morning of Davos 2022, that the world needs to make energy investments that look beyond the immediate term and are viable for the future.

The global energy landscape has been radically reshaped since the Russian invasion of Ukraine on 24 February, prompting governments, businesses and other organizations to reduce their dependence on Russian energy. Now they need to prioritize bringing to a halt the energy crisis and provide greater energy security and sustainability.

“We are in the middle of the first global energy crisis. In the Seventies, it was the oil crisis and now we have an oil crisis, a natural gas crisis, a coal crisis – all prices are skyrocketing and energy security is a priority for many governments, if not all,” Birol told the panel.

“Of course, we are not living in a dream world. The world has to replace the oil and gas from Russia with first oil and gas and then other technologies. I completely agree that the immediate response should include bringing additional oil and gas into the markets. But I would prefer that our immediate response does not look into our energy infrastructure for fossil fuels for many years to come.”

Key to alleviating the current energy crisis, he said, is to make the most out of the existing oil and gas fields, plus using shale oil and gas because it’s quick to come to market, as well as reducing the amount of methane emissions from fossil fuel operations and ensuring that liquefied natural gas terminals are built to store ammonia or hydrogen in the future.

“But, in my view, the biggest part of the response comes from putting emphasis on clean energy, renewables, energy efficiency and, in the countries where they have nuclear capacity, increasing nuclear production there,” he added.

“We don’t need to choose between an energy crisis and a climate crisis – we can solve both of them with the right investment.”

Germany is one of the countries which had been badly hit by a dependence on Russian gas. Robert Haback, Federal Minister for Economic Affairs and Climate Action, acknowledged that this had been a strategic error and told the panel that the country is ready to fight the energy crisis and is now looking to diversify its fossil fuel imports at incredible speed – with processes that once took decades now taking months.

“We are really improving our ability to get things done, which hasn’t been done so good in the past. We are building up energy infrastructure and trying to get new suppliers for oil and coal,” said Haback.

“But this is only short term, of course. It is only one step in the direction to become not only independent of Russian fossil fuels, but of fossil fuels. From my point of view, caring about a new security of energy supply is not a contradiction to the greater goal of getting independent from fossil fuels at all.”

Haback added that global security has been rocked by at least four interwoven crises – high inflation, the energy crisis, food poverty and the climate crisis. “And we can’t solve the problems if we only focus on one,” he warned.

The panel concluded that collaboration and tackling the energy crisis needed to be done alongside action on issues such as the rising cost of living. “All stakeholders in the global system need to do some serious introspection and subject whatever they’ve been saying and doing to a reality check,” said Puri in his closing remarks.

“We need to deal with all these crises simultaneously, without allowing the solution of one crisis to exacerbate the other crisis. You’ve got to navigate your way out of the high-cost situation – this is not sustainable – at the same time you have accelerate the green energy transition.

“Taken together, yes, we will come out of it. The cost will be there, there will be pain. But at the end of the day, we’ll be working towards a better energy world.”