U.S. Markets open in 6 hrs 51 mins
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Vladimir Putin is ‘using energy’ to cause political discord in Europe: Expert

In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Daniel Yergin, S&P Global Vice Chairman and Author of The New Map: Energy, Climate, and the Clash of Nations, joins Yahoo Finance Live to outline the geopolitical pressures building in Europe as the Nord Stream pipeline re-opens, the EU's push for a price cap on Russian oil, and the ongoing climate crisis.

Video Transcript

[MUSIC PLAYING]

DAVE BRIGGS: Parts of Europe are battling a heat wave, and subsequently, several wildfires in the US. Temperatures in the mid to upper 90s. And low triple digits are expected today and Friday. All of this complicates an already tough global energy crisis. Russia's invasion of Ukraine has upended markets. The EU on Wednesday called on its members to ration natural gas in anticipation that Russia could cut off the flow to Europe entirely.

Joining us now is Daniel Yergin, vice chairman of S&P Global and the author of "The New Map, Energy Security and the Clash of the Nations." Nice to see you. So we mentioned how dire things already were prior to this heat wave in Europe. What are the consequences in the immediate future of that?

DANIEL YERGIN: Well, in the immediate term, it means that they're using more natural gas now. And but the game is really about the winter. It's assuring that there's enough gas in storage to get through the winter, which is what the Europeans, led by the Germans, are trying to do. You know, Vladimir Putin has really extended the war in Ukraine to a second front, which is the energy front in Europe.

And he's trying to not have-- enable them to achieve what they need, drive up prices, break the coalition. And look at what's happening in Britain. Look what's happening in Italy. These political coalitions are-- governments are breaking. And that's what Putin wants to see. And he's using energy to get there.

SEANA SMITH: You know, Daniel, we've heard from the IMF. They're saying that further disruption in the natural gas supply to Europe could plunge many economies into recession, triggering a global energy crisis. I guess the question is, how much worse could it potentially get over the next couple of months?

DANIEL YERGIN: Well, first, let me say the IMF needs to be brought up to date. We are in a global energy crisis, which has been compounded by a global geopolitical crisis. And your question is quite right. How much worse can it get? I think it actually could get worse. The German economics minister, who's agreeing, has warned that it could lead to a Lehman-style contagion. More likely, it would be a deep recession, because it would radiate out from Europe to the rest of the global economy. This is a very unusual situation that, really, none of these leaders have had to navigate before.

RACHELLE AKUFFO: So how much pressure is this putting on countries to reassess energy security? And what does resilient energy security look like in the aftermath of what we're seeing with Russia and the Ukraine?

DANIEL YERGIN: Well, I think both in North America, the United States, and in Europe, there's been amnesia about energy security. And I think the amnesia is over. The German, again, economics minister was a leader of the greens, has said there's no black or white on energy. There are only grays, and recognizing that at this point, the world operates 82% on fossil fuels, hydrocarbons. And you have to assure them. You can't have energy transition without energy security.

So there's Germany now pushing for LNG receiving stations. There is the British government, which had refused to give a permit to drill for natural gas last year in the North Sea, now giving the permit. And there's the Biden administration asking US oil and gas producers to produce more. So the turnaround is here that you have to pay attention to energy security, as well as energy transition issues.

DAVE BRIGGS: You mentioned the brutal winter that lies ahead in Europe. In the short-term, they're looking at, again, we mentioned the rationing, cutting 15% of their use. In the long-term, though, have they found any solutions? Have they learned anything from their dependency on Russian oil and gas?

DANIEL YERGIN: Well, one of the big changes is they now look on US LNG. And the US was slated to be the world's largest exporter of LNG this year as a source of security to them. And I mean, we have a big conference in Houston. The Europeans were there in force, looking for American companies to connect with to get LNG supplies. So there's a focus on diversification. They're going to Africa, looking for additional supplies.

So I think this is not a long-term problem, but it's going to be a short-term problem and one that they're deeply, deeply worried about. And of course, it's not just about economics, as important as that is. It's also about geopolitics and the coalition supporting Ukraine. But certainly, they're looking for changing attitudes towards assuring the energy supplies, even as they also seek to step up their commitment to renewables.

SEANA SMITH: And Daniel, while we have you, we had Congressman Ro Khanna on the show yesterday, shortly after President Biden announced new climate programs. But he did stop short of declaring a climate emergency. And I bring this up at a time when there's so much debate here in the US about what should be done at this time to better position us for the future of energy. I want to play a quick clip of what he had to say about what President Biden announced yesterday.

RO KHANNA: He needs to declare a climate emergency. I mean, and I'm glad that he is highlighting what he's doing, but we need to do more. The declaration of a climate emergency will give him the authority to put more funds into solar, wind, renewables. It will give him the authority to stop the permitting for projects that are going to emit tremendous amounts of CO2. So he needs to make that declaration.

SEANA SMITH: So, Daniel, looking at the energy crisis--

DANIEL YERGIN: Well, let me--

SEANA SMITH: --today--

DANIEL YERGIN: --jump in on that.

SEANA SMITH: Yeah, go ahead.

DANIEL YERGIN: If I can jump in on that. I mean, the IPCC says this is a long-term problem. And we're looking to 2050. We just did a study on copper. There isn't enough copper to meet the goals of 2050 to stop permitting for-- the administration wants more energy right now. And by the way, the US is already pouring a lot of money into renewables and a lot of regulations in it. Most utilities now, their new capacity is going to be wind and solar. But then you have the problem about intermittency and the risk of brownouts and blackouts.

So, you know, why is it an emergency now, and not last year or not next year? I mean, these are long-term problems to be addressed. And by the way, you need to have the solutions to them at hand. But if you want to buy an electric car, you can get a lot of subsidies to encourage you to do that right now.

SEANA SMITH: So then, Daniel, is there anything that the Biden administration should be doing right now today in your perspective, then, to help with this current situation?

DANIEL YERGIN: Well, I think the current situation is the tight supply. You know, consumers are also voters. And if you have $6 or $5 gasoline, you're not going to get elected people who want to declare a climate emergency. I think that they really have to do two things at the same time-- continue to pursue their policies around climate, and at the same time, ensure that we have adequate production for a world in which oil demand is going up, not down.

And the US, by the way, has gained its influence in the world because of our energy position. If you put the brakes on it right now, you're putting Europe into the arms of Vladimir Putin. And I don't think anybody wants to do that. We are a very important source of security to the Europeans right now because of our ability to produce oil and natural gas.

RACHELLE AKUFFO: Indeed. Well, we do thank you for joining us today. Daniel Yergin there. Thank you for joining us on Yahoo Finance.