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Russian Invasion of Ukraine Drags on, European Countries Struggle to Maintain Energy Security

Analysis by Energy Workforce President Tim Tarpley

Energy Workforce President Tim Tarpley

As the Russian invasion of Ukraine extends well into its second year with little hope of a near-term solution, our European allies continue to struggle with how to provide energy security to their population without being able to rely on Russian natural gas. European leaders appear to be realizing that the current situation may become the new normal and that long-term solutions besides subsidizing high energy prices for their populations will need to be found. 

Germany has perhaps faced the most difficult situation in Europe. Germany has incurred a budget deficit of more than $130 billion in 2022 (129.3 billion euro) trying to provide emergency financial support for companies, households and local governments to get them through the energy crisis triggered by the Russian invasion.

The pressure is not only on the federal government — states and local jurisdictions are facing the same issues. The largest German state, North Rhine-Westphalia, home to 20 of the 50 largest German companies, was required to declare an “extraordinary emergency situation” to take on new debt and access more loans. Germany was forced to secure 270 billion euros, or close to $290 billion in total funds to get through the crunch. This is the highest in Europe, including the UK.   

Signals from German officials last week indicate that the fiscal pressure from these subsidies is not sustainable in the long term and other long-term options must be found. We can expect Europe to face increasing pressure in the coming months to continue to look for long-term LNG import contracts with the United States and other reliable long-term suppliers.

House Energy Package Moves Closer to Floor Vote

House Republicans spent the first part of this week huddling at a conference in Orlando for the annual retreat, but the later part of the week will be spent finalizing details of the large energy package, H.R. 1, which is expected to be on the floor for debate and votes next week. The House Rules committee is meeting this week to determine what amendments will be made in what order. This is worth watching as there will likely be an effort to include many energy-related provisions through amendments. A full rundown of any relevant amendments will be included in next week’s column.  

While it is important to monitor the package, H.R. 1 is very unlikely to be taken up by the Senate. The best chance of anything seeing Senate floor action would be a bipartisan compromise on permitting reform, with many of the other elements not likely to move forward or become law.      

Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.



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