The Russian invasion of Ukraine has continued to have major impacts on the world of energy, as the human tragedy grows more horrendous by the day. Amongst the stories have been:

• The EU resolved to end imports of Russian fossil fuels by “well before 2030”, and to reduce imports of Russian gas by two-thirds by the end of this year, as part of its RePowerEU plan, which is to build on last year’s ‘Fit for 55’ green plan. Poland and Slovakia had argued for an immediate ban; Spain and France were open to the idea, and Germany, Hungary, Bulgaria and Finland were against it, while other European countries were on the fence, as Euractiv reported. The various positions roughly followed the level of dependence on Russian fossil fuels on the one hand, and the capacity for sourcing alternative supplies on the other. European Commission climate chief Frans Timmermans said that it “is not a free market if there is a state actor willing to manipulate it. The answer to this concern for our security lies in renewable energy and diversification of supply”. In other remarks, EC president Ursula von der Leyen said that a plan to reduce the impact of price rises on household energy bills would be released in March.
• After putting an indefinite halt on the Nord Stream 2 project, Germany announced that it would bring forward its plans to fulfil all electricity needs from renewable energies to 2035, rather than “well before 2040”. While the difference may be semantic, the announcement aims to send a signal that Germany will make a strong effort to end its dependence on Russian fossil fuels as soon as possible. Currently, around 55% of the gas it uses comes from Russia, 50% of its hard coal, and 30% of its oil. The German government also made a preliminary assessment of the possibility of extending the life of its three remaining nuclear power plants, which are due to close this year, but concluded that it would “not help us” (though it is still ‘on the table’). What is more sure is that legal changes will be made to introduce a ‘strategic reserve’ for natural gas (as it already has for oil). An interesting Deutsche Welle article also relates that the life of some coal-fired power plants may be extended, though this would have to conform to the new 2035 timeline for 100% renewables.
• Meanwhile, the entire staff of former German Chancellor Gerhard Schröder, who is chairman of Rosneft and of Nord Stream AG, quit in protest at Mr Schröder’s reluctance to criticise Vladimir Putin (said to be a close friend) for the invasion of Ukraine. In addition, the Swiss-based Nord Stream 2 AG company set up to manage the Nord Stream 2 project filed for insolvency and fired its entire staff.
• The USA and the UK both banned imports of Russian oil, while the USA also banned the import of Russian natural gas (though it wasn’t importing any) and coal, as well as new US investment in the Russian energy sector, and the financing or foreign companies that invest in Russian energy production. Both countries import only a small share of their oil from Russia (8% for the UK, 3% for the USA); the UK will phase out Russian oil imports over the course of this year, while the USA’s ban is immediate. The UK was also reported to be blocking Russian-associated vessels from its ports. Australia, also a minor importer of Russian oil, banned imports too, to take effect after 45 days.
• The Biden administration has been working on securing oil imports, or greater levels of production, from countries such as Venezuela, Saudi Arabia and the United Arab Emirates, and may also try to source oil from Iran, in a number of diplomatic pivots.
• UK Prime Minister Boris Johnson said his government would consider resuming allowing domestic fracking as an energy supply option.
• Canada applied a 35% tariff on imports of the bulk of Russian and Belarussian products into Canada (including oil). The only other country to face such tariffs is North Korea.
• Oil prices remained above US$100/barrel (at one point approaching $140/barrel), while European gas prices hit record highs. The Dutch front-month gas contract at the TTF hub hit a record intra-day high of €185/tonne, above the previous record of €184.95/tonne in December last year.
• There was widespread criticism of Russia after its military shelled the largest nuclear power station in Europe, the six-unit Zaporizhzhia Nuclear Power Plant, damaging buildings and leading to a fire. The International Atomic Energy Agency reported that none of the safety systems at the plant were affected and no radioactive material was released.
• Further concerns were raised about the Chernobyl nuclear power plant, after power to it was cut off for a number of days, meaning that cooling water pumps were at risk of losing power, as the back-up diesel generator was estimated to have only a day’s worth of fuel. Power was reported to have been restored, however.
• The Okhtyrka thermal power plant, near the city of Sumy, was destroyed.
• At the CERAWeek conference in Houston, Texas, one of the flagship oil and gas conferences of the year, speakers decried Russia’s invasion of Ukraine, and also eyed opportunity, according to the Financial Times. US Secretary of Energy Jennifer Granholm told the conference that “We could not be having this conversation at a more intense, troubling, shocking time in world history, with enormous consequences for the future of energy.” Climate envoy John Kerry urged attendees not to let the war in Ukraine distract them from action on climate change. Ryan Lance, chief executive of ConocoPhillips, said that while before the beginning of the war in Ukraine, there was little “conversation” going on between the Biden administration and the oil and gas industry, “that has ramped up as this whole conversation around national security and energy security is clearly moving to the forefront.” Interestingly, despite high oil prices, producers are reportedly finding it difficult to obtain finance to increase production. Canadian producers suggested that approvals of pipelines such as Keystone XL would allow greater supply from a friendly neighbour, and permitting is reportedly “on the table” of the Biden administration.
• German power utility Uniper, owned by Finland’s Fortum, announced it would write off around €1 billion as a result of the suspension of the Nord Stream 2 pipeline. Three of the other four European investors in Nord Stream 2 – German group Wintershall Dea, UK-listed Shell and Austria’s OMV – announced similar measures. At the beginning of Russia’s invasion, Uniper’s share price fell by around 40%, though it recovered about 6% after its write-off. Uniper also said it wanted to build an LNG import terminal in Wilhelmshaven on Germany’s North Sea coast, would gradually move to greener alternatives to natural gas, and would end coal imports from Russia by the end of the year.
• BP announced it would exit its 19.75% holding in Rosneft, Russia’s largest oil producer. Current BP chief executive officer Bernard Looney and former chief executive Bob Dudley both resigned from Rosneft’s board.
• Shell stated “its intention to exit its joint ventures with Gazprom and related entities, including its 27.5 percent stake in the Sakhalin-II liquefied natural gas facility, its 50 percent stake in the Salym Petroleum Development and the Gydan energy venture. Shell also intends to end its involvement in the Nord Stream 2 pipeline project.” CEO Ben van Beurden said that the company was “shocked by the loss of life in Ukraine, which we deplore, resulting from a senseless act of military aggression which threatens European security”. The company noted that its investment in Russia amounted to around US$3 billion and that it expected to lose money in selling its assets. Last week, however, Shell bought a cargo of Russian crude oil at a US$28.50/barrel discount, a spokesperson saying that “we currently purchase it and other Russian products for some refineries and chemical plants to ensure that we continue the production of essential fuels and products that people and businesses rely on every day… we will further reduce our use of Russian oil as alternative crudes become available to buy … in the current, tight market there is a relative lack of alternatives.” Though the purchase did not violate sanctions, Shell later apologised for the purchase and declared it would end all Russian oil and gas purchases.
• Equinor, saying it was “deeply troubled by the invasion of Ukraine”, also said it would exit current joint ventures in Russia (with a value of US$1.2 billion), and not invest any further in the country. It had been operating in Russia for 30 years.
• ExxonMobil, which operates the Sakhalin-1 oil and gas production project in Russia’s far east “on behalf of an international consortium of Japanese, Indian and Russian companies”, said it would disengage itself, as it deplored Russia’s “military action”. It added it would not invest in any new projects in Russia given “the current situation”.
• France’s TotalEnergies released a statement condemning “Russia’s military aggression against Ukraine” and stating its solidarity with “the Ukrainian people who are suffering the consequences and with the Russian people who will also suffer the consequences”. It said it would comply with the sanctions imposed on Russia “regardless of the consequences” (to itself as a business) and that it would “no longer provide capital for new projects in Russia”.
• Lukoil, Russia’s second largest oil producer, released a statement calling for a “fast resolution of the military conflict” between Russia and Ukraine, saying that it supported “resolution through negotiations, by diplomatic means”. The statement raised some eyebrows, being the first from a major Russian company.
• European football association UEFA ended its sponsorship deal with Gazprom “effective immediately”. The deal was estimated to be worth around €40 million annually.