energy crisis assignment

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• 16 December 2022

Energy crisis: five questions that must be answered in 2023

• Andreas Goldthau 0 &
• Simone Tagliapietra 1

Andreas Goldthau is a professor at the Willy Brandt School of Public Policy, University of Erfurt, Germany, and research group lead at the Institute for Advanced Sustainability Studies, Potsdam, Germany.

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Simone Tagliapietra is a senior fellow at Bruegel, Brussels, Belgium, and a professor of energy, climate and environmental policy at the Catholic University of Sacred Heart, Milan, Italy.

A rig operator guides a drilling pipe at a gas production facility near Lensk, Russia. Credit: Andrey Rudakov/Bloomberg via Getty

Energy markets have been on a roller-coaster ride this year. In response to Russia’s invasion of Ukraine, Western countries imposed financial sanctions on Russia and embargoed its oil exports. Russia cut its gas supplies to Europe in retaliation. Major importers such as Germany had to slash their energy use and look elsewhere for supplies. Low- and middle-income nations struggled to access affordable energy. Countries including Pakistan, Bangladesh and Sri Lanka faced blackouts; fuel price hikes spilled over into food markets.

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Nature 612 , 627-630 (2022)

doi: https://doi.org/10.1038/d41586-022-04467-w

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How the energy crisis started, how global energy markets are impacting our daily life, and what governments are doing about it

Global Energy Crisis

• English English

What is the energy crisis?

Record prices, fuel shortages, rising poverty, slowing economies: the first energy crisis that's truly global.

Energy markets began to tighten in 2021 because of a variety of factors, including the extraordinarily rapid economic rebound following the pandemic. But the situation escalated dramatically into a full-blown global energy crisis following Russia’s invasion of Ukraine in February 2022. The price of natural gas reached record highs, and as a result so did electricity in some markets. Oil prices hit their highest level since 2008. 

Higher energy prices have contributed to painfully high inflation, pushed families into poverty, forced some factories to curtail output or even shut down, and slowed economic growth to the point that some countries are heading towards severe recession. Europe, whose gas supply is uniquely vulnerable because of its historic reliance on Russia, could face gas rationing this winter, while many emerging economies are seeing sharply higher energy import bills and fuel shortages. While today’s energy crisis shares some parallels with the oil shocks of the 1970s, there are important differences. Today’s crisis involves all fossil fuels, while the 1970s price shocks were largely limited to oil at a time when the global economy was much more dependent on oil, and less dependent on gas. The entire word economy is much more interlinked than it was 50 years ago, magnifying the impact. That’s why we can refer to this as the first truly global energy crisis.

Some gas-intensive manufacturing plants in Europe have curtailed output because they can’t afford to keep operating, while in China some have simply had their power supply cut. In emerging and developing economies, where the share of household budgets spent on energy and food is already large, higher energy bills have increased extreme poverty and set back progress towards achieving universal and affordable energy access. Even in advanced economies, rising prices have impacted vulnerable households and caused significant economic, social and political strains.

Climate policies have been blamed in some quarters for contributing to the recent run-up in energy prices, but there is no evidence. In fact, a greater supply of clean energy sources and technologies would have protected consumers and mitigated some of the upward pressure on fuel prices.

Russia's invasion of Ukraine drove European and Asian gas prices to record highs

Evolution of key regional natural gas prices, june 2021-october 2022, what is causing it, disrupted supply chains, bad weather, low investment, and then came russia's invasion of ukraine.

Energy prices have been rising since 2021 because of the rapid economic recovery, weather conditions in various parts of the world, maintenance work that had been delayed by the pandemic, and earlier decisions by oil and gas companies and exporting countries to reduce investments. Russia began withholding gas supplies to Europe in 2021, months ahead of its invasion of Ukraine. All that led to already tight supplies. Russia’s attack on Ukraine greatly exacerbated the situation . The United States and the EU imposed a series of sanctions on Russia and many European countries declared their intention to phase out Russian gas imports completely. Meanwhile, Russia has increasingly curtailed or even turned off its export pipelines. Russia is by far the world’s largest exporter of fossil fuels, and a particularly important supplier to Europe. In 2021, a quarter of all energy consumed in the EU came from Russia. As Europe sought to replace Russian gas, it bid up prices of US, Australian and Qatari ship-borne liquefied natural gas (LNG), raising prices and diverting supply away from traditional LNG customers in Asia. Because gas frequently sets the price at which electricity is sold, power prices soared as well. Both LNG producers and importers are rushing to build new infrastructure to increase how much LNG can be traded internationally, but these costly projects take years to come online. Oil prices also initially soared as international trade routes were reconfigured after the United States, many European countries and some of their Asian allies said they would no longer buy Russian oil. Some shippers have declined to carry Russian oil because of sanctions and insurance risk. Many large oil producers were unable to boost supply to meet rising demand – even with the incentive of sky-high prices – because of a lack of investment in recent years. While prices have come down from their peaks, the outlook is uncertain with new rounds of European sanctions on Russia kicking in later this year.

What is being done?

Pandemic hangovers and rising interest rates limit public responses, while some countries turn to coal.

Some governments are looking to cushion the blow for customers and businesses, either through direct assistance, or by limiting prices for consumers and then paying energy providers the difference. But with inflation in many countries well above target and budget deficits already large because of emergency spending during the Covid-19 pandemic, the scope for cushioning the impact is more limited than in early 2020. Rising inflation has triggered increases in short-term interest rates in many countries, slowing down economic growth. Europeans have rushed to increase gas imports from alternative producers such as Algeria, Norway and Azerbaijan. Several countries have resumed or expanded the use of coal for power generation, and some are extending the lives of nuclear plants slated for de-commissioning. EU members have also introduced gas storage obligations, and agreed on voluntary targets to cut gas and electricity demand by 15% this winter through efficiency measures, greater use of renewables, and support for efficiency improvements. To ensure adequate oil supplies, the IEA and its members responded with the two largest ever releases of emergency oil stocks. With two decisions – on 1 March 2022 and 1 April – the IEA coordinated the release of some 182 million barrels of emergency oil from public stocks or obligated stocks held by industry. Some IEA member countries independently released additional public stocks, resulting in a total of over 240 million barrels being released between March and November 2022.

The IEA has also published action plans to cut oil use with immediate impact, as well as plans for how Europe can reduce its reliance on Russian gas and how common citizens can reduce their energy consumption . The invasion has sparked a reappraisal of energy policies and priorities, calling into question the viability of decades of infrastructure and investment decisions, and profoundly reorientating international energy trade. Gas had been expected to play a key role in many countries as a lower-emitting "bridge" between dirtier fossil fuels and renewable energies. But today’s crisis has called into question natural gas’ reliability.

The current crisis could accelerate the rollout of cleaner, sustainable renewable energy such as wind and solar, just as the 1970s oil shocks spurred major advances in energy efficiency, as well as in nuclear, solar and wind power. The crisis has also underscored the importance of investing in robust gas and power network infrastructure to better integrate regional markets. The EU’s RePowerEU, presented in May 2022 and the United States’ Inflation Reduction Act , passed in August 2022, both contain major initiatives to develop energy efficiency and promote renewable energies. 

The global energy crisis can be a historic turning point

Energy saving tips

1. Heating: turn it down

Lower your thermostat by just 1°C to save around 7% of your heating energy and cut an average bill by EUR 50-70 a year. Always set your thermostat as low as feels comfortable, and wear warm clothes indoors. Use a programmable thermostat to set the temperature to 15°C while you sleep and 10°C when the house is unoccupied. This cuts up to 10% a year off heating bills. Try to only heat the room you’re in or the rooms you use regularly.

The same idea applies in hot weather. Turn off air-conditioning when you’re out. Set the overall temperature 1 °C warmer to cut bills by up to 10%. And only cool the room you’re in.

2. Boiler: adjust the settings

Default boiler settings are often higher than you need. Lower the hot water temperature to save 8% of your heating energy and cut EUR 100 off an average bill.  You may have to have the plumber come once if you have a complex modern combi boiler and can’t figure out the manual. Make sure you follow local recommendations or consult your boiler manual. Swap a bath for a shower to spend less energy heating water. And if you already use a shower, take a shorter one. Hot water tanks and pipes should be insulated to stop heat escaping. Clean wood- and pellet-burning heaters regularly with a wire brush to keep them working efficiently.

3. Warm air: seal it in

Close windows and doors, insulate pipes and draught-proof around windows, chimneys and other gaps to keep the warm air inside. Unless your home is very new, you will lose heat through draughty doors and windows, gaps in the floor, or up the chimney. Draught-proof these gaps with sealant or weather stripping to save up to EUR 100 a year. Install tight-fitting curtains or shades on windows to retain even more heat. Close fireplace and chimney openings (unless a fire is burning) to stop warm air escaping straight up the chimney. And if you never use your fireplace, seal the chimney to stop heat escaping.

4. Lightbulbs: swap them out

Replace old lightbulbs with new LED ones, and only keep on the lights you need. LED bulbs are more efficient than incandescent and halogen lights, they burn out less frequently, and save around EUR 10 a year per bulb. Check the energy label when buying bulbs, and aim for A (the most efficient) rather than G (the least efficient). The simplest and easiest way to save energy is to turn lights off when you leave a room.

5. Grab a bike

Walking or cycling are great alternatives to driving for short journeys, and they help save money, cut emissions and reduce congestion. If you can, leave your car at home for shorter journeys; especially if it’s a larger car. Share your ride with neighbours, friends and colleagues to save energy and money. You’ll also see big savings and health benefits if you travel by bike. Many governments also offer incentives for electric bikes.

6. Use public transport

For longer distances where walking or cycling is impractical, public transport still reduces energy use, congestion and air pollution. If you’re going on a longer trip, consider leaving your car at home and taking the train. Buy a season ticket to save money over time. Your workplace or local government might also offer incentives for travel passes. Plan your trip in advance to save on tickets and find the best route.

7. Drive smarter

Optimise your driving style to reduce fuel consumption: drive smoothly and at lower speeds on motorways, close windows at high speeds and make sure your tires are properly inflated. Try to take routes that avoid heavy traffic and turn off the engine when you’re not moving. Drive 10 km/h slower on motorways to cut your fuel bill by around EUR 60 per year. Driving steadily between 50-90 km/h can also save fuel. When driving faster than 80 km/h, it’s more efficient to use A/C, rather than opening your windows. And service your engine regularly to maintain energy efficiency.

Analysis and forecast to 2026

Fuel report — December 2023

Europe’s energy crisis: Understanding the drivers of the fall in electricity demand

Commentary — 09 May 2023

Where things stand in the global energy crisis one year on

Commentary — 23 February 2023

The global energy crisis pushed fossil fuel consumption subsidies to an all-time high in 2022

Commentary — 16 February 2023

Fossil Fuels Consumption Subsidies 2022

Policy report — February 2023

Background note on the natural gas supply-demand balance of the European Union in 2023

Report — February 2023

Analysis and forecast to 2025

Fuel report — December 2022

How to Avoid Gas Shortages in the European Union in 2023

A practical set of actions to close a potential supply-demand gap

Flagship report — December 2022

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U.S. Responses to the Global Energy Crisis

Photo: BRENDAN SMIALOWSKI/AFP/Getty Images

Transcript — April 26, 2022

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• Download Transcript 336kb

Joseph Majkut: Hello, all. Welcome to CSIS. My name is Joseph Majkut and I direct the Energy Security and Climate Change Program here. We’re pleased to be hosting today’s dialogue for both a virtual and – a first for us in this endemic era for COVID – an in-person and public audience.

For those of us – those of you, excuse me, who have joined us in person, we welcome you warmly. I’m very happy to see you all. While you’re here, please know that CSIS takes great efforts to secure the health and safety of our guests with a vaccinated staff, high cleaning standards, and upgraded ventilation. Should an alarm sound or another emergency arise, emergency exits are marked in this room and I encourage you to follow the instructions of a CSIS staff member to locate an assembly point outside behind the building. We’re grateful that you’re here and I hope we have an open and fulsome conversation.

For those joining online, good morning to you as well. As we proceed through our program, please use the text box on the event page to submit questions for our speakers or for our panel. Our CSIS colleagues will collect those questions and give them to our moderators. Comments and suggestions for improving the digital experience for these conversations are always welcome.

With that, let’s begin. Two months ago, the Russian Federation invaded Ukraine. And this unprovoked aggression reinvigorated Europe, spurred a coordinated military assistance to the – to Ukraine, and led to the imposition of severe tariffs on the Russian financial system and nearly every sector except energy. We don’t know how long this war will last or how it might affect international energy supply going forward, so I think we should be prepared and preparing for multiple outcomes.

The invasion came at a time of already tight energy markets so that fear of supply disruptions, self-sanctioning, and outright sanctions on one of the top oil and gas producers drive global oil prices upward of $120 in the first days after the conflict began. And they’ve settled now to around 100 (dollars). Self-sanctioning and voluntary measures have not cut into Russian oil income in the way that we thought they might. Meanwhile, Europe is caught in a trap of its own manufacture. Dependency on pipeline gas means that it cannot immediately abandon energy trade with Russia, or be cut off – or it may be cut off. The EU Commission has drafted a plan to accelerate its energy transition and get off Russian gas, but meeting new targets will impose costs in Europe and abroad.

The U.S. response to this energy crisis has been somewhat underwhelming, in my opinion. The administration is working hard to secure gas supplies for Europe, has announced a six-month release from the strategic petroleum reserve and invoked the Defense Production Act to secure supplies of critical minerals. But it is limited in what it can do. Congress is, as you might guess, still deliberating. While our peer countries are pivoting energy strategies in the face of this crisis, knowledgeable of the risks of climate change and the need to decarbonize as well, there’s a sense that the U.S. is sitting on its hands, which is frustrating.

The U.S. is the world’s largest oil and gas producer. We can guarantee energy security for the planet and our allies by producing more. But doing so without sacrificing climate outcomes will require careful planning, decent regulation, and a significant effort to reduce our own emissions, build a clean export energy economy – clean energy export economy. So formulating U.S. response will be a topic for discussion today. We’ll begin with a distinguished guest to hear the view from the White House. Then my colleagues will present some recommendations that we’ve generated here at CSIS. And we’ll close with a panel featuring CSIS associates, led by our senior fellow Ben Cahill. So I encourage you to strap in, think of good questions along the way.

It’s my honor to introduce our first speaker, Melanie Nakagawa. Melanie serves as special assistant to the president and sits on the National Security Council where she’s the senior director for climate and energy. She’s led important work in bringing our country back into global climate negotiations and establishing a leadership role for us in decarbonization. And I’m interested in her thoughts on how this moment creates new opportunities for American leadership. Before working in the White House, Melanie was deputy assistant secretary under John Kerry. She served as a counsel in the Senate Foreign Relations Committee and was previously an attorney at the National Resources Defense Council.

Melanie, I’m really grateful that you’ve come. Welcome to the first Energy Security and Climate Change Program in the endemic era. I look forward to our discussion. If you can start us off with your thinking of the situation over the past couple months, I think that’s a great place to begin a conversation.

Melanie Nakagawa: Well, thank you. And congratulations on your first in-person event in such a wonderful space. So thank you so much for having me. And for those tuning in on video, you know, please do – I think this is much more interesting the more we can hear from everyone through the conversation and through our discussion as well. It’s a perfect time to be having this sort of informal conversation around the state of play with our energy economy and what’s happening with these volatile energy markets and what we’re doing about it.

I really appreciated some of your opening framing remarks of, you know, the state of play and what’s happening. You know, over the last several months the U.S., working with our European allies, have been watching what was happening on the border of Ukraine and thinking through what are the options, what are the possible scenarios and outcomes. And, of course, even before the invasion, top of mind was energy – energy to Europe, the reliance and dependence on Russian energy.

And so we’ve been thinking and strategizing and working with our European partners and partners around the world for several months about how to diversify supply going into Europe, especially ahead of the last – this past winter. You saw some of the fruits of that effort in terms of – you saw some cargos being swapped by Asian partners, redirecting their supply over to Europe ahead of this past winter as their storage levels were quite low, and Japan was coming out of their winter and their storage levels were relatively stable and secure and they can manage the remaining of the winter.

But now we are very much in a state of war. It’s a wartime footing happening in Ukraine and Russia in particular. And there’s a real challenge ahead of us, according – basically a challenge in advance of this coming winter and next winter. You stated it correctly, which is we do have an increased supply challenge between now and next year. We’re not seeing increased volume of gas in particular out of the United States or into Europe. This is merely a physical-infrastructure limitation. We don’t have more export terminals that can be turned online overnight. There are permitted ones. There’s ones that are construction. But in terms of – everything is running at max capacity.

Import capacity in Europe is also constrained, and they’re beginning to build out more import terminals, as indicated by the German announcement just a few weeks ago that they’re looking to build out two new import terminals as well as a floating storage, a gasification unit.

So really, as we look at sort of the state of the world today, particularly in Europe, we’re looking at a twofold challenge. One is, how do we help them diversify energy and diversify LNG and gas in particular, but also how do we help them reduce the demand for gas overall? And really that sort of fundamental thinking is what led to the creation and the announcement on March 25th by President Biden and President von der Leyen of the European Commission to announce the U.S.-EU Energy Security Task Force.

This task force has those two prongs as a fundamental underpinning to its work. It really is about, in the near term, the acute scenario that we’re facing in Europe. How do they help diversity that supply? The task force announced a target of 15 billion cubic meters biannually to move into Europe by the end of this year to help them with their storage levels. And then they also talked about a 50-billion-cubic-meter goal by – you know, let’s call it middle of this decade – you know, 2025-2026 – to move into Europe, and ideally from U.S. LNG players.

And this is, you know, completely possible. If you look at what we’ve already permitted and what’s under construction today, where there’s uncontracted volumes, there’s a real potential here for Europe to signal the demand for U.S. LNG and for our U.S. LNG providers to provide that gas to them in the form of long-term contracts.

So through the task force, we’re engaging with key industry players that have the ability to move their volume to Europe of that volume of 50 (billion cubic meters). We’re talking to European member states that have, you know, indicated a willingness and an interest to building the import capacity to absorb this additional gas by 2025-2026. And we’ve done that with the overarching framework of making this climate-aligned.

Europe has very ambitious climate targets – Fit for 55, net-zero commitments. So do we. And we believe it’s completely aligned to be able to do both. We can provide this gas in a way that we call, you know, climate-aligned, this gas that you understand the carbon intensity of it. We hear constantly from many companies talking about what they’re doing to reduce the greenhouse-gas intensity of their gas. And we’re also talking, in the statement with the presidents, about hydrogen-ready infrastructure on the European side. So on both sides of the Atlantic, you’re looking at infrastructure that will be climate-aligned to our overall objectives.

So really, as I step back and I think about what we’re doing in the short run to address the immediate crisis that’s been created by Putin’s invasion of Ukraine, we also take a look at what are we doing in the medium term and longer term. And I do believe a fundamental theme that we continue to see is a rapid acceleration to a decarbonized economy, a rapid acceleration to an economy that isn’t reliant on a single source of fossil fuels, and it’s incredibly volatile and leaves us at the whims of that dictator in some cases.

And so what we’re trying to do is, really, think through what does that look like. How do we manage this transition? How do we smooth the transition in a way that allows us to accelerate deployment of clean-energy technologies, deployment of smart technologies that help reduce gas demand, as well as thinking through how are we looking at alternative sources of energy as well to supply Europe and, really, kind of getting quite creative about the innovative approaches one can take to this challenge?

And all of this is, again, frameworked within the – both the U.S. targets on climate, the European targets on climate. And I do, fundamentally, you know, to show my own bias, believe that it is possible to do both and we are doing both and, frankly, this only underscores the need to go faster.

Dr. Majkut: That’s all my questions.

Ms. Nakagawa: Great.

Dr. Majkut: For our audience, I think we have a microphone. We’ll, definitely, open the floor here in a couple of minutes. But if you’ll permit me to take moderator’s privilege, some of the stuff we see out of Ukraine is, truly, horrifying. To date, the importance of Russia as an energy exporter has kept energy sanctions sort of on the table.

In a world where this conflict lasts a long time, are we in a tenable place? Like, when you talk to colleagues from Europe or when you talk to your colleagues in the White House, is a world where Russian energy is unsanctioned something that you think we can live with for a long time?

Ms. Nakagawa: Well, you were talking about, you know, the self-sanctioning that’s happening in the market to date, looking at where the current energy is being absorbed in other countries or other regions. We’ve been really clear about when we took the action of banning imports of Russian oil crude and gas – really, we don’t take gas, but it was Russian oil and crude and coal. That’s what it was.

When we took that action, we recognized that we have the ability to take that action. We’re an energy superpower. We can do that. I mean, we’re not asking other countries to come with us. But we were talking to other countries that were already thinking about what they can do themselves to restrict that supply of energy from Russia.

You see already in the press, you know, over the last several weeks what Europe is thinking about in terms of how they’re thinking about addressing this. You have the U.K. moving out with their own import restriction on Russia. And, again, across kind of the European Union side, they’ve been thinking through their own ways of addressing this issue because as this continues the question becomes what do we do.

And I think Germany and the European Commission have been very clear. They see a future where they are out of the game of investing or supporting Russian energy supply and they have a goal of, last I saw, it was, like, 2027 to be completely phased out. But they also talk about as soon as possible, and the way to do that is by working closely with the U.S. and other partners to rapidly accelerate that transition away from Russian supply.

So I do think that, again, through the Europeans’ own stated commitments, they’re going to be out of the business of investing or supporting Russia. You see companies around the world – multinationals – already pulling out of the energy sector in Russia.

So I think it’s – it’d be sort of inconsistent or incorrect to say that we’re still in the game on energy because we are very much, especially for the United States, looking at what U.S. businesses have been doing, multinational businesses have been doing, and the fact that there is a transition afoot to get us out of that business.

That being said, this is a volatile energy market. This is a transition we’ve got to manage, and we’re not about trying to affect security of supply. You know, first and foremost, as we recover from the global pandemic, we’ve got to ensure security of supply and that was a key part of the way we designed our sanctions to go at where it would hit Russia the most. We looked at the banks. We looked at some of the key export markets, sort of critical technologies.

So these are some key areas where we really focused our sanctions regimes, and they’re working and we can see them working today.

Dr. Majkut: I think – you know, I think credit to the administration, I think, putting out the fires of the immediate energy challenges that our European allies faces has been a real achievement. But you talked about this sort of intermediate timescale, right – 2027 getting off Russian energy supply. U.S. LNG can play a huge role there.

I also heard the term long-term contracts, and this is where it does get, I think, tough for our European allies where building out additional infrastructure, which is the limiting step, the rate limiter at the moment – does imply some – perhaps, some challenge to long-term climate goals in Europe or just globally.

How are you thinking through what are the right ways to measure the impact of additional capacity that comes on over the next few years so that we don’t end up sacrificing our climate goals?

Ms. Nakagawa: It’s a great question. Well, first and foremost, it comes down to we are very much emissions focused – carbon-emissions focused, so technologies like carbon capture, utilization, and storage; things such as methane regulations on flaring. There are technologies and there are policies and there are incentives that can be put in place that actually strip the emissions, right, the carbon – the carbon intensity and the emissions from some of our actions when it comes to natural gas. You know, we talk to companies in the United States that are looking at – frankly, supporting methane regulations and methane rules to reduce their methane intensity. We’re looking at companies that are trying to track every molecule, and looking at the emissions intensity, and also looking and trying to lean forward into carbon capture utilization and storage, as well as on-site, you know, solar power, renewable power, kind of clean energy powered on their facility itself, to really kind of create the lowest carbon molecule of a fossil gas, right? To be clear, this is still a fossil fuel that’s being moved.

And then on the European side, again, you’re looking at the role of renewables in degasification. You’re looking at the role of pipeline infrastructure that could be hydrogen ready to fuel a clean – a green hydrogen or a clean hydrogen economy. And so at the end of the day when you think about these 2030 targets, 2050 targets, and the role that gas plays, it’s also tied to the carbon intensity of that gas. Is it today’s gas? Is it a future gas? And it’s also tied to the fact that some of these contracts, while long-term in nature, you know, questions come up as to can you resell those contracts? Can those contracts go elsewhere? Are you locked into that contract in perpetuity, right, for that life?

And so there’s questions around what kind of flexibility is there in that? And we see that in the United States. We all have destination flexible contracts as well. So you have these contracts but, as you saw – you saw volumes moving, cargos moving from one destination to another destination over the past several months. So I think there’s this conversation that’s happening right now around how to make this aligned with these carbon goals and these climate goals as well because, again, it’s about not the fuel itself but the carbon intensity and the carbons attached to it.

In the case of Europe, you’re looking at if you can reduce the demand for gas, that can be very much in line. I think about the REPower EU plan which, again, in the U.S.-EU joint statement or even if you just take a look at what Europe today gets from Russia, which is anywhere between 150 to 155 bcm, if that’s what Russia supplies Europe today if you look at the REPowerEU package and Fit for 55, I think – and James is here – is that you see – I think it’s about 170 billion cubic meters is what the REPowerEU package, Fit for 55’s measures would save in gas.

So you have 170 of savings that’s possible if you implement the forward movement of clean energy, the smart technology deployment, and then you have the Russian gas volume, which is 150. So again, that’s an ambitious package, but if we go all-in on that you can see how the numbers net out in terms of how you can lean forward into the transition that actually helps decarbonize and keep us on line with our climate goals.

Dr. Majkut: Editorial question. A lot of the conversation thus far in the U.S. has been around how do we open up more supply and how do we guarantee international energy security. Do we need to focus more on what we’re doing on demand and how we can help our allies reduce demand as well for, like, oil and gas?

Ms. Nakagawa: I mean, definitely. I mean, this is – as you’ve seen in all of the president’s announcements over the last several months, it is a two-part announcement. I always like to focus on the two-part notion to that. So for example, on the U.S.-EU Energy Security Task Force, two parts. First, diversifying supply and then, secondly, reducing demand for gas. When the president announced the largest-ever release of the Strategic Petroleum Reserve – a million barrels a day – you mentioned it earlier in your opening remarks, a million barrels a day for six months – two parts to that statement.

How do we provide supply to the market in the next six months while U.S. production comes online? We’re seeing that already today through rig counts going up. The U.S. industry CEOs in the oil and gas sector have already said and energy experts have all stated they expect about a million barrels a day of new oil production coming online from the U.S. by the end of the year. So our SPR release is a nice bridge between those two – you know, a quick release over six months to bridge to the increased production that we expect by the end of the year.

But that statement had a second part. It had what you mentioned, the DPA for critical minerals, the clean energy EV supply chain for batteries for EVs, which gets us off of oil, right? It reduces demand for oil. And so again, I think you continue to see this two-part approach, which is always about we might have to deal with an immediate supply issue while also reducing the demand across the board. And that’s why we’re, you know, working with the Europeans on their means to reduce demand as well, and that’s, again, across oil and it’s – and it relies on gas as well.

Dr. Majkut: Yeah. Colleagues, if you want to start queuing for questions I’m going to invite you to do so now. I’ve got two more for Melanie, if you’ll permit me.

Ms. Nakagawa: Of course.

Dr. Majkut: I know you’re not an engineer. Do you have any idea what – how we make LNG infrastructure hydrogen-ready? (Laughs.)

Ms. Nakagawa: I’m not an engineer. I have other degrees; I’m not an engineer.

Well, for example, one of them is the pipeline infrastructure itself, so the type of steel and the reinforced steel within the pipeline infrastructure is one way to do that. We can blend today, you know, I’m told, 20 to 30 percent hydrogen in a pipeline. There are other experts out there that many of you have heard of that will say that we can go higher than that, but part of that is the infrastructure question of can the steel, the pipeline infrastructure itself, handle a higher volume of hydrogen, and I’m being told that you could invest in tech infrastructure today that is ready for that kind of technology. So that’s the kind of infrastructure we’re thinking about is the ones where – if you’re going to build new, which in the case of Europe they’re looking to build new, let’s build it new so that it is usable for this next – the next transition of this gas infrastructure.

Dr. Majkut: And final question before we open the floor. The president has an ambition climate agenda, whole-of-government approach. The congressional piece of that agenda had stalled in advance of this crisis. What – how do you, you know – to what percentage is this new energy – this new set of – concerns around energy security aligned with the congressional package we had before? And if there are changes that you feel need to be made to emphasize certain aspects of that agenda, what are they?

Ms. Nakagawa: Well, we have – what’s really interesting is, you take a look at what’s already passed, right, the bipartisan infrastructure law, and some of the investments it’s making in domestic infrastructure already to date, and then you couple that with what’s pending before Congress today. In there you’ve got – you know, things such as CCUS credits, right, which is critical in this moment we’re in. I think it only further underscores the importance of the current package that’s pending because, as I mentioned, we are looking to – we are under construction with increased export terminal capacity; they’ve already been permitted. But if Europe’s going to be the off-taker and the buyer of that, Europe is going to be wanting and wanting to make sure that we’re doing everything we can on our side to make that the lowest carbon intensity possible, and to do that, things like tax credits for CCUS matter on really important – to being utilized by these key industry players. And so the current package today is one where I think it just underscores some of those key elements like the tax credits, which will help ensure that Europe is going to be able to contract for the kind of fossil infrastructure that they want to see, that would align with that Fit for 55 and REPower EU climate commitments.

So I would say that’s sort of where the key piece I see is happening right now in Congress, and I do think, as we continue these negotiations going forward, again, it continues to remind us about the importance of really leaning into this transition as fast as possible, and these different types of incentives that are job-creating and economic-growing are really critical for that.

Dr. Majkut: Great. If anyone cares to stand, I only remind you that a question has a prepositional statement at the start and then it’s followed by a short statement that goes up at the end. (Laughter.) Go ahead, sir.

Q: So I just – question. I’ve heard that they want to close – remove all the dams on the Snake River in Washington state to preserve the salmon there. I guess with this energy situation we have now, were they rethinking and reconsidering that? Thank you.

Ms. Nakagawa: Terrific question, and unfortunately completely – (laughs) – outside of my remit as I don’t follow closely the domestic Snake River-related issues, so I would be remiss to try to answer that and then say the wrong thing, so apologies; I’m not going to take on that question.

Dr. Majkut: Thank you for the question, sir.

Q: Hi, I’m Emily Meredith at Energy Intelligence.

And I was wondering if you could talk about – I mean, you spoke about the SPR release is to be a bridge, right? To get towards the end of the year, there are already projections of increased oil output towards the end of the year. But Russia obviously makes up about 10 percent of the global oil supplies, so, you know, to what extent do you think the administration needs to still be encouraging increased oil and gas output beyond what was already expected, and what tools might you be exploring for that? And then also, are you looking at, like, what tools you can use to encourage additional FID for LNG facilities beyond what’s already planned?

Ms. Nakagawa: Thank you so much for that question. So in terms of anything that we can be doing to encourage more, we very much believe that the current market and the energy signals in the market today, from price alone, should be sending the strong market signals to these industries and these companies to continue to do what they are doing, which is – which has been increasing production in response to that. We continue to hear from industry a need for more conservative measures, and so we’ve been having active conversations with them about trying to understand what is – their future projections look like? Are they bringing those forward in any way? And really highlighting the moment that we’re in, this wartime footing that we’re in. Secretary Granholm conveyed this in her remarks in Houston a few months ago regarding where she’s been with the industry as well. And that’s where I would say on the – on the oil side.

Regarding FID, on that piece of it, again, part of what we did with the Europeans – European Union, the European Commission just a few – last month, I guess it was, the statement, was to talk about where the demand is coming from and the type of demand that is coming for U.S. LNG specifically. And we don’t want to get involved in the nitty gritty of those aspects, but what we want to do is be able to show where the market demand is growing, the kind of demand that’s out there, and ensuring that U.S. LNG, as they reach contractual close or as they reach final construction, that they’re finding partners and they’re helping to support Europe in their stated goals of getting off of Russian gas and moving to more diversified sources, to which the U.S. can play an important role.

Dr. Majkut: I think we’ve got one more person in the queue and then I’m taking – I’m accepting questions digitally as well. But, sir.

Q: Thank you. Good morning. I’m Aaron Padilla, the director for climate and ESG policy at the American Petroleum Institute, API. Thank you very much, Melanie, for your time this morning and for your framing remarks.

I wonder if the administration has in mind a particular target for carbon intensity for U.S. natural gas. Let’s pick a point along the value chain such as at the moment that it’s loaded into an LNG tanker and then would go on to global markets. I think it could be helpful for everyone to know what the performance target is because then we could all unify around it. If you think about the value chain of natural gas, there’s a value chain on the industry side from producers, to pipeline companies and transporters, to liquefaction companies, and then onward to global markets, and so they need to work in concert toward a particular carbon-intensity target. And then, on the government side, there is a value chain of regulators as well, starting with the EPA for the exploration and production of natural gas; the FERC for pipeline, transport, and liquefaction terminals; and then the Department of Transportation and PHMSA along that part of the value chain as well. If they could all be oriented to a carbon-intensity target as well, it seems like it would help us all to be working together towards something that would then unleash U.S. volumes of LNG that would be climate aligned in a way that we can all recognize as the performance target that we’re shooting for.

Ms. Nakagawa: It’s a great question, and it’s one where we’re in constant conversation about one step before you actually get to the target, which is the methodology, right? How are we measuring – what are we measuring and how are we measuring those molecules of carbon through the supply chain, through the lifecycle of gas? And there’s lots of different – you know, each company has perhaps their own way of doing it. There are third-party providers that we’ve met with that talked about their methodology and their technique. Consultants are doing this as well. And so we’re actually in active conversations right now really trying to understand how industry themselves are all looking at their lifecycle, how they’re thinking about measuring each of these emission streams that come into – that come through to that point of export before we can even get to a specific number of intensity. We’re still doing that first step of homework on our side and really understanding how to do this. And it’s really – frankly, it’s a global conversation that’s happening around this methodology piece, because we don’t have a number in mind specifically right now but we’re in active conversations to really understand the methodologies that different companies have put forward because we want to make sure it’s apples to apples and not apples, oranges, limes, and a turkey. (Laughter.)

Q: Joe, if I may, just as a quick follow up I – we as an industry agree and are at the leading edge of increasing deployment of direct detection and measurement of emissions. So I would submit that the performance target, though, is still important and not a conversation to wait to have until later, because I think we can all agree that we want to deploy the most accurate methodologies. Whether it’s the continued use of emission and activity factors to estimate GHGs and the increased deployment of direct measurement, we all want accuracy. And we’re moving toward increasing ways of deploying technology to enhance that accuracy. But if we accept that as a premise, that we’re going to accurately measure GHGs, the performance target needs to be considered now so that we can orient ourselves toward achieving that while we’re going to be enhancing our ways to accurately measure it the best way.

Ms. Nakagawa: And that’s part of what – as I said, we’ve been having these initial conversations of the taskforce where we’re looking at, you know, transatlantic, U.S.-EU, you know, workstreams for the taskforce. And one of them has been actually thinking through methane in particular because that’s a key input into this, as there are different ways to measure and regulate and monitor methane, which will be key for exactly what you’re pointing to.

But we don’t want a proliferation of different types of standards and regulations out there, because, again, you won’t have consistency there. So as the task force is under way, it’s complemented by the U.S.-EU Energy Council, a longstanding partnership between the U.S. and EU, where, again, through the Energy Council, you’ve seen similar workstreams around energy, and particularly around the oil-and-gas sector. And so we’ve got a really strong connective tissue with the European Commission, European Union.

And again, this has been really, frankly, a horrible sort of unfolding in the Ukraine, as you mentioned these horrific images. But I think if there was one thing that has been a positive development in terms of how we’re handling this is the strength of the U.S.-EU relationship. Truly, you know, having served in the government before under – a few years ago, it’s been really fascinating and wonderful to see the strong connection between the U.S. and the EU, whether it’s on sanctions or it’s on this energy-security work.

But there really has been a strong alignment of recognizing we’re in this together in many ways, whether we’re the supplier of the energy security to Europe and being part of the solution, or if Europe’s part of the solution for our energy-supply response as well. So it’s been, I think, a real testament to President Biden and President von der Leyen’s partnership throughout this and their lockstep nature, which is only indicated by what we’re doing together on energy issues.

Dr. Majkut: I would – I mean, we can’t control what happened in Ukraine. We’re working well together to bust as many tanks as the – help the Ukrainians bust as many tanks as they can. But I think the next few years are going to create a lot of opportunities for figuring out how do we articulate the methane agenda well. How do we make choices around the spectrum of emissions that governs hydrogen and the hydrogen trade? And how do we, as I think the administration has taken pretty clear steps – we’d love to see more – create a more diverse supply chain for clean energy so that, as this accelerates the transition, we don’t create the same problems that have led us to this moment today?

Melanie, if I may, I want to – you’ve been so generous with your time, but, you know, the immediate crisis that we face is not the only challenge that you’ve – that you have under your portfolio. So maybe we can close just by soliciting your forecast and your thoughts on COP next fall. Amidst an energy crisis, amidst the war in Ukraine, how has this changed your outlook for that event and you think the political dynamics that will lead to it? And any final words for us as we close are also welcome.

Ms. Nakagawa: Well, this year, after Glasgow, was really focused on being the implementation year. We had ambitious nationally determined contributions put on the table by many countries. Going into Glasgow, you had IAEA come out with an analysis that we were, based on the commitments coming into Glasgow and out of it, were just shy maybe two degrees, that they added up to – maybe it was like 2.2, I think, is what it was, of where we are.

So we could do more, and there’s more countries that need to come to the table. But we were trending in the right direction of getting really ambitious targets on the table. And this year was really focused around the implementation, making sure the policies are matching the commitments and the targets that finance is moving. And given the current state of COP-27, it’s sort of the adaptation-resilience COP. It’s going to be focused a lot around those commitments and what we can do to help the most vulnerable communities and populations.

And for better or worse, that theme persists. I think it’s – you know, and probably even more so, given what we haven’t talked about, which is somewhat related to this conversation, is the food-security crisis that is looming, you know, in terms of where our food supplies are and a real need and desire, as we get into crop-planting season, crop-reaping season, which requires diesel and energy and fuels to do that.

I think there’s a lot of challenges and concerns about what the future food supply is going to look like for the most vulnerable affected communities around the world. And this upcoming COP needs to really continue to focus around building adaptation, building resilience into the economy.

Last year’s COP was really about ambition and mitigation targets and finance coming into that one. This year’s COP has to be about what are we doing about it. How are we mobilizing finance? How are we mobilizing resilience and adaptation in these key communities? And that hasn’t shifted, and, again, I think has only been accelerated in how much more we need to do on that front, especially with this – an unforeseen factor, which was this food security. We’ve always known that we’re food-vulnerable. We know that climate change is going to exacerbate our food insecurities and water insecurities. But definitely this war has further moved that closer to our front of mind than it has ever been before, and so that would be a key part of – as we think about COP-27 this year.

Another key part will be around finance commitments. How are we showing and demonstrating that we are investing in these communities, we’re investing around the world? We have – this will be the year that the U.S. is starting to move the bipartisan infrastructure law dollars. So, you see the Department of Energy standing up new programs, new teams, new, you know – the Loans Program Office has made already two investments out of their shop in critical mineral-related technologies.

So, this is really about a year kind of – last year was a whirlwind year because I had the privilege of being part of a year one. I had never been in a year one of an administration before. I’d usually turn off the lights last time. This time turning on the lights. And I’ve had –

Dr. Majkut: I believe you’ve earned the privilege of year one.

Ms. Nakagawa: – I’ve had the full experience, and it was a really exciting year. We had an incredibly aggressive climate agenda that we were implementing. So, now this is the year that – now that we’ve set all that foundational steps – you know, we’ve launched our, you know, executive orders. We have, you know, initials – a first tranche of investments already made. We have the President who launched a global structure initiative called Build Back Better World. We really have the foundational pieces.

We’ve come back to the global stage, humbly of course, but we have returned from a position of strength, frankly, of a lot of the successes we’ve had at home in terms of some of the EV charging efforts, our transportation transition, all amid coming out of a global pandemic, right? So, there’s also that piece to the equation.

So, this year – again, I think this war has shifted our focus in terms of looking at how the energy transition is not something that can be a light turned on or off over a night, but rather, how do you leverage this to just rapidly accelerate these other pieces that, frankly, were unheard of. I mean, the fact that you have a European Union looking at a thermostat play, a heat pump acceleration, a weatherization program, far faster than they had two years ago really is a sign of the times, of where we are, and I do think that, you know, this year is going to underscore how we take this transition and how we transition it into – and how we help to smooth it out through some of these tools.

Dr. Majkut: Let me just say thank you for your service. Thank you for coming to CSIS this morning. We’re really excited for this conversation, and we look forward to seeing how it develops.

Ms. Nakagawa: Well, thank you so much for having me.

Dr. Majkut: If you can join me exiting stage right?

Dr. Majkut: My colleague Nikos Tsafos is going to come up and take over the program. Colleagues from the Web, thank you kindly for your questions, and onward. (Applause.)

Nikos Tsafos: Thank you. Hello, everyone. My name is Nikos Tsafos. I’m the Schlesinger Chair for Energy and Geopolitics at CSIS, and I caught the short straw and have to present the group project. (Laughter.)

So, Joseph Majkut, Ben Cahill and I published a commentary yesterday sharing some ideas about how we might respond to the moment. And so, I’m going to try to spare you the effort of reading it and try to summarize and give some context about why we wrote this, and then I’ll be joined by Ben and John Larsen to talk about these things.

So, as Joseph said, you know, we’re at an odd moment in this crisis because if I were to show you the price of oil and the price of gas and you weren’t reading the news, you would think something weird happened in February and then it was over, right? The price kind of like spiked and then it’s kind of come down again. It’s a little bit higher in oil. Gas has mostly reverted back to where it was.

At the same time, it doesn’t feel that way. It doesn’t feel like this is something that came and went. And so, as Joseph said, you know, we made a decision at the beginning to not sanction Russian energy, and low and behold we haven’t sanctioned Russian energy – that Russian energy flows seem to be continuing at roughly the same rate as they were before the war. And every week we have new estimates about how horrible the oil numbers are going to be out of Russia, and then a week later we realize that, actually, no, Russian oil exports seem to be tracking more or less what they were the month before.

And so, we put these ideas on paper – some of them are from previous commentary; some of them are ideas that we’ve talked about in presentations – to try to articulate essentially what we think the U.S., in particular, should be doing. And our guiding principle was to say there is no tension between providing energy security now and accelerating decarbonization later. This isn’t a free for all to just go back to the good old days – if you can call them the good old days.

This is about recognizing that Russia is the largest exporter of oil in the world, and the largest exporter of gas in the world. And we’re trying to win a war against them, and we’d like to sanction those exports. And to sanction those exports, it would be really helpful if the U.S. could make up for some of the slack. And it would be even better if we could do that in a way that doesn’t increase cumulative emissions over time, right?

That’s our starting point, right? Our starting point is that in our view the way that market forces are working, market forces are not well-engineered for sanctioning the world’s largest oil exporter, right? That’s not what markets are designed to do. Markets are not designed to accommodate the European Union deciding we no longer want to import Russian gas overnight, right? And so we need public policy to supplement that.

So we have grouped our ideas around three main themes – oil, gas, clean energy. And so I wanted to start, before I go to the recommendations, with a diagnosis of why we sort of tried to put the things that we’ve put on the table. On the oil side, you know, we have, I think, fundamentally in our view, a problem of scale and market mechanics, right? So the scale problem is that Russia was exporting about 8 million barrels a day of oil, right? So if we’re talking about market forces producing an extra one, or two, or two and a half, you know, that is a long way out before you can say: I can significantly sanction Russian energy, right? So there’s a question of scale.

The other thing that has very much guided our recommendations is that the U.S. production system, which is probably the one that could be most responsive, is clogged up right now, right? People have different views about why it’s clogged up. Our, I would say, collective assessment is it’s largely because of market forces, for lack of a kinder description. The industry lost a lot of money, or investors thought they lost a lot of money the last decade and they’re not keen to invest and jump into increased production. And because if they jump into increased production, they’re going to crash the price again. And so that is holding back sort of U.S. industry from being able to produce the kind of volumes that you would need if you wanted to sanction Russian oil.

And so our recommendations for the oil side, one, is we think that there should be some clear political messaging. As Melanie said, you know, Secretary Granholm has said this, that this is a wartime footing. I think this kind of language is important. I think bringing people to the White House and understanding that it’s not just the oil industry. It’s the service sector. It’s also the investors who are telling the oil industry not to invest. It’s really trying to bring people together and try to figure out how do you articulate a response. Again, at the moment, we’re not sanctioning Russian oil. And we’re not sanctioning Russian oil, because we can’t afford to sanction Russian oil, right? So this is really about how do you develop a response that allows you to sanction Russian oil more significantly?

The two specific things that we would say, one is to try to essentially provide some price support in the medium to long term for the – for the industry. The cleanest way to do this would be through the SPR, the strategic petroleum reserve. The recommendation that we have in our document says that the administration could commit to refill the SPR if prices go below 70 (dollars). Essentially, what we’re trying to solve or, again – remember, what we’re trying to solve for is industry isn’t investing because they’re scared that if they ever produce, they’re going to crash the price and lose money. So trying to offer some kind of visibility on demand support and price support could be incredibly helpful in unlocking these volumes.

And, by the way, as you all know, U.S. shale is ideally suited for this purpose because it declines very quickly, and so the commitments we make right now don’t lock us in in a 20 year sort of emissions – we don’t lock in, like, 20 years of emissions because within three to four years, you know, 70 to 80 percent of the production from these wells will have gone away, right? So it’s a great tool for responding to this moment.

If we are in a more wartime footing, you can imagine more direct ways to support the industry, akin to what we do for agriculture and other industries, right? Again, we’re trying to take out 8 million barrels, or as close to that as we can. We probably can’t get out all of it because some of it is going to China. But we’re trying to get out as much as we can, right? So we need a step change in our support system. The other recommendation is on the oil field services side, where we understand there’s a lot of bottlenecks in terms of the ability of the industry to respond, to hire crews, to get access to components, to trying to figure out other specific sort of lending systems that we can do for this industry to try to increase capacity to respond to the increased drilling that may come from the oil sector. So that’s the oil side. Again, I’m trying to summarize it relatively quickly.

On the gas side, you have two different problems. One is there’s – there’s a short-term problem and a long-term problem. The short-term problem is that if Europe decides to go buy an additional 50 billion cubic meters of gas, as it wants to do, form the liquified natural gas market, well, we didn’t have 50 million cubic meters sitting around waiting for Europe to come buy it. And so they have to sort of bid that gas from somewhere else. And I like to say that, you know, the combined consumption of Pakistan, Bangladesh, Malaysia, Indonesia, Singapore, and Thailand last year was 40 billion cubic meters. So if you want to import 50 billion cubic meters, that’s a lot of gas.

And, by the way, if you want to do it through 2030, you know, this year actually we have a lot of new supply coming online. That’s not the case in 2023, ’24, ’25. And, moreover, by the way, European gas production itself is declining at roughly 8 billion cubic meters a year. So within four or five years, you actually haven’t done anything if you import 50 billion cubic meters of LNG, right?

But the broad diagnosis here is, one, you’re adding a lot of consumption to a market that was already tight and so how do you manage that. Number two, you can’t really cut out Russia without doing anything that increases supply, right. So that’s the problem that we’re trying to solve.

So, in the short term, as Melanie said, there’s been a lot of effort from the U.S. government on the diplomatic front to try to sort of figure out a way to reallocate supplies so that more goes to Europe. We think that this is something that should be expanded and try to be more inclusive, try to bring in the major players and talk about how we’re going to manage the market.

You can’t really manage this market purely through price because price(s) have gone through the roof, right. So that kind of effort where you bring the EU, bring the U.S., you bring Australia, you bring Qatar, you bring Japan, Korea – if you can get China, even better, right – you try to bring people together and say, OK, how can we manage the system over the next few years where there’s enormous stress.

In the medium to long term, you know, we’re hearing a lot about additional U.S. LNG production. Here’s the problem. The market signal is a mess, right, because you look at the price today and no one believes this price is going to last. The EU is talking about LNG demand until 2030. Well, if it takes you four years to build the thing, like, no one is going to make money between 2027 and 2030. So the 2030 goal for the EU means nothing, right. And there is no clear sort of support system to enable something that wasn’t happening already, right. There’s no real public money, in part, because Western countries have decided not to support these kind of projects.

And so these are the constraints that we’re dealing with, right. So one of our suggestions is to say let’s try to come up with different, more creative structures where if you do give public support from the EU, you do this and you put in the financing terms, some very strict methane reporting and verification rules, you can have this gas go to Europe for a 10-year period while Europe diversifies away from Russian gas and then you can sign back-to-back contracts to sell this gas to Asia to displace coal in the sort of 2030s, 2040s so that Europe can see how its investment in LNG, actually, is part of a positive sort of climate story.

You can, again, depending on – again, this is war time, right so increasing levels of, like, intervention, right. We’re trying to solve for a big war. You know, you can come up with more aggressive structures where, essentially, you do public financing and a project has a 20-year operating life and then they have to shut down unless they can show that they can be consistent with a net-zero world, right? We do these kind of contracting structures for bridges, for airports, for all type of public-private partnerships. We can do it for LNG, right, where the assets revert back to the state or they lose the license to operate after a while if they’re not consistent with a net-zero world.

Again, these are all not simple but, relatively, straightforward concepts for trying to figure out how do you boost supply now without locking in emissions for the long term.

A final thing – the final idea on clean energy exports, this isn’t just about hydrocarbons. This isn’t just about oil and gas, although, obviously, being the largest oil and gas producer that’s where a lot of the focus is. This can encompass other technologies as well. We have, at the Department of Energy, a – and coming out of the infrastructure law a major initiative on hydrogen – hydrogen hubs. Everyone wants to be a hub. You know, welcome to the world of European energy where everyone wanted to be a hub. Now we can see the same party happening in the U.S.

Well, our question is, well, we’re in the process of designing hubs and conceptualizing hubs. How can we insert an export component to those hub concepts, right? How can we think about supplying hydrogen to Europe as it tries to lessen its demand for natural gas, right?

So we have an initiative that is, largely, now sort of domestically focused. Well, how can we put export into the concept from the beginning and try to figure out how can we deliver clean hydrogen to Europe over the next decade?

And, finally, this idea, again, can expand to other technologies as well. We had in discussion the 48(c) credit on manufacturing, right? So try to support clean-energy manufacturing. Europe is going to be scaling up its intake of a number of technologies. How can we be the ones to supply those technologies?

We even have more tailored initiatives, say, around solar – the Solar Energy Manufacturing Act – where we can be – again, if Europe is going to be accelerating its transition, the U.S. could be one of the suppliers so it’s not just China, China, China in terms of diversifying away from Russian gas by relying largely on Chinese manufacturers. How do you also diversify those supply chains?

So that’s the list, right? Our overarching goal again is respond to the moment, allow for greater sanctions, and doing so that when we look back in 10, 15 years at what we did, we can say, you know what, net emissions were roughly the same as what they were going to be, or even better, maybe a little bit less, but we also responded to the moment in an aggressive way that allowed us to make a material contribution to the war by enabling a much greater sanctioning of Russian energy exports.

So with that I’ll stop and I’ll invite my colleagues to come up here. (Applause.)

Ben Cahill: While we shift everything around, I just want to share that Sarah Ladislaw, who was supposed to be here for this panel, unfortunately couldn’t be here today. She’s not feeling well. So we wish her well. And I’m sure she’ll be back with us again at CSIS soon.

So my job is to run the panel discussion. My name is Ben Cahill. I’m a senior fellow here in the Energy Program.

And we’re very fortunate to have John Larsen with us. John Larsen is a partner at Rhodium Group. He’s also an affiliate of our program. Rhodium Group, many of you are familiar with them. They do a fantastic job modeling different climate policies. So it’s a real privilege to have John with us to talk about what some of these policy initiatives, especially around U.S. LNG, might do to climate outcomes and emissions.

And we also have Nikos with us to maybe expand on some of the ideas that we just talked about. Nikos did a fantastic job presenting those ideas; tour de force.

So we don’t have that much time. We’re running a little bit behind schedule. So I’m going to turn the floor over to John. And I know that John wants to talk about the U.S. LNG industry and exports and the idea of squaring more export capacity with the idea of reducing emissions over the medium to long term.

So John, over to you for a couple of minutes.

John Larsen: Thanks, Ben. And it’s great to be back at CSIS. This is my first in-person event in a couple of years, so sorry if I’m a little shaky. (Laughter.) But it’s really great to have that first opportunity to be here.

And, you know, I’m going to speak a little bit maybe in a bit more detail to some of the comments that we heard from Melanie and from others around the LNG situation here in the United States vis-à-vis Europe.

You know, depending on how you count it, U.S. LNG is as much as 50 percent better, on a lifecycle perspective, than Russian pipeline gas. So already this pivot away from Russian pipeline gas to U.S. LNG or other LNG now is a net incremental gain for the climate. But that has way more to do with leaky Soviet steel infrastructure going across multiple continents than it does with any superior environmental performance of the U.S. oil-and-gas industry.

And what that means is there’s lots of room for improvement. And we heard it from the questioners, we heard it from Melanie, that that certainly is the case. But the industry is not going to do it without a policy framework that it can work with that’s predictable, that’s long term, that allows that environmental performance to get enhanced and to make U.S. LNG more attractive and marketable, not just in Europe today, but in any decarbonizing energy system across the globe over the long run.

And so really it’s playing on what Melanie said. There’s a few different opportunities here to set up that framework. One, first and foremost, is the executive branch has authorities that it can use to reduce oil-and-gas methane from exploration, production, and transmission. The Department of Transportation also has authorities. There’s lots of different space there.

The U.S. EPA’s proposed rules on oil-and-gas methane on the table right now could cut methane emission from natural-gas systems by roughly two thirds over the next few years. Methane is probably the most important near-term opportunity for emission reductions from the supply chain. It is worth noting that it’s not the only gas associated with lifecycle emissions of LNG.

Carbon dioxide is a real issue, both in produced CO2 that comes out from the wells, but then also all along the transportation chain, you combust fossil fuels to move fossil fuels. And so emissions at the lease sites, at natural-gas processing plants, at LNG liquefaction plants, are all major sources of CO2 associated with lifecycle emissions of gas. And that’s where I think a lot of the additional policy measures could be focused.

So, for example, Melanie mentioned the carbon-capture tax credit, 45Q. The version that passed in the House Build Back Better Act would extend the deadlines and enhance the value of the credit to a degree that we at Rhodium feel could be quite attractive, not just for gas processing plants but for LNG facilities and would dramatically cut the CO2 footprint of the supply chain for LNG cargos. And then on top of that, the Methane Reduction Program that was also part of that act, which had, like, a carrot/stick approach to reducing methane, could definitely complement the EPA regulations and maybe get at some emissions that the regulations can’t. And all of that is going to send expanded and predictable signals.

And again, I’ll say, long term like, this is – the tax credits contemplated in what was Build Back Better and potentially in any new package that might emerge – one of the huge benefits of that is not just that the tax credits exist, it’s that they’re available for the full decade through the 2020s. And that allows a lot more deployment of all these technologies over time, in particular when we’re talking about the timeframes that Nikos is talking about, with LNG terminals. We’re really talking about the new capacity coming online in the later part of the decade is what – is a big part of this. And all of those things together could make U.S. LNG not just better than Russian pipeline gas, but perhaps the best, cleanest LNG production in the world should the industry have a framework to work with and it takes full advantage of that framework.

And so we – you know, we need EPA to follow through on its regulations, but we also need Congress to act to set up that framework so that people can start really putting the multibillion dollar investments on the table to make this stuff work. That is probably – gets U.S. LNG performance to a level that, you know, could be impactful through the 2030s. It is not the same as net zero. And so the last thing I’ll say on this is, you know, the industry and the U.S. should be really thinking about, and Europe is already thinking about, how LNG can work in a net zero world.

And that could mean hydrogen blending. It could mean using more bio-based sources of methane instead of fossil. It could also mean offsetting those emissions with rigorous direct-air capture or carbon removal of which there are substantial incentives also in what was Build Back Better that could be expanded and taken advantage of here and could leverage all these existing CO2 infrastructure – or the new CO2 infrastructure you’d be building around those LNG terminals anyway. So there’s a lot in the long run to contemplate, but so much to do in the short term, should that framework get put in place.

And so, you know, I think it’s time for folks to really get serious. We’re going to have any kind of action this year on this, to really kind of push this stuff into the next level and really accelerate clean energy deployment in the LNG sector.

Mr. Cahill: Thanks, John. That’s great.

Let me start with a question specific to U.S. LNG, and then I’d like to get your views on some broader climate policies that might be possible at this time, with this changed environment. So there are a lot of critics of funding any fossil fuel projects at this point. You know, many people make the argument that if you fund fossil fuel infrastructure, you’re locking in carbon use and, you know, fossil fuel dependence. How do you respond to that? Do you think it’s the best use of public funds and public energy, government efforts, to support more U.S. LNG capacity? How do you square that with the idea of, you know, achieving longer-term climate goals?

Mr. Larsen: Well, I think the framework that you folks have put together in your commentary around, you know, making sure cumulative emissions aren’t compromised is the right one here. And, you know, that can mean a lot of things. That can mean over time any increase in emissions from oil and gas and LNG exports because of the current activity is reduced through some of the measures I just talked about, right? That wouldn’t have happened otherwise. It could also mean if emissions go up in one sector you do more in a different sector to make up that difference.

And I think, you know, should you have additional policy investments beyond just the LNG package I talked about, say in the electric power sector or in the transportation sector, you could easily, I think, get into a space where the U.S. is making much bigger gains on net greenhouse gas emissions across the energy system without compromising long-term fossil lock in. I also would just say that, you know, any one infrastructure project is not going to make or break climate change. And that – you know, the cumulative effect of, like, lots and lots of projects? Sure. But, like, we’re talking about the margin and we’re talking about a wartime situation. And being able to steadily shift to the clean side over this decade, again with a policy framework to do so, I think should be able to mitigate any of those downside risks.

Mr. Cahill: Maybe a slightly broader question. So Rhodium Group, as I mentioned, does a lot of great work modeling, you know, the impact of various climate policies. We’re in a changed environment. A lot of things may be possible now. There’s a new sense of urgency to try to get something done in the coming months on climate. Maybe share some thoughts on what you see as, you know, the biggest potential wins that are feasible in this kind of policy climate, right? When you think about the kind of Venn diagram of, you know, impact and feasibility, where can we get the biggest bang for the buck? What do you think is achievable that would really, you know, maximize in emissions impact? We’ve talked about U.S. LNG and reducing emissions from the industry, but what other things is Rhodium thinking about?

Mr. Larsen: Yeah. We’ve been looking at this now for a year and a half, you know, as there was an – you know, a new opportunity on the table to move legislation. And I’d say, if I had to pick one area just to highlight, it’s the electric power, clean-energy tax credits. And not just from a clean-energy deployment and emission-reduction perspective, but also from an energy-security perspective. Again, the long-term nature of the credits gives the industry the kind of running room to scale that it’s never had before. It’s always been up and down – will they/won’t they extend these credits? And instead, having 10 years of full value and flexible tax credits where solar or any technology can take either the investment or production tax credits we found is – really, really enhances the overall value of those tax credits. Coupling that with the nuclear retention tax credit, you can – our estimates are, first of all, you could probably get U.S. electric power CO2 emissions down to about 70 percent before ’05 levels by 2030 just with the tax credits. That’s before you talk about any new public-health or GHG regulations in the sector. And you free up a volume of natural gas that would have otherwise been burned in the electric-power sector equal to the amount of total U.S. LNG exports today.

So that’s a lot of gas, to quote somebody I know next to me here. (Laughter.) And you know, I think that – you know, putting that into the context of energy security, that’s a lot of natural gas that could easily be used to help our allies get off of more volatile, insecure sources without any serious price repercussions back here at home, because you’re – what you’re doing is you’re just replacing reduced demand with exports, right, as opposed to having to find new sources of gas to fill in both spaces. So I think that – if I had to pick one category, that’s it. I mean, this expands to transmission and battery storage and all that other stuff that you need to support all that clean-energy deployment, but I would say that’s a really critical part of this.

Mr. Cahill: Thanks, John.

Nikos, let me turn to you. You were in Europe recently. You talk with European policymakers a lot. I wonder if you could just comment broadly on some of the big differences in the policy response between the U.S. and Europe to all this – Russia-Ukraine market implications. I mean, obviously, the U.S. is in a different position because we’re a huge producer of oil and natural gas, but maybe talk about how the U.S. versus Europe are kind of setting out the medium- versus long-term response to this, and how things have changed from the European policymaker’s perspective and how they’re looking at it differently compared with here in Washington.

Mr. Tsafos: Yeah. Well, you know, I think there’s a couple of things.

One, you know, I’ve been doing this for a while now, and if you were to tell me that Russian gas would be cut off to Europe but it would be the Europeans that did it – (laughter) – like, that would have been a surprise, right? So I think no one should underestimate the extent to which the European discourse on this topic has fundamentally shifted, right? And it has shifted in ways that I don’t think, like, if the war would stop tomorrow – which it won’t – it’s going to change, right? I think there’s a stickiness to it, right? So I think that’s one.

The only question is: How soon? How soon could we do it, right? So, obviously, the U.S., you know – you know, we banned oil, gas, and coal. We didn’t really import gas. I’m not quite sure on the coal, but it probably doesn’t matter. On the oil side, there were some imports. You know, Europe is just in a fundamentally different position. And I think what you’re seeing right now is sort of multiple conversations happening, right? One is, obviously, countries have very different historical experiences with Russia, and so their willingness to take strong stands differs depending on where you are on the continent. Countries have very different exposures to Russia and also responses. Are they on the water? Can they access LNG? Are their – are their oil supplies coming from pipelines or through the water? How much coal do they import from Russia? So all these things are coming together.

But I think you’re also having a sense of, you know, how much is this really going to matter, right, in the war effort, right? I mean, if we’re going to be reducing Russian gas supplies but the price of gas is going up and the Russians are making just as much money as before, are we really accomplishing anything, right?

So I think what you’re seeing now is a – is a couple of conversations. One is, you know, we did see the EU put sanctions on coal from Russia, which, you know, if I have to be analytically honest it’s like – it doesn’t really hurt them that much because they don’t make that much from coal, but it hurts you because you import a lot of coal. So it shows, I think, the public pressure sometimes overtaking sort of the strategic reasoning. And I think what you’re now getting to is on the oil and on the gas side – the oil is, you know, how can we do something that’s more phased? Is it a tax? Is it a phaseout? You know, countries are putting out their own targets about how quickly they want to get out of Russian oil. And so what you see now is trying to scramble to figure out a way that is more coordinated. Everyone can sort of agree on the 2027, because it’s far enough that you hope things are going to happen, right? (Laughter.) But frankly, the pathway from here to 2027 is not particularly compelling, in my view, right? On the oil side there’s almost nothing. On the gas side, you know, there is some of the things I talked about already, right?

So, you know, I think what you’re trying to get at is higher levels of confidence. Can we do this? How much impact is it going to be? My view is that some of the numbers coming out of Europe right now about the impact of, like, one, two, three percentage points of GDP are a gross underestimate of the damage, right? We’re talking about gas providing one-third of building energy, one-third of industrial energy. And we’re not talking about higher prices. We’re talking about just not having physical supply because you can’t get the gas into Europe, right? So this is very hard to model, because you kind of have to think about what it means to shut down a bunch of industry.

So that’s what you’re seeing. So what I expect will happen at the same time, though, is we began this war without wanting to sanction Russian energy. This is becoming politically untenable, for all the reasons that Joseph outlined at the beginning, the images that we’re seeing out of Russia. We have to do more. And so my thinking, as I speak to policymakers is, how can you do more in a way that hurts them more than they hurt you, right? And that have a plausible sort of way to fill the gap created by Russian energy.

So that’s the conversation. I expect we might see some movement on oil before gas. But again, on both oil and gas, I think it’s going to be a phase out rather than a total cut off. That’s my, at least, estimation. You know, there’s – you know, where we – at least in terms of what the EU will do. What will Russia do? We’ll see. But from the EU side, I think that’s where the discussion is right now.

And let me just say a final thing, you know, it’s not just – especially in this town we like to do this. It’s, like, all the EU versus Germany. It’s not that, right? I mean, this is – this is a very difficult topic for a lot of countries. It’s not just like everyone wants to sanction Russia and Germany is saying no. This is a far more diverse conversation, and a much more evenly split group in terms of their views about when, how quickly, oil or gas, or how. And so it’s not about, like, oh, let’s just convince the Germans, right? It’s a much broader and more difficult conversation than that.

Mr. Cahill: Yeah. Maybe just a quick one, if you could give a one-minute answer to this. Let’s talk about the commercial realities of adding U.S. LNG export capacity in the U.S. So is it possible to finance a U.S. LNG project with 10-year contracts? Or do people still need that kind of long-term security of demand, 20-year contracts? Can we get over this hump, and can we build LNG export facilities faster, with the way of – you know, the market has changed, and modular terminals, and the ability to kind of get things done faster?

Mr. Tsafos: Yeah. So in the one-minute answer, so I think what you have is in some ways the maturity of the market is such that you should, in my view, be able to finance something without a long-term contract, but then you bring net zero and that’s, like, a big headache, right? So from the maturity of the market, yes, like, the idea that you need a contract right now is kind of silly. But if you’re trying to bring something online in 2026-27, and you’re saying I’m going to make my money back until the early 2040s, you know, that starts getting a little bit tough.

So in my view, I think public money can help bridge that gap, and essentially shorten the time horizon that you need to pay back – I mean, essentially, you know, Europe is going to spend, like, 60-70 billion euros just to refill storage until October, right? I mean, you could spend that same amount of money and, like, you know, almost double our U.S. LNG capacity, right? So think about where do you want to be spending your money and for what energy security benefit.

Mr. Cahill: Got it.

Well, we are unfortunately just about at time. The time flew by. But we do want to end on schedule. I really want to thank Melanie Nakagawa, John, Nikos, all of you for joining us here in person at CSIS, and everyone who joined online as well. This conversation will continue. It’s a really challenging, but also exciting, time for energy and climate policy here. Let’s hope we can get something done in the next couple months. We look forward to collaboration and exchange of ideas and hope to see you back here soon. Thanks so much for joining us. (Applause.)

Energy Crisis: Definition and Causes

Energy crisis

An energy crisis is a society-wide economic problem caused by a constricted supply of energy, leading to diminished availability and increased price to consumers.

The energy crisis is the concern that the world’s demands on the limited natural resources that are used to power industrial society are diminishing as the demand rises. These natural resources are in limited supply. While they do occur naturally, it can take hundreds of thousands of years to replenish the stores. Governments and concerned individuals are working to make the use of renewable resources a priority, and to lessen the irresponsible use of natural supplies through increased conservation.

Since the mid-1960s, the world has faced numerous energy crises. Faced with the eventual end of carbon-based fuels like oil and gas, oil exporters and importers should work together to find a solution. In this lesson, we will look at what an energy crisis is and explore conservation and innovative ideas that might provide nearly inexhaustible energy.

Major Causes are :

• Limited oil resources which are being exploited are controlled by a few countries.
• Prolonged drought which lowers production of Hydro Electric Power as a result of less water hence calling for more demand on petroleum.
• Artificial shortages may be created by the oil-producing countries by withholding the oil.
• Rapid depletion of oil reserves.
• Political disagreement leading to shortage of oil due to delays at border points.
• Inadequate alternative sources of energy that can fit the position of oil causes over reliance on oil and oil products.

Briefly description of Causes of the Energy Crisis

It would be easy to point a finger at one practice or industry and lay the blame for the entire energy crisis at their door, but that would be a very naive and unrealistic interpretation of the cause of the crisis.

Over-consumption : The energy crisis is a result of many different strains on our natural resources, not just one. There is a strain on fossil fuels such as oil, gas and coal due to over-consumption – which then in turn can put a strain on our water and oxygen resources by causing pollution.

Overpopulation: Another cause of the crisis has been the steady increase in the world’s population and its demands for fuel and products. No matter what type of food or products you choose to use – from fair trade and organic to those made from petroleum products in a sweatshop – not one of them is made or transported without a significant drain on our energy resources.

Poor Infrastructure: Aging infrastructure of power generating equipment is yet another reason for energy shortage. Most of the energy producing firms keep on using outdated equipment that restricts the production of energy. It is the responsibility of utilities to keep on upgrading the infrastructure and set a high standard of performance.

Unexplored Renewable Energy Options: Renewable energy still remains unused is most of the countries. Most of the energy comes from non-renewable sources like coal. It still remains the top choice to produce energy. Unless we give renewable energy a serious thought, the problem of energy crisis cannot be solved. Renewable energy sources can reduce our dependance on fossil fuels and also helps to reduce greenhouse gas emissions.

Delay in Commissioning of Power Plants: In few countries, there is a significant delay in commissioning of new power plants that can fill the gap between demand and supply of energy. The result is that old plants come under huge stress to meet the daily demand for power. When supply doesn’t matches demand, it results in load shedding and breakdown.

Wastage of Energy: In most parts of the world, people do not realize the importance of conserving energy. It is only limited to books, internet, newspaper ads, lip service and seminars. Unless we give it a serious thought, things are not going to change anytime sooner. Simple things like switching off fans and lights when not in use, using maximum daylight, walking instead of driving for short distances, using CFL instead of traditional bulbs, proper insulation for leakage of energy can go a long way in saving energy. Read here about 151 ways of saving energy.

Poor Distribution System: Frequent tripping and breakdown are result of a poor distribution system.

Major Accidents and Natural Calamities: Major accidents like pipeline burst and natural calamities like eruption of volcanoes, floods, earthquakes can also cause interruptions to energy supplies. The huge gap between supply and demand of energy can raise the price of essential items which can give rise to inflation.

Wars and Attacks: Wars between countries can also hamper supply of energy specially if it happens in Middle East countries like Saudi Arabia, Iraq, Iran, Kuwait, UAE or Qatar. That’s what happened during 1990 Gulf war when price of oil reached its peak causing global shortages and created major problem for energy consumers.

Miscellaneous Factors: Tax hikes, strikes, military coup, political events, severe hot summers or cold winters can cause sudden increase in demand of energy and can choke supply. A strike by unions in an oil producing firm can definitely cause an energy crisis.

Information Source:

• www.conserve-energy-future.com

Define and Discuss on Long Run Supply

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Topics we focus on

Solutions to the energy crisis

How to achieve sustainable energy.

Identify the causes and effects of the energy crisis, but also the solutions to bring it to an end and how you can contribute.

01. Solutions

02. Definition

04. Effects

05. Prevention

Over the last two centuries, energy needs have skyrocketed dramatically, especially because of the transportation and industry sectors. However, fossil fuel are polluting and their reserves are limited.

We know today that these resources are close to exhaustion and our societies are facing a major challenge: the energy crisis.

Energy crisis solutions

The Solar Impulse Label is granted to innovative solutions to energy crisis that meet high standards of sustainability and profitability.

Each solution goes through a strict assessment process performed by independent experts.

Geopannel Ecological Insulation Solution

Insulation panels made from recycled textile fibers, which recover a part of the total European waste

• Buildings & Constructions

Current Magnetometry Inspection

A drone-based inspection systems to remotely inspect buried pipelines

Teraloop flywheel EV charging

Energy storage for ultra-fast EV charging and micro-grid retrofitting

• Utilities (Water, Energy, Waste)

Floating solar system enabling affordable clean energy

Daanaa WPTIC

Wireless power transfer for solar panel integration

ULTRAÇADE Power

Positive facade architectural solution to better integrate building projects into their environment

A mobile battery system for peak power provision at construction sites

A green energy solar water heating and storage system

Institutional Solar Thermal Cooking Stove

A thermal solar cooking system for institutional cooking within schools and hospitals

BeON Solar Kit

A plug-and-play, flexible solar kit for domestic applications

Ultracapacitors & Silicon Li-ion anodes

Scalable silicon anodes for high energy lithium ion batteries

• Industrial Processes & Consumer Goods

LAYER® Light As Your Energetic Response

Energy harvesting in iot sensor networks using ambiant light

What is the energy crisis?

The energy crisis stems from the foreseeable end of the cycle of oil, gas and coal, which, in addition, have been producing a considerable increase in greenhouse gases (GHG). In recent years, many scientists have raised their voice to warn about climate change, caused notably by the burning of oil and coal in order to produce energy.

Energy crisis causes

Global energy consumption is increasing and we will face a shortage of fossil fuels in the coming decades. Therefore, the availability of reserves is an important source of concern.

Overconsumption

Our current consumption model relies almost entirely on the use of non-renewable energy sources such as oil, gas, coal and uranium. At the current rate of consumption, oil will be the first fossil fuel to run out. According to projections, there would be between 40 and 60 years of proven reserves of conventional oil. Natural gas could be exploited for another 70 years. For coal, there would be around two centuries of reserves.

Overpopulation

These data are to be put into perspective because they are based on current consumption, while it is clear that it will increase considerably. Energy demands are and will be amplified by the demographic - the world’s population should reach nearly 10 billion people in 2050 - and economic boom of growing areas. According to the International Energy Agency (IEA), global energy demand could increase by more than 50% by 2030 in the absence of public policies in this area.

Aging infrastructure

Another reason for energy shortage and scarcity is the poor infrastructure of power generating equipment. Most of energy producing companies keep on using outdated equipments that limits energy production. The need to upgrade the infrastructure and set a high standard of performance is critical.

Energy waste

Mainly coming from the unnecessary use of energy resources, energy waste describes the wastage of energy sources, in particular fuels and electricity. Consequently, the reduction of waste is a colossal source of energy savings, which requires actions both on an individual and collective level.

Energy crisis effects

Environmental

The massive use of traditional energy sources leads - among other things - to the increase of greenhouse gas emissions such as carbon dioxide (CO2), resulting in global warming and harming the environment and biodiversity. Therefore, the energy crisis is closely linked to the environmental crisis.

Economic and socio-political

Energy security is one of the major concerns of the main economic centers of the planet. In fact, energy conditions the possibility of growth, which is essential to the market economy and its development model. The energy crisis could thus have a dramatic impact on the global economy. Besides, when energy markets fail, an energy shortage develops. Energy shortages and resulting economic factors may create socio-political issues.

Energy crisis prevention

The good news is that there are ways to reduce the energy crisis :

1. Energy transition to renewable energy sources

Unlike fossil fuels, some energy sources are totally renewable, and do not emit greenhouse gases. These clean and sustainable alternative energy solutions include solar energy , hydropower , wind energy, geothermal energy and biomass energy .

2. Energy efficiency and conservation

In order to prevent an energy crisis, it is also crucial that we consume less energy by improving and modernising energy infrastructure such as smart grid solutions , and smart cities . It is also important that we replace old devices by energy efficient solutions, such as replacing traditional light bulbs by LEDs.

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What caused the UK’s energy crisis?

From moves by China and Russia to changes in UK regulation, these are the factors that created the perfect storm

The UK’s energy system has been plunged into chaos by a perfect storm of market forces which threatens to rip through the economy from home energy suppliers to heavy industry, and from factories to farmers.

This has stoked fears that a wave of energy suppliers will collapse , and that households will be saddled with unaffordable bills. As the colder weather draws in, these are the factors shaping the energy crisis.

China’s post-Covid bounce back

China’s appetite for energy is always a key driver of global market prices. In 2021 its post-Covid economic ramp-up has coincided with an uptick in demand across Asia and Europe too.

As economies begin to recover from the fallout of the pandemic, countries across the northern hemisphere, which experienced a long, cold winter in 2020-21 that depleted gas storage levels, have been left scrabbling to secure supplies.

Gas prices in the UK have more than quadrupled over the last year to highs of 180 pence per therm, from around 40p/th this time last year. In the last month alone, prices have climbed by 70%.

Market experts at S&P Global Platts said earlier this year that China’s demand for gas was likely to rise ​​to 360 billion cubic metres (Bcm) this year, up 8.4% from an estimated 332 Bcm in 2020. To satisfy its record demand for gas, China’s imports of gas via super-chilled tankers was expected to surge by almost a fifth, meaning fewer shipments travelling to Europe from countries such as Qatar.

Russian gas games

As shipments of gas have turned from Europe towards China, flows of pipeline gas to Europe from Russia have failed to make up the shortfall.

On Monday gas prices across Europe surged by another 10% after Russia’s state-backed gas company, Gazprom, refused to increase its exports to Europe – despite record-high prices across the continent.

The company has met its contractual obligations for gas delivery over recent months but Gazprom has come under fierce criticism for appearing to send little extra to help meet the enormous demand in Europe.

EU lawmakers have called on the European Commission to investigate whether the company’s behaviour has been designed to keep market prices high, and put pressure on regulators to approve of its controversial plans to build the Nord Stream 2 pipeline, a major gas line which would double its capacity to send gas to Germany via the Baltic Sea.

Nord Stream 2 has faced US sanctions and provoked concern that the EU would increase its reliance on energy imports from Russia.

Generation gap

The global gas crunch is particularly bad news for the UK. Around half of the UK’s electricity is generated by burning fossil fuel in gas-fired power plants, a trend which has become more deeply entrenched over recent months after a string of problems in the UK electricity system.

Ageing nuclear power plants have been forced to undertake unplanned outages for maintenance, a main power cable used to import electricity from France has shut down after a fire , and the UK’s wind turbines have slowed during some of the least windy months since 1961.

The UK also relies heavily on gas for home heating and cooking. Yet despite the obvious reliance on fossil fuels for electricity, homes and in heavy industry, the UK has some of the lowest amounts of gas storage capabilities in Europe, leaving the market uniquely exposed to the supply crunch. Less than 1% of Europe’s stored gas is held by the UK.

Britain has been forced to temporarily fire up coal power stations, paying millions of pounds to the likes of Drax in North Yorkshire, to plug some of this power shortfall.

That fragile system faces further challenges in the years ahead, with most of the UK’s nuclear power plants, which supply up to 20% of electricity, to close by the end of the decade. Just one new nuclear power station, Hinkley Point C in Somerset, is being built to replace them.

Uncapped entry to a capped energy market

The UK can expect scores of suppliers to fold over the coming winter, leaving millions forced to switch to a new, more expensive supplier, as the government’s policy of tough regulation on prices collides with loose rules on which companies can join the market.

The energy price cap sets out a maximum level for default energy tariffs twice a year based on the cost of supplying energy. It is to rise by more than 12% from 1 October and is likely to rise again next April. But the hikes will not come fast enough for dozens of small energy suppliers which don’t have deep enough pockets to survive the wait until the next cap increase.

Many small suppliers joined the market after the regulator dropped the barriers to entry for the energy supply market in 2014 to make it easier for entrepreneurs to set up an energy company without strong links to big banks and investors. It was designed to increase competition for the legacy Big Six suppliers, and caused the market to swell from less than a dozen to about 70 at the beginning of the year.

The regulator has already backtracked on the scheme, setting tougher financial stress tests for companies which hope to become energy suppliers. But the energy crisis may rewind seven years of loose regulation over six months, which some fear may leave only 10 suppliers standing by spring.

Fossil-fuel heavy industry

The impact of the energy crisis will not be contained to rising energy bills and struggling suppliers. Large steelmakers, chemical factories and manufacturers are all vulnerable to the impact of energy costs and are already feeling the financial pain of the energy price shock.

The steel industry association UK Steel has warned that steelmakers are already halting work during the hours of peak power demand to avoid record high prices. The soaring cost of gas has caused two fertiliser companies in Teesside and Cheshire to shut for the winter, and another in Hull to reduce production by 40%.

This has knock-on effects for farming, meat production and the food and drinks industry. One of the byproducts of fertiliser factories is carbon dioxide which is used to make fizzy drinks and dry ice to keep food cold during transport. It is also used in abattoirs to stun animals before slaughter.

The government faces rising calls to tackle the problem of unaffordable energy before it erodes the UK’s post-Covid economic recovery. The UK may not run out of gas, but running out of affordable gas would be problematic too.

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V. I. Lenin

The trade unions, the present situation, and trotsky’s mistakes [1].

Speech Delivered At A Joint Meeting Of Communist Delegates To The Eighth Congress Of Soviets, Communist Members Of The All-Russia Central Council Of Trade Unions And Communist Members Of The Moscow City Council Of Trade Unions December 30, 1920

Delivered: 30 December, 1920 First Published: Published in pamphlet form in 1921;Published according to the pamphlet text collated with the verbatim report edited by Lenin. Source: Lenin’s Collected Works , 1st English Edition, Progress Publishers, Moscow, 1965, Volume 32 , pages 19-42 Translated: Yuri Sdobnikov Transcription\HTML Markup: David Walters & R. Cymbala Copyleft: V. I. Lenin Internet Archive (www.marx.org) 2002. Permission is granted to copy and/or distribute this document under the terms of the GNU Free Documentation License

Comrades, I must first of all apologise for departing from the rules of procedure, for anyone wishing to take part in the debate should have heard the report, the second report and the speeches. I am so unwell, unfortunately, that I have been unable to do this. But I was able yesterday to read the principal printed documents and to prepare my remarks. This departure from the rules will naturally cause you some inconvenience; not having heard the other speeches, I may go over old ground and leave out what should be dealt with. But I had no choice.

My principal material is Comrade Trotsky ’s pamphlet, The Role and Tasks of the Trade Unions . When I compare it with the theses he submitted to the Central Committee, and go over it very carefully, I am amazed at the number of theoretical mistakes and glaring blunders it contains. How could anyone starting a big Party discussion on this question produce such a sorry excuse for a carefully thought out statement? Let me go over the main points which, I think, contain the original fundamental theoretical errors.

Trade unions are not just historically necessary; they are historically inevitable as an organisation of the industrial proletariat, and, under the dictatorship of the proletariat, embrace nearly the whole of it. This is basic, but Comrade Trotsky keeps forgetting it; he neither appreciates it nor makes it his point of departure, all this while dealing With “The Role and Tasks of the Trade Unions”, a subject of infinite compass.

It follows from what I have said that the trade unions have an extremely important part to play at every step of the dictatorship of the proletariat. But what is their part? I find that it is a most unusual one, as soon as I delve into this question, which is one of the most fundamental theoretically. On the one hand, the trade unions, which take in all industrial workers, are an organisation of the ruling, dominant, governing class, which has now set up a dictatorship and is exercising coercion through the state. But it is not a state organisation; nor is it one designed for coercion, but for education. It is an organisation designed to draw in and to train; it is, in fact, a school: a school of administration, a school of economic management, a school of communism. It is a very unusual type of school, because there are no teachers or pupils; this is an extremely unusual combination of what has necessarily come down to us from capitalism, and what comes from the ranks of the advanced revolutionary detachments, which you might call the revolutionary vanguard of the proletariat. To talk about the role of the trade unions without taking these truths into account is to fall straight into a number of errors.

Within the system of the dictatorship of the proletariat, the trade unions stand, if I may say so, between the Party and the government. In the transition to socialism the dictatorship of the proletariat is inevitable, but it is not exercised by an organisation which takes in all industrial workers. Why not? The answer is given in the theses of the Second Congress of the Communist International on the role of political parties in general. I will not go into this here. What happens is that the Party, shall we say, absorbs the vanguard of the proletariat, and this vanguard exercises the dictatorship of the proletariat. The dictatorship cannot be exercised or the functions of government performed without a foundation such as the trade unions. These functions, however, have to be performed through the medium of special institutions which are also of a new type, namely, the Soviets. What are the practical conclusions to be drawn from this peculiar situation? They are, on the one hand, that the trade unions are a link between the vanguard and the masses, and by their daily work bring conviction to the masses, the masses of the class which alone is capable of taking us from capitalism to communism. On the other hand, the trade unions are a “reservoir” of the state power. This is what the trade unions are in the period of transition from capitalism to communism. In general, this transition cannot be achieved without the leadership of that class which is the only class capitalism has trained for large-scale production and which alone is divorced from the interests of the petty proprietor. But the dictatorship of the proletariat cannot be exercised through an organisation embracing the whole of that class, because in all capitalist countries (and not only over here, in one of the most backward) the proletariat is still so divided, so degraded, and so corrupted in parts (by imperialism in some countries) that an organisation taking in the whole proletariat cannot directly exercise proletarian dictatorship. It can be exercised only by a vanguard that has absorbed the revolutionary energy of the class. The whole is like an arrangement of cogwheels. Such is the basic mechanism of the dictatorship of the proletariat, and of the essentials of transition from capitalism to communism. From this alone it is evident that there is something fundamentally wrong in principle when Comrade Trotsky points, in his first thesis, to “ideological confusion”, and speaks of a crisis as existing specifically and particularly in the trade unions. If we are to speak of a crisis, we can do so only after analysing the political situation. It is Trotsky who is in “ideological confusion”, because in this key question of the trade unions’ role, from the standpoint of transition from capitalism to communism, he has lost sight of the fact that we have here a complex arrangement of cogwheels which cannot be a simple one; for the dictatorship of the proletariat cannot be exercised by a mass proletarian organisation. It cannot work without a number of “transmission belts” running from the vanguard to the mass of the advanced class, and from the latter to the mass of the working people. In Russia, this mass is a peasant one. There is no such mass anywhere else, but even in the most advanced countries there is a non-proletarian, or a not entirely proletarian, mass. That is in itself enough to produce ideological confusion. But it’s no use Trotsky’s pinning it on others.

When I consider the role of the trade unions in production, find that Trotsky ’s basic mistake lies in his always dealing with it “in principle “, as a matter of “general principle”. All his theses are based on “general principle”, an approach which is in itself fundamentally wrong, quite apart from the fact that the Ninth Party Congress said enough and more than enough about the trade unions’ role in production, [2] and quite apart from the fact that in his own theses Trotsky quotes the perfectly clear statements of Lozovsky and Tomsky, who were to be his “whipping boys” and an excuse for an exercise in polemics. It turns out that there is, after all, no clash of principle, and the choice of Tomsky and Lozovsky, who wrote what Trotsky himself quotes, was an unfortunate one indeed. However hard we may look, we shall not find here any serious divergence of principle. In general, Comrade Trotsky’s great mistake, his mistake of principle, lies in the fact that by raising the question of “principle” at this time he is dragging back the Party and the Soviet power. We have, thank heaven, done with principles and have gone on to practical business. We chatted about principles—rather more than we should have—at the Smolny. Today, three years later, we have decrees on all points of the production problem, and on many of its components; but such is the sad fate of our decrees: they are signed, and then we ourselves forget about them and fail to carry them out. Meanwhile, arguments about principles and differences of principle are invented. I shall later on quote a decree dealing with the trade unions’ role in production, a decree all of us, including myself, I confess, have forgotten.

The actual differences, apart from those I have listed, really have nothing to do with general principles. I have had to enumerate my “differences” with Comrade Trotsky because, with such a broad theme as “The Role and Tasks of the Trade Unions”, he has, I am quite sure, made a number of mistakes bearing on the very essence of the dictatorship of the proletariat. But, this apart, one may well ask, why is it that we cannot work together, as we so badly need to do? It is because of our different approach to the mass, the different way of winning it over and keeping in touch with it. That is the whole point. And this makes the trade union a very peculiar institution, which is set up under capitalism, which inevitably exists in the transition from capitalism to communism, and whose future is a question mark. The time when the trade unions are actually called into question is a long way off: it will be up to our grandchildren to discuss that. What matters now is how to approach the mass, to establish contact with it and win it over, and how to get the intricate transmission system working (how to run the dictatorship of the proletariat). Note that when I speak oI the intricate transmission system I do not mean the machinery of the Soviets. What it may have in the way of intricacy of transmission comes under a special head. I have only been considering, in principle and in the abstract, class relations in capitalist society, which consists of a proletariat, a non-proletarian mass of working people, a petty bourgeoisie and a bourgeoisie. This alone yields an extremely complicated transmission system owing to what has been created by capitalism, quite apart from any red-tape in the Soviet administrative machinery. And that is the main point to be considered in analysing the difficulties of the trade unions’ “task”. Let me say this again: the actual differences do not lie where Comrade Trotsky sees them but in the question of how to approach the mass, win it over, and keep in touch with it. I must say that had we made a detailed, even if small-scale, study of our own experience and practices, we should have managed to avoid the hundreds of quite unnecessary “differences” and errors of principle in which Comrade Trotsky’s pamphlet abounds. Some of his theses, for instance, polemicise against “Soviet trade-unionism”. As if we hadn’t enough trouble already, a new bogey has been invented. Who do you think it is? Comrade Ryazanov, of all people. I have known him for twenty odd years. You have known him less than that, but equally as well by his work. You are very well aware that assessing slogans is not one of his virtues, which he undoubtedly has. Shall we then produce theses to show that “Soviet trade-unionism” is just something that Comrade Ryazanov happened to say with little relevance? Is that being serious? If it is, we shall end up with having “Soviet trade unionism”, “Soviet anti-peace-signing”, and what not! A Soviet “ism” could be invented on every single point. ( Ryazanov : “Soviet anti-Brestism.”) Exactly, “Soviet anti Brestism”.

While betraying this lack of thoughtfulness, Comrade Trotsky falls into error himself. He seems to say that in a workers’ state it is not the business of the trade unions to stand up for the material and spiritual interests of the working class. That is a mistake. Comrade Trotsky speaks of a “workers’ state”. May I say that this is an abstraction. It was natural for us to write about a workers’ state in 1917; but it is now a patent error to say: “Since this is a workers’ state without any bourgeoisie, against whom then is the working class to be protected, and for what purpose?” The whole point is that it is not quite a workers’ state. That is where Comrade Trotsky makes one of his main mistakes. We have got down from general principles to practical discussion and decrees, and here we are being dragged back and prevented from tackling the business at hand. This will not do. For one thing, ours is not actually a workers’ state but a workers’ and peasants’ state. And a lot depends on that. ( Bukharin : “What kind of state? A workers’ and peasants’ state?”) Comrade Bukharin back there may well shout “What kind of state? A workers’ and peasants’ state?” I shall not stop to answer him. Anyone who has a mind to should recall the recent Congress of Soviets, [3] and that will be answer enough.

But that is not all. Our Party Programme—a document which the author of the ABC of Communism knows very well—shows that ours is a workers’ state with a bureacratic twist to it . We have had to mark it with this dismal, shall I say, tag. There you have the reality of the transition. Well, is it right to say that in a state that has taken this shape in practice the trade unions have nothing to protect, or that we can do without them in protecting the material and spiritual interests of the massively organised proletariat? No, this reasoning is theoretically quite wrong. It takes us into the sphere of abstraction or an ideal we shall achieve in 15 or 20 years’ time, and I am not so sure that we shall have achieved it even by then. What we actually have before us is a reality of which we have a good deal of knowledge, provided, that is, we keep our heads, and do not let ourselves be carried awav by intellectualist talk or abstract reasoning, or by what may appear to be “theory” but is in fact error and misapprehension of the peculiarities of transition. We now have a state under which it is the business of the massively organised proletariat to protect itself, while we, for our part, must use these workers’ organisations to protect the workers from their state, and to get them to protect our state. Both forms of protection are achieved through the peculiar interweaving of our state measures and our agreeing or “coalescing” with our trade unions.

I shall have more to say about this coalescing later on. But the word itself shows that it is a mistake to conjure up an enemy in the shape of “Soviet trade-unionism”, for “coalescing” implies the existence of distinct things that have yet to be coalesced: “coalescing” implies the need to be able to use measures of the state power to protect the material and spiritual interests of the massively organised proletariat from that very same state power. When the coalescing has produced coalescence and integration , we shall meet in congress for a business-like discussion of actual experience, instead of “disagreements” on principle or theoretical reasoning in the abstract. There is an equally lame attempt to find differences of principle with Comrades Tomsky and Lozovsky, whom Comrade Trotsky treats as trade union “bureaucrats”—I shall later on say which side in this controversy tends to be bureaucratic. We all know that while Comrade Ryazanov may love a slogan, and must have one which is all but an expression of principle, it is not one of Comrade Tomsky’s many vices. I think, therefore, that it would be going a bit too far to challenge Comrade Tomsky to a battle of principles on this score (as Comrade Trotsky has done). I am positively astonished at this. One would have thought that we had grown up since the days when we all sinned a great deal in the way of factional, theoretical and various other disagreements—although we naturally did some good as well. It is time we stopped inventing and blowing up differences of principle and got down to practical work. I never knew that Tomsky was eminently a theoretician or that he claimed to be one; it may be one of his failings, but that is something else again. Tomsky, who has been working very smoothly with the trade union- movement, must in his position provide a reflection of this complex transition—whether he should do so consciously or unconsciously is quite another matter and I am not saying that he has always done it consciously—so that if something is hurting the mass, and they do not know what it is, and he does not know what it is ( applause , laughter ) but raises a howl, I say that is not a failing but should be put down to his credit. I am quite sure that Tomsky has many partial theoretical mistakes. And if we all sat down to a table and started thoughtfully writing resolutions or theses, we should correct them all; we might not even bother to do that because production work is more interesting than the rectifying of minute theoretical disagreements.

I come now to “industrial democracy”, shall I say, for Bukharin’s benefit. We all know that everyone has his weak points, that even big men have little weak spots, and this also goes for Bukharin. He seems to be incapable of resisting any little word with a flourish to it. He seemed to derive an almost sensuous pleasure from writing the resolution on industrial democracy at the Central Committee Plenum on December 7. But the closer I look at this “industrial democracy”, the more clearly I see that it is half-baked and theoretically false. It is nothing but a hodge-podge. With this as an example, let me say once again, at a Party meeting at least: “Comrade N. I. Bukharin, the Republic, theory and you yourself will benefit from less verbal extravagance.” ( Applause .) Industry is indispensable. Democracy is a category proper only to the political sphere. There can be no objection to the use of this word in speeches or articles. An article takes up and clearly expresses one relationship and no more. But it is quite strange to hear you trying to turn this into a thesis, and to see you wanting to coin it into a slogan, uniting the “ayes” and the “nays”; it is strange to hear you say, like Trotsky, that the Party will have “to choose between two trends”. I shall deal separately with whether the Party must do any “choosing” and who is to blame for putting the Party in this position of having to “choose”. Things being what they are, we say: “At any rate, see that you choose fewer slogans, like ’industrial democracy’, which contain nothing but confusion and are theoretically wrong.” Both Trotsky and Bukharin failed to think out this term theoretically and ended up in confusion. “Industrial democracy” suggests things well beyond the circle of ideas with which they were carried away. They wanted to lay greater emphasis and focus attention on industry. It is one thing to emphasise something in an article or speech; it is quite another to frame it into a thesis and ask the Party to choose, and so I say: cast your vote against it, because it is confusion. Industry is indispensable, democracy is not. Industrial democracy breeds some utterly false ideas. The idea of one-man management was advocated only a little while ago. We must not make a mess of things and confuse people: how do you expect them to know when you want democracy, when one-man management, and when dictatorship. But on no account must we renounce dictatorship either—I hear Bukharin behind me growling: “Quite right.” ( Laughter . Applause .)

But to go on. Since September we have been talking about switching from the principle of priority to that of equalisation, and we have said as much in the resolution of the all-Party conference, which was approved by the Central Committee. [4] The question is not an easy one, because we find that we have to combine equalisation with priority, which are incompatible. But after all we do have some knowledge of Marxism and have learned how and when opposites can and must be combined; and what is most important is that in the three and a half years of our revolution we have actually combined opposites again and again.

The question obviously requires thoughtfulness and circumspection. After all, we did discuss these questions of principle at those deplorable plenary meetings of the Central Committee [4b] —which yielded the groups of seven and eight, and Comrade Bukharin’s celebrated “buffer group” [6] —and we did establish that there was no easy transition from the priority principle to that of equalisation. We shall have to put in a bit of effort to implement the decision of the September Conference. After all, these opposite terms can be combined either into a cacophony or a symphony. Priority implies preference for one industry out of a group of vital industries because of its greater urgency. What does such preference entail? How great can it be? This is a difficult question, and I must say that it will take more than zeal to solve it; it may even take more than a heroic effort on the part of a man who is possibly endowed with many excellent qualities and who will do wonders on the right job; this is a very peculiar matter and calls for the correct approach. And so if we are to raise this question of priority and equalisation we must first of all give it some careful thought, but that is just what we fail to find in Comrade Trotsky’s work; the further he goes in revising his original theses, the more mistakes he makes. Here is what we find in his latest theses:

“The equalisation line should be pursued in the sphere of consumption , that is, the conditions of the working people’s existence as individuals. In the sphere of production , the principle of priority will long remain decisive for us”. . . (thesis 41, p. 31 of Trotsky’s pamphlet).

This is a real theoretical muddle. It is all wrong. Priority is preference, but it is nothing without preference in consumption. If all the preference I get is a couple of ounces of bread a day I am not likely to be very happy. The preference part of priority implies preference in consumption as well. Otherwise, priority is a pipe dream, a fleeting cloud, and we are, after all, materialists. The workers are also materialists; if you say shock work, they say, let’s have the bread, and the clothes, and the beef. That is the view we now take, and have always taken, in discussing these questions time without number with reference to various concrete matters in the Council of Defence, [7] when one would say: “I’m doing shock work”, and would clamour for boots, and another: “I get the boots, otherwise your shock workers won’t hold out, and all your priority will fizzle out.”

We find, therefore, that in the theses the approach to equalisation and priority is basically wrong. What is more, it is a retreat from what has actually been achieved and tested in practice. We can’t have that; it will lead to no good.

Then there is the question of “coalescing “. The best thing to do about “coalescing” right now is to keep quiet. Speech is silver, but silence is golden. Why so? It is because we have got down to coalescing in practice; there is not a single large gubernia economic council, no major department of the Supreme Economic Council, the People’s Commissariat for Communications, etc., where something is not being coalesced in practice. But are the results all they should be? Ay, there’s the rub. Look at the way coalescence has actually been carried out, and what it has produced. There are countless decrees introducing coalescence in the various institutions. But we have yet to make a business-like study of our own practical experience; we have yet to go into the actual results of all this; we have yet to discover what a certain type of coalescence has produced in a particular industry, what happened when member X of the gubernia trade union council held post Y in the gubernia economic council, how many months he was at it, etc. What we have not failed to do is to invent a disagreement on coalescence as a principle, and make a mistake in the process, but then we have always been quick at that sort of thing; but we were not up to the mark when it came to analysing and verifying our own experience. When we have congresses of Soviets with committees not only on the application of the better-farming law in the various agricultural areas but also on coalescence and its results in the Saratov Gubernia flour-milling industry, the Petrograd metal industry, the Donbas coal industry, etc., and when these committees, having mustered the facts, declare: “We have made a study of so and so”, then I shall say: “Now we have got down to business, we have finally grown up.” But could anything be more erroneous and deplorable than the fact that we are being presented with “theses” splitting hairs over the principle of coalescence, after we have been at it for three years? We have taken the path of coalescence, and I am sure it was the right thing to do, but we have not yet made an adequate study of the results of our experience. That is why keeping quiet is the only common sense tactics on the question of coalescence.

A study must be made of practical experience. I have signed decrees and resolutions containing instructions on practical coalescence, and no theory is half so important as practice. That is why when I hear: “Let’s discuss ’coalescence’”, I say: “Let’s analyse what we have done.” There is no doubt that we have made many mistakes. It may well be that a great part of our decrees need amending. I accept that, for I am not in the least enamoured of decrees. But in that case let us have some practical proposals as to what actually has to be altered. That would be a business-like approach. That would not be a waste of time. That would not lead to bureaucratic projecteering But I find that that is exactly what’s wrong with Trotsky’s “Practical Conclusions”, Part VI of his pamphlet. He says that from one-third to one-half of the members of the All Russia Central Council of Trade Unions and the Presidium of the Supreme Eccnomic Council should serve on both bodies, and from one-half to two-thirds, on the collegiums, etc. Why so? No special reason, just “rule of thumb”. It is true, of course, that rule of thumb is frequently used to lay down similar proportions in our decrees, but then why is it inevitable in decrees? I hold no brief for all decrees as such and have no intention of making them appear better than they actually are. Quite often rule of thumb is used in them to fix such purely arbitrary proportions as one-half or one-third of the total number of members, etc. When a decree says that, it means: try doing it this way, and later on we shall assess the results of your “try out”. We shall later sort out the results. After sorting them out, we shall move on. We are working on coalescence and we expect to improve it because we are becoming more efficient and practical-minded.

But I seem to have lapsed into “production propaganda”. That can’t be helped. It is a question that needs dealing with in any discussion of the role of the trade unions in production.

My next question will therefore be that of production propaganda. This again is a practical matter and we approach it accordingly. Government agencies have already been set up to conduct production propaganda. I can’t tell whether they are good or had; they have to be tested and there’s no need for any “theses” on this subject at all.

If we take a general view of the part trade unions have to play in industry, we need not, in this question of democracy, go beyond the usual democratic practices. Nothing will come of such tricky phrases as “industrial democracy”, for they are all wrong. That is the first point. The second is production propaganda. The agencies are there. Trotsky’s theses deal with production propaganda. That is quite useless, because in this case theses are old hat. We do not know as yet whether the agencies are good or bad. But we can tell after testing them in action. Let us do some studying and polling. Assuming, let us say, that a congress has 10 committees with 10 men on each, let us ask: “You have been dealing with production propaganda, haven ’t you? What are the results?” Having made a study of this, we should reward those who have done especially well, and discard what has proved unsuccessful. We do have some practical experience; it may not be much but it is there; yet we are being dragged away from it and back to these “theses on principles”. This looks more like a “reactionary” movement than “trade unionism”.

There is then the third point, that of bonuses. Here is the role and task of the trade unions in production: distribution of bonuses in kind . A start on it has been made. Things have been set in motion. Five hundred thousand poods of grain had been allocated for the purpose, and one hundred and seventy thousand has been distributed. How well and how correctly, I cannot tell. The Council of People’s Commissars was told that they were not making a good job of this distribution, which turned out to be an additional wage rather than a bonus. This was pointed out by officials of the trade unions and the People’s Commissariat for Labour. We appointed a commission to look into the matter but that has not yet been done. One hundred and seventy thousand poods of grain has been given away, but this needs to be done in such a way as to reward those who display the heroism, the zeal, the talent, and the dedication of the thrifty manager, in a word, all the qualities that Trotsky extols. But the task now is not to extol this in theses but to provide the bread and the beef. Wouldn’t it be better, for instance, to deprive one category of workers of their beef and give it as a bonus to workers designated as “shock” workers? We do not renounce that kind of priority. That is a priority we need. Let us take a closer look at our practices in the application of priority.

The fourth point is disciplinary courts. I hope Comrade Bukharin will not take offence if I say that without disciplinary courts the role of the trade unions in industry, “industrial democracy “, is a mere trifle. But the fact is that there is nothing at all about this in your theses. “Great grief!” is therefore the only thing that can be said about Trotsky’s theses and Bukharin’s attitude, from the standpoint of principle, theory and practice.

I am confirmed in this conclusion when I say to myself: yours is not a Marxist approach to the question. This quite apart from the fact that there are a number of theoretical mistakes in the theses It is not a Marxist approach to the evaluation of the “role and tasks of the trade unions”, because such a broad subject cannot be tackled without giving thought to the peculiar political aspects of the present situation. After all, Comrade Bukharin and I did say in the resolution of the Ninth Congress of the R.C.P. on trade unions that politics is the most concentrated expression of economics.

If we analysed the current political situation, we might say that we were going through a transition period within a transition period. The whole of the dictatorship of the proletariat is a transition period, but we now have, you might say, a heap of new transition periods: the demobilisation of the army, the end of the war, the possibility of having a much longer breathing space in peace than before, and a more solid transition from the war front to the labour front. This—and this alone—is causing a change in the attitude of the proletarian class to the peasant class. What kind of change is it? Now this calls for a close examination, but nothing of the sort follows from your theses. Until we have taken this close look, we must learn to wait. The people are overweary, considerable stocks that had to be used for certain priority industries have been so used; the proletariat’s attitude to the peasantry is undergoing a change. The war weariness is terrible, and the needs have increased, but production has increased insufficiently or not at all. On the other hand, as I said in my report to the Eighth Congress of Soviets, our application of coercion was correct and successful whenever we had been able to back it up from the start with persuasion. I must say that Trotsky and Bukharin have entirely failed to take account of this very important consideration.

Have we laid a sufficiently broad and solid base of persuasion for all these new production tasks? No, indeed, we have barely started doing it. We have not yet made the masses a party to them. Now I ask you, can the masses tackle these new assignments right away? No, they cannot, because while there is now no need for special propaganda on the question of, say, whether Wrangel the landowner should be overthrown or whether any sacrifices should be spared for the purpose, we have just started to work on this question of the role of the trade unions in production, and I mean the business aspect of the matter and not the question of “principle”, the reasoning about “Soviet trade-unionism” and such like trifles; we have just set up the agency for production propaganda, but we have as yet no experience. We have introduced the payment of bonuses in kind, but we lack the experience. We have set up the disciplinary courts, but we are not yet aware of the results. Still, from the political standpoint it is the preparedness of the masses that is crucial. Has the question been prepared, studied, weighed, and considered from this angle? No, far from it. And that is a basic, deep-going and dangerous political mistake, because if ever there was need to act according to the rule of measuring your cloth seven times before cutting it once, it is in this question. We find instead that the cutting has been started in earnest without a single measure having been taken. We are told that “the Party must choose between two trends”, but the false slogan of “industrial democracy “ was invented without a single measuring.

We must try to understand the meaning of this slogan, especially in the present political situation, when the masses are confronted with bureaucratic practices in visual form, and when we have the question itself on the agenda. Comrade Trotsky says in his theses that on the question of workers’ democracy it remains for the Congress to “enter it unanimously in the record”. That is not correct. There is more to it than an entry in the record; an entry in the record fixes what has been fully weighed and measured, whereas the question of industrial democracy is far from having been fully weighed, tried and tested. Just think how the masses may interpret this slogan of “industrial democracy”.

“We, the rank and file who work among the masses, say that there is need for new blood, that things must be corrected and the bureaucrats ousted, and here you are beating about the bush, talking about getting on with production and displaying democracy in achieving success in production; we refuse to get on with production under such a bureaucratic set-up of central and other boards, we want a different one.” You have not given the masses a chance to discuss things, to see the point, and to think it over; you have not allowed the Party to gain fresh experience but are already acting in haste, overdoing it, and producing formulas which are theoretically false. Just think how this mistake will be further amplified by unduly zealous functionaries! A political leader is responsible not only for the quality of his leadership but also for the acts of those he leads. He may now and again be unaware of what they are about, he may often wish they had not done some thing, but the responsibility still falls on him.

I now come to the November 9 and December 7 plenary meetings of the Central Committee, which gave expression to all these mistakes in action, rather than in logical categories, premises and theoretical reasoning. This threw the Centrai Committee into confusion; it is the first time this has happened in our Party’s history, in time of revolution, and it is dangerous. The crux was that there was a division, there was the “buffer” group of Bukharin, Preobrazhensky and Serebryakov, which did the most harm and created the most confusion.

You will recall the story of Glavpolitput [8] and Tsektran. [9] The resolution of the Ninth Congress of the R.C.P. in April 1920 said that Glavpolitput was being set up as a “temporary” institution, and that conditions should be brought back to normal “as soon as possible”. In September you read, “Return to normal conditions”. [9b] The plenary meeting was held in November (November 9), and Trotsky came up with his theses and ideas about trade-unionism. How ever fine some of his points about production propaganda may be, he should have been told that all this was neither here nor there, quite beside the mark, and a step backward it is something the C.C. should not be dealing with at present. Bukharin says: “It is very good.” It may be very good, but that is no answer to the question. After a heated debate, a resolution is adopted by 10 to 4 saying in a polite and comradely way that Tsektran has itself “already got down to . . . strengthening and developing methods of proletarian democracy within the union”. It adds that Tsektran must “take an active part in the general work of the All-Russia Central Council of Trade Unions, being incorporated in it on an egual footing with other trade union bodies”.

What is the gist of the Central Committee’s decision? It is obviously this: “Comrades of Tsektran! You must do more than go through the motions of carrying out Congress and C.C. decisions, you must actually do so to help all trade unions by your work, wipe out every trace of red tape, favouritism, arrogance, the we-are-better-than-you attitude, and boasts of being richer and getting more aid.”

We then get down to brass tacks. A commission is set up, and the names of its members are published. Trotsky walks out, refuses to serve on the commission, and disrupts its work. What are his reasons? There is only one. Lutovinov is apt to play at opposition. That is true, and that also goes for Osinsky. Frankly speaking, it is not a pleasant game. But do you call that a reason? Osinsky was making an excellent job of the seed campaign. The thing to do was to work with him, in spite of his “opposition campaign”, for this business of disrupting the work of a commission is bureaucratic, un-Soviet, un-socialist, incorrect and politically harmful. Such methods are doubly incorrect and politically harmful at a time when there is need to separate the wheat from the chaff within the “opposition”. When Osinsky conducts an “opposition campaign”, I tell him: “This is a harmful campaign”, but it is a pleasure to see him conduct the seed campaign. I shall not deny that, like Ishchenko and Shlyapnikov, Lutovinov is making a mistake in his “opposition campaign”, but that is no reason to disrupt the work of a commission.

What did the commission in fact signify? It signified transition to practical work from intellectualist talk about sterile disagreements. What the commission was due to discuss and deal with was production propaganda, bonuses, and disciplinary courts. It was then that Comrade Bukharin, the head of the “buffer group”, together with Preobrazhensky and Serebryakov, seeing the Central Committee dangerously divided, set out to create a buffer, one that I find difficult to describe in parliamentary terms. If I could draw cartoons as well as Comrade Bukharin does, I would depict him as a man pouring a bucket of kerosene on the flames, and give the following caption: “Buffer kerosene”. Comrade Bukharin wanted to create something, and his intentions were no doubt most sincere and entirely in the “buffer” spirit. But the buffer failed to materialise; the upshot was that he failed to take account of the political situation and, what is more, made some theoretical mistakes.

Should all such disputes have been brought up for broad discussion? Was it worth going into these trifles? Was it worth wasting the few precious weeks before a Party congress? Wecould have used the timo to analyse and study the question of bonuses, disciplinary courts and coalescence. Those are the questions we could have given a practical solution to in the C.C. commission. If Comrade Bukharin wished to create a buffer, instead of giving a display of barking up the wrong tree, he should have demanded and insisted that Comrade Trotsky remained on the commission. If he had said and done that, we should have been on the right track, with the commission looking into the practical aspects of such things as one-man management, democracy, appointees, etc.

But to go on. By December (the December 7 Plenary Meeting), we were already faced with this flare-up of the watermen, which intensified the conflict, and as a result there were now eight votes in the Central Committee to our seven. Comrade Bukharin, in an effort to bring about a “reconciliation” through the use of his “buffer”, hastily wrote the “theoretical” part of the December plenum’s resolution, but with the commission a shambles, nothing, of course, could come of it.

Where did Glavpolitput and Tsektran err? Certainly not in their use of coercion; that goes to their credit. Their mistake was that they failed to switch to normal trade union work at the right time and without conflict, as the Ninth Congress of the R.C.P. required; they failed to adapt themselves to the trade unions and help them by meeting them on an equal footing. Heroism, zeal, etc., are the positive side of military experience; red-tape and arrogance are the negative side of the experience of the worst military types. Trotsky’s theses, whatever his intentions, do not tend to play up the best, but the worst in military experience. It must be borne in mind that a political leader is responsible not only for his own policy but also for the acts of those he leads.

The last thing I want to tell you about—something I called myself a fool for yesterday—is that I had altogether overlooked Comrade Rudzutak’s theses. His weak point is that he does not speak in ringing tones; he is not an impressive or eloquent speaker. He is liable to be overlooked. Unable to attend the meetings yesterday, I went through my material and found a printed leaflet issued for the Fifth All-Russia Trade Union Conference, which was-held from November 2 to 6, 1920. [11] It is called: The Tasks of the Trade Unions in Production . Let me read it to you, it is not long. Fifth All-Russia Trade Union Conference The tasks of the trade unions in production (Theses Of Comrade Rudzutak’s Report)

1. Immediately after the October Revolution, the trade unions proved to be almost the only bodies which, while exercising workers’ control , were able and bound to undertake the work of organising and managing production . In that early period of the Soviet power, no state apparatus for the management of the national economy had yet been set up, while sabotage on the part of factory owners and senior technicians brought the working class squarely up against the task of safeguarding industry and getting the whole of the country’s economic apparatus back into normal running order.

2. In the subsequent period of the Supreme Economic Council’s work, when a considerable part of it consisted in liquidating private enterprises and organising state management to run them, the trade unions carried on this work jointly and side by side with the state economic management agencies .

This parallel set-up was explained and justified by the weakness of the state agencies; historically it was vindicated by the establishment of full contact between the trade unions and the economic management agencies.

3. The centre of gravity in the management of industry and the drafting of a production programme shifted to these agencies as a result of their administration, the gradual spread of their control over production and management and the-co-ordination of the several parts. In view of this, the work of the trade unions in organising production was reduced to participation in forming the collegiums of chief administrations, central boards, and factory managements.

4. At the present time, we are once again squarely faced with the question of establishing the closest possible ties between the economic agencies of the Soviet Republic and the trade unions, for the best use must be made of every working individual, and the whole mass of producers must be induced to take a conscious part in production, for the state apparatus of economic management, gradually gaining in size and complexity, has been transformed into a huge bureaucratic machine which is out of all proportion to the scale of industry, and is inevitably impelling the trade unions to take direct part in organising production not only through its men in the economic agencies but also as an organised whole.

5. While the Supreme Economic Council’s point of departure in drawing up an overall production programme is the availability of the material elements of production (raw materials, fuel, the state of machinery, etc.), the trade unions must look at it from the standpoint of organising labour for the tasks of production and its best use. Therefore, the overall production programme , in whole and in part , must be drawn up with the participation of the trade unions in order to combine the use of the material resources of production and manpower in the best possible way.

6. Only if the whole mass of those engaged in production consciously take a hand in establishing real labour discipline, fighting deserters from the labour front, etc., can these tasks be fulfilled. Bureaueratic methods and orders will not do; it must be brought home to each participant in production that his production tasks are appropriate and important; that each must take a hand not only in fulfilling his assignments, but also play an intelligent part in correcting any technical and organisational defects in the sphere of production.

The tasks of the trade unions in this sphere are tremendous. They must teach their members in each shop and in each factory to react to and take account of all defects in the use of manpower arising from improper handling of technical means or unsatisfactory management. The sum total of the experience gained by separate enterprises and industry as a whole must be used to combat red-tape, bureaucratic practices and carelessness.

7. In order to lay special emphasis on the importance of these production tasks, they must be organisationally worked into current operations. As the economic departments of the trade unions, which are being set up in pursuance of the decision of the Third All-Russia Congress, extend their activity, they must gradually explain and define the nature of all trade union work. Thus, in the present social conditions, when all of production is geared to the satisfaction of the working people’s needs, wage rates and bonuses must be closely tied in with and must depend on the extent to which the production plan is fulfilled . Bonuses in kind and partial payment of wages in kind must be gradually transformed into a system of workers’ supply which depends on the level of labour productivity.

8. Trade union work on these lines would, on the one hand, put an end to the existence of parallel bodies ( political departments , etc .) and, on the other, restore the close ties between the masses and the economic management agencies.

9. After the Third Congress, the trade unions largely failed to carry out their programme for participation in economic construction owing, first, to the military conditions , and second, to their organisational weakness and isolation from the administrative and practical work of the economic bodies.

10. In view of this, the trade unions should set themselves the following immediate practical tasks: a) the most active participation in solving production and management problems; b) direct participation, with the respective economic agencies, in setting up competent administrative bodies; c) careful consideration of the various types of management bodies , and their influence on production; d) unfailing participation in working out and laying down economic plans and production programmes; e) organisation of labour in accordance with the economic priorities; f) development of an extensive organization for production agitation and propaganda .

11. The economic departments of the trade unions and of their organisations must be actually transformed into powerful and expeditious levers for the trade unions’ systematic participation in organising production.

12. In the matter of providing workers with steady material supplies, the trade unions must shift their influence onto the distribution bodies of the Commissariat for Food , both local and central, taking a practical and business-like part and exercising controI in all the distributive bodies, and paying special attention to the activity of central and gubernia workers’ supply commissions .

13. In view of the fact that the narrow departmental interests of some chief administrations, central boards, etc., have plunged the so-called “priority” into a state of utter confusion, the trade unions must everywhere uphold the real order of economic priorities and review the existing system so as to determine them in accordance with the actual importance of the various industries and the availability of material resources in the country.

14. Special attention must be given to the so-called model group of factories to help them set an example through the organisation of efficient management, labour discipline and trade union activities.

15. In labour organisation, apart from the introduction of a harmonious wage-rate system and the overhaul of output rates, the trade unions should take a firm hand in fighting the various forms of labour desertion (absenteeism, lateness, etc.). The disciplinary courts, which have not received due attention until now, must be turned into a real means of combating breaches of proletarian labour discipline.

16. The economic departments must be entrusted with the fulfilment of these tasks and also the drafting of a practical plan for production propaganda and a number of measures to improve the economic condition of the workers. It is necessary, therefore, to authorise the economic department of the All-Russia Central Council of Trade Unions to call a special All-Russia Conference of Economic Departments in the near future to discuss the practical problems of economic construction in connection with the world of state economic agencies.

I hope you see now why I called myself names. There you have a platform, and it is very much better than the one Comrade Trotsky wrote after a great deal of thinking, and the one Comrade Bukharin wrote (the December 7 Plenum resolution) without any thinking at all. All of us members of the Central Committee who have been out of touch with the trade Union movement for many years would profit from Comrade Rudzutak’s experience, and this also goes for Comrade Trotsky and Comrade Bukharin. The trade unions have adopted this platform.

We all entirely forgot about the disciplinary courts, but “industrial democracy”, without bonuses in kind or disciplinary courts, is nothing but empty talk.

I make a comparison between Rudzutak’s theses and those submitted by Trotsky to the Central Committee. At the end of thesis 5, I read:

“. . a reorganisation of the unions must be started right away, that is, a selection of functionaries must be above all made from precisely that angle”. . . .

There you have an example of the real bureaucratic approach: Trotsky and Krestinsky selecting the trade union “functionaries”!

Let me say this once again: here you have an explanation of Tsektran’s mistake. It was not wrong to use pressure; that goes to its credit. It made the mistake of failing to cope with the general tasks of all the trade unions, of failing to act itself and to help all the trade unions to employ the disciplinary comrades’ courts more correctly, swiftly and successfully. When I read about the disciplinary courts in Comrade Rudzutak’s theses it occurred to me that there might be a decree on this matter. And in fact there was. It is the Regulations Governing Workers’ Disciplinary Comrades’ Courts, issued on November 14, 1919 ( Collection of Statutes No. 537).

The trade unions have the key role in these courts I don’t know how good these courts are, how well they function, and whether they always function. A study of our own practical experience would be a great deal more useful than anything Comrades Trotsky and Bukharin have written.

Let me end by summing up everything there is on the question. I must say that it was a great mistake to put up these disagreements for broad Party discussion and the Party Congress. It was a political mistake. We should have had a business-like discussion in the commission, and only there, and would have in that case moved forward; as it is we are sliding back, and shall keep sliding back to abstract theoretical propositions for several weeks, instead of dealing with the problem in a business-like manner. Personally, I am sick and tired of it, and quite apart from my illness, it would give me great pleasure to get away from it all. I am prepared to seek refuge anywhere.

The net result is that there are a number of theoretical mistakes in Trotsky’s and Bukharin’s theses: they contain a number of things that are wrong in principle. Politically, the whole approach to the matter is utterly tactless. Comrade Trotsky’s “theses” are politically harmful. The sum and substance of his policy is bureaucratic harassment of the trade unions. Our Party Congress will, I am sure, condemn and reject it. ( Prolonged , stormy applause .)

[1] Lenin’s first speech to Party activists in the discussion of the role and tasks of the trade unions in socialist construction was delivered at the Bolshoi Theatre on December 30, 1920.

Trotsky had started the discussion in the Communist group of the Fifth All-Russia Trade Union Conference on November 3 with his call “to tighten the screws of War Communism” as opposed to the Party’s line to stimulate democratic activity in the trade unions.

The disagreements turned “on the different approach to the mass, the way of winning it over, and keeping in touch with it” ( Lenin ). The disagreements in the group were brought before the Central Committee Plenary Meeting. But Trotsky’s December 24 speech before the delegates of the Eighth All-Russia Congress of Soviets and trade union activists carried the issue outside the Central Committee. On December 25, he published his views in a pamphlet.

Lenin was against any discussion, believing that it distracted the Party’s attention and forces from the immediate tasks of fighting the economic dislocation and the famine. In his-speeches and articles— The Party Crisis and Once Again on the Trade Unions, the Current Situation and the Mistakes of Trotsky and Bukharin —he put forward and developed a number of important principles underlying the trade unions’ role in the dictatorship of the proletariat and their tasks in socialist construction.

The discussion lasted more than two months. The overwhelming majority of the Party organisations approved Lenin’s platform and rejected the opposition’s. The results of the discussion were summed up at the Tenth Congress of the Party on March 8-16, 1921.

[2] On its agenda were the current tasks of economic construction and the question of the trade union movement. It defined the short-term economic tasks and stressed the need for the trade unions’ active participation in socialist construction. It adopted the following resolutions: “The Current Tasks of Econormic Construction” and “The Trade Unions and Their Organisation”. See K.P.S.S. v rezolutsiakh i resheniakh syezdov, konferentsi i plenumov TsK (The C.P.S.U. in the Resolutions and Decisions of Congresses, Conferences and C.C Plenary Meetings, Part 1, 1954, pp. 477-90, 490-94).

[3] The reference is to the Eighth All-Russia Congress of Soviets of Workers’, Peasants’, Red Army and Cossack Deputies held in Moscow on December 22-29, 1920. It was attended by 2,537 delegates, the greatest number ever. Of them 1,728 had voice and vote, and 809, voice only. Of the total number of delegates 91.7 per cent were Communists; 2.7, Communist sympathisers; 3.9, non-party people; 0.3, Mensheviks; 0.3, Bundists; 0.15, Left S.R.s; 0.15, anarchists, and 0.8, from other parties.

The Congress met at a time when the war against the foreign intervention and internal counter-revolution was coming to a end, and when the economic front stood out as “the main and most important one” ( Lenin ). On its agenda there were the following questions, the chief of which had been discussed beforehand by the Communist group: report on the activity of the All-Russia Central Executive Committee and the Council of People’s Commissars, electrification of Russia; rehabilitation of industry and transport; development of agricultural production and promotion of farming; efficiency of Soviet establishments and the struggle against bureaucratic practices. These problems were thrashed out in three sections: industry, agriculture and Soviet administration.

Lenin guided much of the work of the Congress. At the plenary meeting on December 22, he gave a report on the activity of the All-Russia Central Executive Committee and the Council of People’s Commissars, and on December 23, he summed up the debate. He spoke six times at the Communist group meetings on December 21, 22, 24 and 27 on the question of concessions and the draft law on measures to consolidate and develop peasant farming. By an overwhelming majority, the Congress adopted a resolution on Lenin’s report, approving the government’s activity, and rejected a draft resolution motioned by the other delegates.

The Congress adopted a plan for the electrification of the country (GOELRO), worked out on Lenin’s initiative and instructions. This was the first long-range economic plan of the Soviet state and Lenin called it “the second Party Programme”. He also wrote the resolution on Krzhizhanovsky’s report.

Another major question on the agenda was a draft law on measures to consolidate and develop peasant farming, which had been adopted by the Council of People’s Commissars on December 14, 1920. Lenin stressed that the law was “a kind of a focus around which hundreds of decrees and bills of the Soviet power were grouped”. Lenin took part in the discussion of its principal clauses by the non-Party peasant delegates to the Congress at a special meeting on December 22, and by the Communist group on December 24 and 27. The draft law was adopted unanimously.

The Congress passed a comprehensive resolution to improve and reorganise the entire Soviet apparatus as required by the transition to peaceful economic construction. It regulated relations between central and local organs of power and administration. The Congress also discussed the reorganisation of the whole system of economic management in accordance with the new economic tasks, and approved a new statute of the Council of Labour and Defence.

It instituted the Order of the Red Banner of Labour as an award for dedication, initiative, efficiency and hard work in solving economic tasks.

[4] The reference is to the resolution of the Ninth All-Russia Conference of the R.C.P.(B.), “The Current Tasks of Party Organisation”. See K.P.S.S. v rezolutsiakh . . . (The C.P.S.U. in the Resolutions and Decisions of Congresses, Conferences and C.C. Plenary Meetings, Part 1, 1954, pp. 506-12).

[4b] The reference is to the November and December plenary meeting of the Central Committee in 1920. For the text of their resolutions see Pravda No. 255 of November 13, and No. 281 of December 14, and also Izvestia of the C.C., R.C.P. [5] No. 26 of December 20.

[5] Izvestia of the Central Committee of the Russian Communist Party was an information organ dealing with Party problems. It was published under a resolution of the Eighth Congress of the R.C.P.(B.) as a weekly supplement to Pravda from May 28, 1919, and as an independent organ from October 1920.

In 1929, it was transformed into a fortnightly, Partiinoye Stroitelstvo ( Party Construction ), and in June 1946 renamed Partiinaya Zhizn ( Party Life ).

[6] The “ buffer group ” took shape during the trade union discussion in 1920-21. It was headed by N. I. Bukharin and included Y. Larin, Y. A. Preobrazhensky, L. P. Serebryakov, G. Y. Sokolnikov, V. N. Yakovleva and others. They tried to reconcile the differences between Lenin and Trotsky’s views, acting as a “buffer” in disagreements on the question of the role and tasks of the trade unions. In fact Bukharin attacked Lenin and defended Trotsky.

Lenin characterised the “buffer” group and its anti-Party views in his article, “The Party Crisis”, in the pamphlet, Once Again on the Trade Unions, the Current Situation and the Mistakes of Trotsky and Bukharin , and elsewhere.

[7] The Council of Workers’ and Peasants’ Defence was set up by the All-Russia Central Executive Committee on November 30, 1918, to implement its September 2, 1918 decree which proclaimed the Soviet Republic a military camp. Lenin was appointed its Chairman. It was vested with extraordinary powers in mobilising the resources of the Soviet state for defence in that exceptionally difficult period.

The Council was the Republic’s chief military-economic and planning centre during the intervention and Civil War and also controlled the activity of the Revolutionary Military Council and other military organs. Its decrees were binding on all Soviet citizens, as well as on central and local agencies. Early in April 1920, it was reorganised into the Council of Labour and Defence (C.L.D.) ( Soviet Truda i Oborony —STO), and under a decision of the Eighth All-Russia Congress of Soviets in December 1920 it began to operate as a government commission responsible for co-ordinating the work of all economic departments. It was abolished in 1937.

[8] Glavpolitput —the Chief Political Department of the People’s Commissariat for Communications—was formed as a provisional organ under the direct leadership of the Party’s Central Committee in February 1919, and in January 1920 it was renamed the Chief Political Administration. It took extraordinary measures to rehabilitate the railways that had been ruined in the imperialist war and the Civil War, to improve Party and political work among railway workers, and to strengthen and stimulate the activity of the railwaymen’s trade union and make it an instrument for the further development of the railways. It introduced military discipline on the railways to gear them to the war effort. The measures effected by Glavpolitput saved the railways from utter ruin, but produced bureaucratic and undemocratic practices in the trade unions and a tendency to lose touch with the masses.

It was abolished by a Central Committee decision on December 7, 1920, at the end of the Civil War and the start of peaceful development.

[9] Tsektran —the Central Committee of the Joint Trade Union of Rail and Water Transport Workers. In September 1920, the two unions were merged to set up a strong centralised administration capable of tackling the tasks of rapidly rehabilitating transport, whose stoppages tended to paralyse the national economy. Its extraordinary powers and military methods of work, which sprang from the enormity of the tasks before it, bred bureaucratic practices, the appointments system, administration by injunction, etc. The plenary meetings of the C.C. on November 8 and December 7, 1920, condemned Tsektran’s methods and adopted a decision to incorporate it into the general system of the All-Russia Central Council of Trade Unions on a par with other unions. Tsektrall was advised to change its methods, develop trade union democracy, make all trade union bodies elective, reduce the appointments system, etc. The First All-Russia Congress of Transport Workers in March 1921 called by the Central Committee of the Party expelled those communists who opposed this reform from the Tsektran leadership and outlined new methods of work.

[9b] See Izvestia of the C.C., R.C.P. No. 26, p. 2, the Resolution of the September Plenum of the C.C., Paragraph 3, which said: “The C.C. further believes that there has been a great improvement in the grave situation in the transport workers’ unions, which produced Glavpolitput and Politvod, [10] as temporary levers for assisting and organising the work. Therefore, incorporation of these organisations in the union, as union agencies being adapted to and absorbed by the union apparatus, can and must now proceed.”

[10] Politvod —the Chief Political Administration of Water Transport of the People’s Commissariat for Communications—was set up inApril 1920 as an agency of Glavpolitput to carry on political education among the workers and exercise political control over the technical and administrative personnel; to put water transport on its feet as soon as possible; to stimulate higher productivity and improve discipline. It was dissolved in December 1920.

[11] The Party wanted the trade unions’ work reorganised in accordance with the tasks of peaceful socialist construction, democracy developed and military methods of administration abolished. This was opposed by Trotsky, who demanded, at the Communist group meeting on November 3, a “shake-up” of the trade unions. He wanted “the screws tightened” and the trade unions governmentalised immediately. He disagreed on the “approach to the mass, the way of winning it over, and keeping in touch with it”. His speech started the Party discussion on the trade unions, but the Communist delegates rejected his demands, for their realisation would have abolished the trade unions and undermined the dictatorship of the proletariat. That is why his theses were discussed by the Party Central Committee. At the November 8 C.C. Plenary Meeting, Lenin came out with his own theses which, when put to the vote, won 8 votes, as against 7 for Trotsky’s.

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Dunleavy lays out efforts to preserve ability to spend public funds at private and religious schools

Alaska Gov. Mike Dunleavy, left, and Attorney General Treg Taylor answered questions during a news conference in Anchorage on Wednesday. (Bill Roth / ADN)

In the wake of a court decision that struck down key statutes governing Alaska’s public homeschooling programs, Gov. Mike Dunleavy said Wednesday that he would not immediately seek to advance new statutes or regulations ensuring the programs can continue.

Anchorage Superior Court Judge Adolf Zeman ruled last week that the statutes, which allowed families to purchase education services from private or religious organizations, violated the Alaska Constitution, which states that “no money shall be paid from public funds for the direct benefit of any religious or other private educational institution.”

Lawmakers, educators and parents reacted with alarm to the Friday decision, which appeared at first glance to strike down Alaska’s correspondence programs in their entirety. The programs have been used in Alaska for decades.

The Anchorage School District paused processing any pending or yet-to-be submitted reimbursement requests after the court decision, according to a statement sent Wednesday to the families of correspondence students. The district is asking the judge to pause the implementation of the decision, which would allow allotment payments to resume for the remainder of the school year.

Sen. Bill Wielechowski, an Anchorage Democrat and attorney who has taken a lead on education issues in the Legislature this session as part of the Senate bipartisan majority, said Tuesday that the ruling’s implications were far more limited than he initially thought. He said his opinions have been supported by recent conversations with the Legislature’s attorneys.

To make the programs legal, the state would have to better track the use of the allotments that families receive — which vary from $2,700 to $4,500 per student — and ensure money is not going directly to religious and private schools, Wielechowski said.

Dunleavy, a Republican who has long supported using state dollars for private and religious schools, said Wednesday that he did not share Wielechowski’s interpretation of the decision.

The Dunleavy administration planned to appeal the decision to the state Supreme Court, and did not plan to draft regulations or propose legislation that would enable correspondence programs to carry on while cutting out spending at private and religious schools, Dunleavy said in an hour-long news conference in Anchorage.

[ Alaska parents and legislators scramble for answers after judge rules homeschool allotments are unconstitutional ]

Correspondence allotments have increasingly been used to pay for tuition at Alaska private schools, though the extent of the practice is not fully known. The conservative Alaska Policy Forum has since 2022 maintained a growing list of correspondence schools that allow for their allotments to be used toward private schools, including religious ones.

Attorney General Treg Taylor, a Republican appointed by Dunleavy in 2021, said at the Wednesday press conference that the ruling was so sweeping that — unless the state Supreme Court finds otherwise — it could make it illegal for public schools to spend any money on private vendors more generally, including private textbook companies.

“In light of the vague, broad nature of the court’s reasoning, it is very difficult to determine what type of program would actually be permitted under this decision,” Taylor said.

Alaska Attorney General Treg Taylor. (Bill Roth / ADN)

“In a way, drafting something legislative would just be a shot in the dark,” Taylor added.

The wife of Treg Taylor, Jodi Taylor, wrote in 2022 about her intent to use correspondence allotments to pay for her children’s education at a Catholic school. The attorney general previously recused himself from matters related to correspondence students, but on Wednesday said he planned to be involved in the state’s litigation moving forward.

Taylor said Wednesday that “the situation with (his) kids’ schooling has changed significantly” and that he had sought the advice of outside counsel, who determined he no longer had a conflict. Department of Law spokeswoman Patty Sullivan did not immediately provide additional details on the outside counsel’s opinion, including who provided it and when.

The state is planning to file a request for a stay on Monday, Taylor said. If granted, it would pause the implementation of the decision. The plaintiffs in the case — several Alaska parents and teachers — have already requested a temporary stay until the end of June, which they said would prevent disruptions in the current school year. But they indicated they would oppose a longer stay — which is what the state plans to request.

Taylor said the state would seek to halt the court order until the state Supreme Court could consider the case and issue its decision. Even on an expedited basis, that would likely take several months.

If the state Supreme Court upholds the superior court’s decision, Taylor and Dunleavy said they would seek to appeal the decision to the U.S. Supreme Court.

“If the state Supreme Court just strikes the ability to purchase material or coursework from religious vendors, there’s a very good chance that it’ll be taken to the U.S. Supreme Court to be challenged there by intervenors, by others that are watching this right now,” said Dunleavy.

In 2022, the U.S. Supreme Court struck down a Maine ban on sending public funds to religious schools. But that ban is very different from Alaska’s constitutional provision, which prohibits the use of public funds at all private schools, not just religious ones.

Wielechowski said there is “no chance” the U.S. Supreme Court will take up Alaska’s case.

“It’s a states’ rights issue,” said Wielechowski. “It would be shocking for the Supreme Court to basically force a state to say, ‘you have to allow public dollars to go to private institutions.’ That would be almost unheard of.”

‘An education dividend’

The statutes struck down in the ruling were enacted in 2014, a year after they were first proposed by Dunleavy, then a state senator.

Dunleavy acknowledged at the time that the state constitution prohibited the use of public funds at private schools and proposed a constitutional amendment that would remove the relevant provision. That amendment was never adopted by lawmakers. Legislative attorneys also warned lawmakers that the provisions could be unconstitutional.

Alaska Gov. Mike Dunleavy, left, and Attorney General Treg Taylor. (Bill Roth / ADN)

Dunleavy said that what he meant at the time was that the state constitution banned direct payments to private schools. However, he said he believed that the current use of allotments was allowed under the constitution because the funding flowed through public schools to parents, who then used it to pay private schools.

“We don’t think that’s a direct benefit. The plaintiffs want to make the case that it is,” said Dunleavy.

Still, Dunleavy said he would support “vouchers,” meaning the state’s ability to spend money directly at private schools, if they were allowed under the constitution. Dunleavy said he was considering putting forward a constitutional amendment — though it would not likely be proposed in the current legislative session, which will end in less than a month.

Wielechowski said he believes the administration is committed to advancing a constitutional amendment, rather than a regulatory fix, because “they want to allow public dollars to go to private and religious schools.”

Passage of a constitutional amendment requires support from two-thirds of the House and two-thirds of the Senate to place the question on the ballot before Alaska voters. It would then take a majority of voters supporting the amendment for it to be implemented. Lawmakers this week indicated that reaching those thresholds was unlikely this year.

Aside from a constitutional amendment, Dunleavy said he is considering advancing what he called an “education dividend,” which would allow parents of homeschooled children to spend public funds with even fewer guardrails than those that existed under the allotment program.

Such a program, Dunleavy said, could provide funding to families who would have otherwise received correspondence allotments, with no strings attached.

Dunleavy said his administration estimates that the state spends around $120 million per year on more than 20,000 correspondence students. Not all of that money is directed to allotments — in most cases, half the funds directed to correspondence students are used to cover the costs of school buildings, staff members, and administrators, among other expenses.

“We don’t ask people how they spend their PFD. For all we know we may have families using their thousands of dollars in their collective PFDs on their churches. We don’t ask what they do or how they spend their money. So we may be looking at an educational dividend,” said Dunleavy.

Dunleavy also said he would consider repurposing a fund currently used to provide university scholarships to instead pay out scholarships to grade-level students, which could be used more freely than allotments.

Prior to the enactment of the statues that Dunleavy had proposed, the state education department had put in place regulations governing correspondence schools, including limits on how allotments could be used and statewide reporting requirements.

“We shouldn’t be here and we don’t need to be here,” said Sen. Löki Tobin, D-Anchorage. “We could propagate emergency regulations today to stabilize the system. We could ensure that our families know and are able to predict what comes in August.”

Zeman, the judge, also said correspondence allotments could continue with the right legislative action.

“If the legislature believes these expenditures are necessary — then it is up to them to craft constitutional legislation to serve that purpose,” he wrote.

However, Dunleavy said that “statutory considerations won’t remedy the situation.”

Wielechowski said the governor’s unwillingness to advance legislation while an appeal is underway makes action in the final weeks of the current legislative session unlikely.

“If there’s no alignment between the executive and the Legislature, it makes it a challenge to pass legislation,” said Wielechowski. “My concern with that is it provides uncertainty to people who are homeschooling their kids.”

Iris Samuels

Iris Samuels is a reporter for the Anchorage Daily News focusing on state politics. She previously covered Montana for The AP and Report for America and wrote for the Kodiak Daily Mirror. Contact her at [email protected].

Sean Maguire

Sean Maguire is a politics and general assignment reporter for the Anchorage Daily News based in Juneau. He previously reported from Juneau for Alaska's News Source. Contact him at [email protected].