Putin’s war can’t save fossil fuels

Your guide to the political forces shaping the energy transformation

Oct 27, 2022 View in browser   By Arianna Skibell Steam rises from cooling towers at a coal-fired power plant in Germany. | Sean Gallup/Getty Images Demand for fossil fuels is about to plateau despite a global energy shortage. That's according to a new report from the International Energy Agency, which found that current global clean-power policies are enough to halt fossil fuel growth worldwide, as POLITICO's E&E News reporter David Iaconangelo wrote in a story today. And that means that for the first time, the main cause of global warming is not expected to grow. Over the next few years, demand for coal will flatline, followed by demand for natural gas by 2030. By the mid-2030s, petroleum will reach its zenith after a century of growth, the report found. The findings by the Paris-based research and policy group, whose 31 members represent the majority of global energy demand, run counter to what some analysts presumed would be the legacy of Russia's war. When Russia invaded Ukraine earlier this year and set in motion a global energy crisis, many energy experts expected a fossil fuel renaissance. Russia's natural gas has long fueled the European economy, and without it, nations began powering up long-shuttered coal plants and contemplating expensive and enduring natural gas build-outs. President Joe Biden called for an increase in oil production to bring down high prices, and oil and gas producers began lining up to come to the world's rescue. But the IEA warns that any new fossil fuel projects "do not come for free in climate terms" and that the Russian invasion cannot "justify a wave of new oil and gas infrastructure in a world that wants to reach net zero [greenhouse gas] emissions by 2050." Such new projects face commercial risks — especially given IEA's prediction that fossil fuel demand will stop growing. In a conversation this morning, David broke down how the IEA reached its conclusions. "The U.S. and its major allies have enacted laws with lots of new policy support for clean energy," he said. "The IEA is saying that the policies are in place now, on a global level, to stop the growth of the fossil fuel business." Even so, the report also highlights that not enough investments are going toward clean energy to meet the goals of the Paris climate accords. The IEA says investments need to double through 2030 if the world is going to hit net-zero carbon pollution by 2050.   It's Thursday — thank you for tuning in to POLITICO's Power Switch. I'm your host,  Arianna Skibell.  Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to  askibell@eenews.net. Listen to today's POLITICO Energy podcast Today in POLITICO Energy's podcast: Declan Harty breaks down why moderate Senate Democrats are pushing SEC chair Gary Gensler to slow down on a climate disclosure rule. Power Centers Solar panels produced by Ameren Corp., an American power company based in Springfield, Ill. | Ameren Corporation Solar dilemma A study in Nature has found that meeting the Paris climate goals may require the United States to continue relying on Chinese-made solar supplies because domestic production is too expensive, writes David Iaconangelo . The finding flies in the face of Biden administration actions to boost domestic production of clean power as a way to combat climate change and create U.S. jobs at the same time. How to spend that climate $$ Implementing much of Biden's climate law will fall to the Treasury Department, which is writing the rules that will determine how $369 billion in clean energy tax credits are parceled out, writes Benjamin Storrow . The stakes are high. The department's guidance will effectively determine who gets paid and how. It's also the first step to unleashing what the Biden administration hopes will be a wave of clean-energy investment from the private sector. Putin's war The German government announced that the Russia-to-Germany pipeline Nord Stream 2, which was damaged by an explosion, can no longer be counted on to supply power to energy-strapped Europe, writes Wilhelmine Preussen . Western leaders have called the incident that caused massive pipeline leaks a deliberate act of "sabotage" intended to disrupt European energy infrastructure and supply. in other news British Prime Minister Rishi Sunak. | Kirsty Wigglesworth/AP Photo "Other pressing commitments": British Prime Minister Rishi Sunak has pulled out of the COP27 climate summit. Not nothing: The economic benefits of wind and solar power in rural Appalachia could top $65 billion.   NEW AND IMPROVED POLITICO APP: Stay up to speed with the newly updated POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. With a fresh look and improved features, the sleek and navigable design offers a convenient way to access POLITICO's scoops and groundbreaking reporting. Don't miss out on the app you can rely on for the news you need, reimagined. Already a POLITICO app user? Upgrade today! DOWNLOAD FOR iOS – DOWNLOAD FOR ANDROID .     Subscriber Zone A showcase of some of our best subscriber content. A frog sits in the water at the Wakodahatchee Wetlands in Palm Beach County, Fla. | Bruce Bennett/Getty Images The rate of heat injury and death doubles for cold-blooded animals for each degree of global warming. U.S. and European officials are meeting this week to discuss the global energy crisis and how to ease growing tensions around the United States' role as the leading gas supplier. Countries putting restrictions on the global minerals trade, like the U.S., are threatening the speed of the energy transition. That's it for today, folks! Thanks for reading.   DON'T MISS POLITICO'S 2nd ANNUAL DEFENSE SUMMIT ON 11/16: The United States is facing a defining moment in the future of its defense, national security and democratic ideals. The current conflicts and developments around the world are pushing Washington to reshape its defense strategy and how it cooperates with allies. Join POLITICO for our second annual defense summit, "At a Crossroads: America's Defense Strategy" on November 16 in person at the Schuyler DC or join online to hear keynote interviews and panels discussing the road ahead for America's national security. 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