Mamdouh salameh economist view

A week ago, Fatih Birol, the Head of the International Energy Agency (IEA), claimed that the energy squeeze in Europe has nothing to do with renewables. He went on to say EU governments needed to keep their eyes on reducing global warming, even when times are volatile, referring to the sky-high gas prices in Europe.

However, the IEA chief is completely wrong. The EU policies to accelerate energy transition at the expense of fossil fuels and the incessant pressure by environmental activists and divestment campaigners on the European oil and gas companies to divest of their oil and gas assets, have been the major underlying reasons behind Europe’ energy crisis. These two damaging factors have been adversely affecting production of oil and gas as well as investments without affecting the global demand for them, thus creating an oil supply deficit and skyrocketing oil prices.

Another reason is that . Even Spain, a staunch member of the EU, warned the EU Secretariat that its energy transition plans may not survive the test of sky-high electricity prices.

Everyone pushing for ditching fossil fuels should consider market realities before indulging in this fantasy.

With natural gas storage levels at a 10-year low just ahead of the winter heating season, . Governments across Europe have pledged to protect the most vulnerable consumers against soaring gas and electricity prices.

As a result of soaring gas prices, utilities in Europe and the rest of the world, particularly China, are using more coal and other fuels including crude oil to generate electricity at the expense of natural gas. Increased use of coal-fired power in the electricity mix is in direct conflict with the ambitions of the EU to reach net-zero emissions by 2050. There is a switch going on from gas-to-oil and coal-to-oil which is giving a huge upward push to oil prices.

The energy supply crunch and the prices’ spike showed once again that the EU and everyone pushing for ditching f

World Geostrategic Insights interview with Mamdouh G Salameh on the changes the Trump administration intends to make in U.S. energy and climate policy and its implications, both domestically and internationally. 

Dr. Mamdouh G Salameh  is an  International Oil Economist and a Global Energy Expert. He was a Visiting Professor of Energy Economics at the ESCP Europe Business School in London.

Q1 – How would you assess the energy policy and climate regulations of the Biden era? What impact has it had domestically and internationally? 

A1 –  I would assess them as haphazard and contradictory. On the one hand, the Biden administration was declaring to the world its adherence to the Paris Climate Change Treaty and its climate change goals and on the other, it was encouraging oil and gas production both for exports and also in order to play a bigger role in the global oil and LNG market.

In so doing it neither gained the support of the US oil and gas industry since it forbade any exploration in Federal lands nor did it convince the environmental lobby of its sincerity about climate change.

Domestically its impact was hardly noticeable. Internationally it had some impact on keeping oil prices relatively low by pumping into the global oil market 288 million barrels (mb) of oil it withdrew over four years from the US Strategic Petroleum Reserve (SPR) in order to depress oil prices for the benefit of its economy.

It is now finding it difficult to refill its SPR with only 25 mb or 8.7% of the 288 mb returned to the SPR.

Q2 –  President-elect Donald Trump  wants to make the United States not only “energy independent,” but also “energy dominant.” He has said he wants to roll back nearly all of the Biden administration’s regulations aimed at reducing carbon emissions and moving away from fossil fuels, and has promised to cut natural gas and electricity prices in half within a year, largely through increased natur