Welcome to today’s Morning Brief, looking at the EU’s gas search in Azerbaijan, the latest from Ukraine, Britain’s next prime minister, and the world this week.

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Just days after U.S. President Joe Biden’s fist bump with Saudi Crown Prince Mohammed bin Salman showed the lengths the world’s largest energy consumer will go to secure its supplies, European Union chief Ursula von der Leyen visits another authoritarian regime to help keep the bloc’s energy market afloat.

Von der Leyen visits Azerbaijan today, where she is expected to sign a gas deal to help cover European supplies as the EU seeks to wean itself off Russian gas.

With Russia focused on Ukraine, the European Union has become more engaged in mediation efforts between Armenia and Azerbaijan over the disputed Nagorno-Karabakh region. In May, Brussels hosted rare face-to-face talks between Armenian Prime Minister Nikol Pashinyan and Azerbaijani President Ilham Aliyev. The foreign ministers from the two countries held their first bilateral talks since 2020 just yesterday.

But as EU leaders seek to present a neutral position between the two countries, some Armenians fear a gas-fueled shift toward Azerbaijan, which could have an impact on Nagorno-Karabakh, over which Baku and Yerevan fought their most recent war in 2020.

Gabriel Gavin, writing in Foreign Policy in May, spoke with Artak Beglaryan, the state minister and de facto leader of the self-proclaimed Republic of Artsakh, Nagorno-Karabakh’s ethnic Armenian enclave within territory internationally recognized as Azerbaijan’s, who expressed concern over Europe’s growing dependence on Azerbaijan. “If democracy and human rights, as well as regional stability, matter to the West, there should be conditions set as part of gas negotiations with Azerbaijan,” Beglaryan said.

Today’s meeting is part of a European plan to diversify its energy imports and decrease reliance on Russian gas. That’s a tall order: Around 40 percent of EU gas imports came from Russia in 2021. So far, EU members have not set out to ban Russian gas entirely, but they have agreed to reduce dependence by two-thirds by the end of this year.

So how much can Baku make up? Russia’s gas deliveries to Europe amounted to 155 billion cubic meters (bcm) in 2021, but current EU plans call for Azerbaijan to supply only a fraction of that—just 11 bcm—by the end of this year.

Today’s agreement between EU and Azerbaijani officials plans to change that—but slowly. A draft deal between the two sides says they “aspire” to almost double imports of gas to 20 bcm by 2027 by relying on upgrades to the Southern Gas Corridor, an array of pipelines that moves gas from the Caspian Sea through Turkey and onward into Europe.

Europe’s gas hunt. Where Europe can find the rest of the gas it needs is a question that has taken EU leaders across oceans and in search of both traditional and unorthodox partners: Norway, Israel, the United States, Egypt, and Qatar have all been tapped as candidates to provide increased flows.

New markets are also being considered. German Chancellor Olaf Scholz went to Senegal in May to encourage its government to boost offshore gas production. Italy has recently made gas deals with Algeria, Angola, and the Republic of the Congo.

Heat warnings. Even though Scholz has tried to play down the renewed focus on fossil fuels as “temporary,” the increase in exploration comes at a perilous time.

The International Energy Agency has already sounded the alarm, warning that the world cannot afford any new fossil fuel projects if net-zero targets are to be met—a key consideration in keeping the planet below 1.5 degrees Celsius of warming. EU officials argue that gas is a better alternative to much dirtier coal, and that liquefied natural gas terminals can later be converted to hydrogen facilities, so the investment does not necessarily tie them to gas.

The reality of a warming planet is already apparent across the world: Dozens of Chinese cities operated under heat alerts this month, wildfires have raged across Southern Europe as well as the United States, and this week the United Kingdom is forecast to record its highest-ever temperature—over 100 degrees Fahrenheit.

Cutting demand. There’s one option Europe has yet to take that doesn’t involve politically fraught deals or investments in infrastructure—simply using less energy. The difference in energy use between a typical Westerner and people in the developing world is vast: An average European uses more than five times as much electricity as the average Indian, while the average American uses 10 times as much as an Indian consumer.

As part of its 10-point plan to reduce dependency on Russian gas, the International Energy Agency recommends reducing home thermostats by 1 degree Celsius, a reduction that would save 10 bcm in gas—or Azerbaijan’s current EU export volume.

Jason Bordoff and Meghan L. O’Sullivan, writing in Foreign Policy in June, argue that “the world has sadly lost sight of one of the most important energy facts: Efficiency investments and demand conservation are often the cheapest and quickest ways to cut the use of oil, gas, and coal—and to reduce the need for replacing Russian supplies (not to mention carbon emissions).”

Bordoff and O’Sullivan echo energy efficiency guru Amory Lovins’s call, made in 1973, for governments to choose the “soft path” of conservation, efficiency, and renewables rather than the “hard path” of mining, extraction, and more industrial construction. “If the best time to have followed the soft path would have been decades ago,” Bordoff and O’Sullivan write, “the second-best time is now.”

https://foreignpolicy.com/2022/07/18/azerbaijan-gas-eu-von-der-leyen/