METHANE. Julian Popov Interview

Julian Popov, minister of environment of Bulgaria, is an expert on low carbon economy and energy security in South East Europe. He is ECF Fellow, Chairman BPIE, Energy Security Adviser to the Bulgarian President. Founding Vice Chancellor of the New Bulgarian University, Founding Board Member of the Institute of Sustainable Transition and Development, Former Chairman of the Bulgarian School of Politics.

We talked gas dependency and Ukraine war.

Raul Cazan

Transcript

SPEAKER_01 0:00

There is a very, very strong reluctance by um financial institutions and companies uh to invest in gas infrastructure. That's why they have this very strong pressure on governments and European Commission and all sorts of public funding to uh to fund the infrastructure because businesses will not fund it.

SPEAKER_00 0:31

You're listening to the fourth episode of the Two Celsius Podcast. I am Raul Kazan, and yet again we're talking about war and energy. Russia renounced that it would stop gas supplies to Bulgaria and Poland. Recently Finland was added to the group. Now, how big of a problem is that? Well, it depends very much on the Bulgarian, Polish and Finnish governments. All countries can survive without Russian gas for some time. They have also options for alternative gas supplies. The announcement is also an opportunity. Indeed, the Poles replied defiantly to Russia's move. Who cares? Russia is declaring an energy war on Europe. The right response is a decisive counter-attack. It would be very unwise if that counter-attack is only launched through LNG, that is liquefied gas. It will simply not work. In any case, the Russian announcement is a great opportunity again. And that opportunity lies in the acceleration of the EU Green Deal, that is the greening of the whole European economy. We invited today Julian Popov. He is the ex-minister of environment of Bulgaria. He is an expert on low carbon economy and energy security in Southeast Europe, and is a European Climate Foundation Fellow, Chairman of BPIE, dealing with green buildings, energy security advisor to the Bulgarian President. He's a founding vice-chancellor of the new Bulgarian University, founding board member of the Institute of Sustainable Transition, and former chairman of the Bulgarian School of Politics. Well, this is just to name a few. For me, or for us, at 2 Celsius, he is just a good old friend. Dear Julian, it is a pleasure to have you with us today.

SPEAKER_01 2:35

Thank you. It's very good to be with you.

SPEAKER_00 3:17

That's funny. I still have the notes from that time here. It happened at the Rubens, check it out, the palace in London. After that meeting, basically, I decided that 2 Celsius is going to be founded in somewhere. And in a month, I left the Europe and I went to Washington, DC. And that's where uh 2 Celsius basically started. As a at the time it was a network of uh journalists that were supposed to cover climate in Central and Eastern Europe, and it worked like that for a couple of years, uh, not brilliantly, but then as it was natural, I would say, we switched to advocacy and even policy research. So thank you for that. It was uh one of the greatest meetings of my life with one of my favorite authors, and later in the interview, I will sh quote Anthony Giddens from 2008 and see how things are developing now. Yeah, but he fits into the present brilliantly. But I I excuse me, I should I should start with him right now because it's uh it's uh it's it's it's very yes, it was a great meeting, it was a wonderful gathering, and um sorry I remember it well as well. Yeah, basically there were um journalists from Central and Eastern Europe.

SPEAKER_01 4:52

Um it was mainly um editors, editors in chief of um uh central and east European uh uh media, and that that was around uh the Copenhagen meeting uh COP 15, which uh uh I think that was the the the climate conference that pushed very, very seriously the climate agenda publicly, and many people were disappointed then because uh it just didn't do it overnight. I wasn't disappointed because it made uh massive waves and started much much wider discussions on climate change than we had before. So that was the time.

SPEAKER_00 5:49

I remember climate wasn't covered. I at least in I remember the guys from Poland and us from Romania, we were too, I think. We didn't cover climate at I mean, I was covering because I was working for an environmental magazine at the time, but in the mainstream media, climate was utterly inexistent, it was zero coverage once uh it insane times, and it was 2009, so it was a couple of months before the Copenhagen flop.

SPEAKER_01 6:17

Yes, exactly.

SPEAKER_00 6:18

Yeah, so I'm I'm quoting from that. Um I'm quoting Anthony Giddens. Just just listen to it, it's gonna take 10 seconds only. He says, it has been estimated that the volume of gas fled off in the country each year is equivalent to a quarter of total Russian gas exports to Europe. Leaky pipelines and substantially add substantially to this total. In the meantime, Russia won such a liberal deal at the at Kyoto that there is no motivation to control emissions whatsoever. Recent Russian commitments to reduce leakages should receive international support and encouragement, uh, as should moves to raise energy prices for consumers, although neither is motivated by climate change considerations. On the back of high oil prices, Russia adopted a forceful stance, a violent stance in international relations.

SPEAKER_01 7:16

Yeah, it's a it's a it's a good quote, and uh he always is um thinks well in the in depth and in the future, and of course, now Russia is very much in the center of uh our uh daily discussions, hourly discussions, uh, because of the brutal invasion of Ukraine, uh, but also the impact of uh energy security and uh gas supply security, and um it it shakes the the whole uh debate and narrative around energy.

SPEAKER_00 7:59

So that's that's right. Uh but let us get get back to to the present. And um the present meaning two weeks ago when Russia announced that it would stop uh gas supplies to Bulgaria and Poland, and the what we want to speak right here is how big of a problem is that? Because obviously it depends very much on the Bulgarian and Polish governments. Uh, both countries are able to survive without Russian gas for some time, right?

SPEAKER_01 8:36

So yes, I mean uh from media point of view, it was complete disaster, the end of the world. From a reality point of view, it wasn't a problem. It was, I wrote even an article which was titled Russia Stopped the Gas to Bulgaria, Foo Stop Finally. So it was uh uh from my point of view, it was a welcome move because we needed um a shock, and uh, in order to rethink our energy dependency and our gas pri uh gas policy. Uh both Poland and Bulgaria are not very highly dependent on gas in the overall energy mix. And this is in Bulgaria very often that's uh seriously misunderstood because most of the gas until recently it was effectively 100% of the gas was arriving from Russia, and very often, even prominent politicians in Bulgaria and internationally would say Bulgaria is uh 100% dependent on Russian energy, which is just not true. Bulgaria has uh a dependency of uh about 10-12 percent of on gas. Uh, so yes, that gas traditionally comes from Russia, but uh because Bulgaria is also a gas uh transit country, it has sufficient infrastructure with a little bit of tweaking to receive gas from different directions. So uh this is what happened, and uh it doesn't seem, I mean, so far there hasn't been a problem both with supplies and with price. I mean, there have been a lot of speculation and a lot of uh political uh confrontations and explanation how the Russian gas is cheaper, the American gas is more expensive. On the other side, you hear the Russian gas is expensive, the American gas is cheaper, but the reality is that there is no dramatic uh supply issue. And also that uh kind of pushes the sector, the energy sector, to think in two directions. One is uh general diversification of um energy uh supply, and the other is the role of gas, and I'm glad to see that the the role of gas now is uh under serious debate because uh gas has been seen by many as a reliable baseload um energy and also as uh transitional fuel between coal and uh solar. And uh, I personally don't think that it's either a transitional fuel, I mean it's definitely not a transitional fuel, and and it's not a reliable base load energy, but uh, we needed this shock to start realizing these facts.

SPEAKER_00 11:52

Um there's a favorite author of mine. Um he basically says that um at this point we have all technologies at cheap prices, uh, so the only thing we need is the economies of scale to boost uh solar and wind. Uh so far, uh I would say that we were just showing our or say exemplifying green solutions that uh cover for a very small percentage uh in the energy mix. Uh, as our response to weaning ourselves off uh dirty Russian hydrocarbons is lying merely in replacing gas sources and alas, uh, we're investing in brand new gas infrastructures, which is the case of Romania, that will bridge to uh carbon zero emissions in the far-sighted future. I mean, we are fooling ourselves. Those investments will scream out for returns on the long term, and that is 30 years, right?

SPEAKER_01 13:00

Yes, I mean uh we have several problems with new uh gas infrastructure. Uh and I would start with the the problem and with the argument that actually pushes the the uh new gas infrastructure, and this is that because we are moving out of Russian gas, we need uh new infrastructure to replace this gas with uh non-Russian gas. And the thing is, it's it doesn't work like that. I mean, gas infrastructure takes a long time to build, long time to repay. Uh, it's not just the actual physical building, but there are lots of uh permits, uh technologies, uh political disagreements, and so on and so on. When uh recently somebody was telling me, well, um the uh uh a floating terminal you can build in two years, and uh we were discussing the Alexandropolis floating terminal, and then he said, and we've been discussing that for six years, and I said, Well, then that makes eight years.

SPEAKER_00 14:08

I couldn't find anyone matching spot who has granted you drop-in permissions. I can drop in on your own echo devices.

SPEAKER_01 14:16

Apologies, that's my idiotic and say Alexa, drop in. Alexa Alexa, shut up. I have this Alexa, which suddenly hearing my voice and God knows what I said, recognizing my word that it freaks me out.

SPEAKER_00 14:36

I will never have such a thing. I'm I'm having finals.

SPEAKER_01 14:40

It does it very it does it very rarely, and I don't know what to do because I hate this kind of thing. I bought it just for the microphone for the loudspeakers, but um uh anyway, you you can delete it. Uh but um so I mean basically to build um uh an LNG terminal takes a lot of time to build uh LNG import terminal, export terminal, and we have to factor in not just the physical building, because this is not uh, I mean, even if you call somebody to I don't know, repair your roof, you don't say the roof can be repaired in one day, you calculate how long it will take by the time this person comes and to find the money, to sign the contract and all that. So uh building even the fastest uh gas infrastructure takes a lot of time. Then this infrastructure is not just the entry point, but you need pipelines, you need all sorts of things. And by the time uh new infrastructure is built to supply non-Russian gas, the energy landscape will be completely different, and most of this infrastructure will end up a stranded asset. So uh, because of that, it is very sensible for public funding not to go there. And if a private company wants to take the risk on that, let them take the risk, but they don't. I mean, the fact is that nobody wants to invest in uh specifically in Europe, and the other reason is that it is very clear to all investors that Europe is dead serious about its climate uh um ambitions. And uh while many uh companies were dismissing the climate policies of uh Europe, they learned a very hard lesson when they invested in um in coal, for instance, and suddenly coal started going down. And the same thing we're seeing now with gas. I mean, it's not that obvious, like with coal, but we're seeing on the investment side that there is a uh very, very strong reluctance by um financial institutions and companies uh to invest in gas infrastructure. That's why they have this very strong pressure on governments and European Commission and all sorts of public funding to uh to fund the infrastructure, because businesses will not fund it. They will not invest in that, and that's why these two concepts of hydrogen-ready infrastructure and transitional fuel were invented in order to justify uh gas infrastructure, which otherwise you can't justify simply from business point of view can't justify it, and from public point of view, you can't justify it, and that's why this sort of um uh I would say fake concepts um are uh being pushed so hard, and together with them the idea that needs base load um capacity, and the only option for base load capacity is um is gas as a replacement of coal, but base load transitional fuel and hydrogen already are three dead ends and and fake concepts. So that's where we are on on this subject, I think.

SPEAKER_00 18:34

And how would you see the uh civil society countering all this? Um because we are doing it from the outer perspective of what can what concerns us the most emissions and methane emissions are what are the are enormous altogether, you know, and are not being considered properly at this point. I'm referring to leakages, to flaring, to uh well, just to name a few.

SPEAKER_01 19:04

I mean, it's enough to I mean in principle, civil society is um in a very, very difficult position to fight against massive projects when these projects are justified with security reasons, and also when they are justified with uh highly technical arguments, uh, because technical arguments sometimes are not well understood by civil society organizations, but and and that makes it difficult to argue, but also they are not very well understood by the general public, so you can't capture the hearts and minds of people by talking about methane emissions. Everything's leaking in Russia, so methane emissions are leaking too, so fine. Uh so it's it's very difficult to explain that, but um I think engagement with uh with businesses, with um uh investors, and finding the uh investment logic and promoting the investment logic together with businesses uh is probably the the right way because we now we have in addition to the uh security of supply case uh for uh the discussion, we have also the I mean the climate case, the security of supply, the clean air, uh the decentralization of energy, democratization of energy. All these arguments together uh support a different approach to uh to energy. So um I I'd say entering this debate in a much more complex way is probably the right way.

SPEAKER_00 21:07

Uh I'm I'm enjoying a book right now. I just I just got it. It's uh Ian Bremer's uh The Power of Crisis. And he's basically he's basically saying what you're saying in your article that uh the huge opportunity lies in the crisis. However, he sees these three crises, right? The the trio of the looming crisis, uh global health emergencies with COVID and probably more terrible viruses, then the transformative climate change, as he calls it, uh, and finally the uh revolution of the artificial intelligence or the digitized uh revolution. And what we see right now, uh so what we were able to see at European or global level was the fact that uh energy. Is changing even from the perspective of uh digitization. Energy is getting smarter. Uh, there are smart solutions. You just mentioned, for example, energy communities or um democratization of energy, communitarianization of energy. So these are uh uh concepts that come from say political science, and uh they pave the way towards uh uh a smarter energy altogether and cheaper energy and obviously, obviously cleaner. And this was happening in the last uh say 20 years, so two decades, time in which period in which uh, as uh Anthony Giddens mentioned, Russia didn't do anything related to that, they were scorching the earth of their massive country to get more and more uh hydrocarbons and sell them at different prices, much cheaper in China and much more expensive in Europe. And that was pretty much it. And when um even if I kind of dislike it, but when the Americans become uh uh super import super exporters of uh of hydrocarbons themselves, uh having smarter technologies to do that, and uh I I might I must give them that, uh Russia became utterly violent. Suddenly they became international bullies. So Iran did the same. So basically, they uh they started to wiggle their arms and and and show their military strength and might because uh what I see is that the future doesn't belong to them, it didn't belong to them anyway. You know, they they were in a deep, deep uh crisis, uh especially related to energy. And this is the very core of their uh economic existence, isn't it? Would you like to comment on that as well?

SPEAKER_01 24:05

Their role in in geopolitics, it's uh very important, very interesting actually, to um to follow exactly this the relation between changing of technologies and energy and uh behavior of autocratic regimes, because very often autocratic regimes depend on some uh single uh um industry or commodity or um, let's say energy or minerals or something else, and now uh things are changing very much because of technologies and because of uh connectivity, uh, but also because of a very wide variety of energy sources, and that takes away exactly this uh uh power and this might of uh some dictators that um have control over um certain natural resources. Not that these natural resources um don't matter anymore, but because of the very high complexity of the energy sector and the industry, because it's not just we're replacing coal and gas with solar and wind. I mean, that's a very simplified uh picture. We're replacing one uh fairly uh centralized model of energy uh supply with um a very complex one, which includes not just solar and wind, it includes all sorts of digital solutions, which are hundreds and hundreds, and they have massive impact on the way we use energy, any energy. Uh, we we have a almost revolution in energy efficiency, energy use optimization, um, networks of energy. Uh, then um we we have a the the the the whole uh again the micro-revolution in the in the big revolution of energy storage and it's not just batteries, it's all sorts of different storage technologies that are coming in. Uh then the whole transport sector is transforming uh very, very fast. And in fact, the whole in the last 10 years, the whole energy economy has changed. I mean, everything that was expensive in the past now is cheap, and everything that's that was cheap is now expensive. I mean, coal is expensive, nuclear is expensive, and solar and wind and batteries, which were very expensive before, now are cheap. Then everything that was centralized is now turning into decentralized networks, and many things that were completely decentralized. So, for example, when you want to switch on or off uh your lights or heating, that was a very personal decision before. Now that is moving in the realm of sort of coordinated artificial intelligence or whatever you want to call it, uh, systems. So there is a complete transformation of the energy economy. And many people and many politicians, and especially dictators who rely on the kind of the centralized mindset, are uh um massively confused and uh full of resentment about this transition. And I'm not saying that Putin attacked Ukraine because of uh um the energy transformation, but uh it's one of the many factors that kind of fuel the the madness of um of his behavior.

SPEAKER_00 28:10

True. Uh also we Europeans paying for his energy, Putin's energy, I mean, uh fuels the actual war power of Russia.

SPEAKER_01 28:24

This is this is the yes, of course, but also it is very clear, like I mean, on a on a small scale the cutting of the gas of Finland, Poland, and Bulgaria, but um, but we see that uh this dependency is uh avoidable, solvable. So it's um uh so that that's that could be from Russian point of view, could be seen as another threat to Russia, uh, but from European point of view should be seen as a as a great opportunity to uh cut once and forever uh this type of dependence, not just on Russia, but on anybody for a uh commodity which is vital for the economy and society.

SPEAKER_00 29:16

Right. I I see Julian in your article in Politico that you have uh a lot high expectations actually uh about the task force between US and EU uh in terms of uh cooperation. So you you expect from it to cooperate in research, research and development, uh in renewables, technology, in hydrogen, and of course uh acceleration of the flow of capital. Uh why isn't it only about gas, and that's it?

SPEAKER_01 29:55

Well, um I mean it's partly expectations, partly appeal that uh the transatlantic cooperation should uh should move to a higher gear, and it's very important not just for the advance of technologies, but now we see that uh uh we have a major security uh threat to Europe and to democratic and liberal uh order, which is uh vitally important to uh protect. And uh cooperation between EU and US is a reality, um, but it it has much more potential. And uh politics and politicians um they they shouldn't interfere too much, but as much as they interfere and support uh international um business and research relations, the area of energy and all technologies related to energy, both production, transmission, and demand, uh, should be a subject of a much more closer cooperation between uh US and European uh companies and institutions, including defense institutions. I mean, we spend a lot of money on defense. We see uh now from the war in Ukraine that uh the the war, the modern war is sort of different from what we were uh thinking of, and what military analysts were thinking. Um, that technologies uh are having a major uh role and sometimes unexpected role, including this decentralization of technology through, I don't know, off-the-shelf drones, uh mobile apps, and so on. And this is also very similar in the energy world. So uh these trends needs to be captured and accelerated between um US and EU institutions and uh develop together because the values are common, uh, the objectives are common, so the work of the task force also has to move in that direction. And if I have uh some recommendation to this task force to rethink a little bit the the role and the extent to which uh LNG, the liquefied gas, can um can solve the issue with uh Russian supplies. Uh, in my view, this is quite limited, and not to rely so much on that kind of section and to expand much more uh its work in the renewable energy, energy efficiency, digitalization, energy security, um, research and development, uh hydrogen batteries. I mean, these are the technologies that uh still, I mean, solar doesn't need any uh government support except the simplification of permitting procedures.

SPEAKER_00 33:33

Oh yes.

SPEAKER_01 33:33

Uh but um hydrogen batteries, some other technologies uh still need uh government support. They are very close to their commercialization, uh, but uh still joint work in uh research, innovation, applications would be um the direction to go for this task force and the EU US uh joint um uh cooperation.

SPEAKER_00 34:04

And uh finally, do you see uh good opportunities for Central and Eastern Europe as well in this uh context?

SPEAKER_01 34:15

The opportunity is huge. The problem is that uh we uh we, I mean all of us, east and west and us and so on, has a um sort of a cliche view of uh Eastern Europe and Central and Eastern Europe that it's uh less advanced, it's poorer, it's uh and also it's more dependent on uh old technologies, and because of that, it has to move kind of slower or behind the the rest. And I think this is very, very wrong, because we we can leapfrog in a way a number of uh technologies. So, for example, in some countries like Bulgaria, like uh most countries in domestic gasification, uh, instead of moving into domestic gasification and then remove domestic gasification, we can just skip that. We can leapfrog these technologies. Then uh Central and Eastern Europe has a high um engineering capacity, which could be combined with a relatively lower um labor cost and attracts a lot of industries that are now outsourced to Asia, for instance, so they can be brought in uh and Central and East European countries have a certain advantage. Uh, the other thing that Central and East European countries have is depending on the specific country, have uh massive renewable potential. So um lignite regions have uh enormous solar potential, for instance, uh, and very cheap solar potential because of the consolidated land, the very good grid, and all the other opportunities to develop rapidly industrial solar. Developing rapidly industrial solar means you can develop uh also um hydrogen production, and hydrogen production can uh uh attract the uh industries that are working on their decarbonization. So there is a there is a whole business and industrial model that can be promoted in Central and East European countries uh with much more confidence and ambition, and we must work on that because if we don't, then the gap between the east and west will widen as a result of much, much faster technological advance in the uh in the West and somehow slower uh advance in the east because of these prejudices and sometimes resentment and sometimes capture states and corruption, uh, but uh but generally this expectation that things there are moving more slowly than that they should. There is no need to have that.

SPEAKER_00 37:37

That's uh it's a it's a great line to finish. And uh thank you so much. I hope I'll hear you again, and I hope you're gonna organize another meeting with uh Anthony Giddens.

SPEAKER_01 37:51

Well, we certainly can organize something, and uh it will be it will be great to talk again and to to see you, and so we we will organize something. I I will now you're in Brussels, it's it's quite easy to um I mean I haven't been in Brussels for a very long time. I I used to come to Brussels at least once a month because I mean it's two hours train journey, yeah, very expensive one.

SPEAKER_00 38:20

Recently it got so expensive that it's ridiculous. I mean, all our uh uh advocacy for trains is just uh it's just falling down because the retail prices are insane.

SPEAKER_01 38:32

Um, yes, I mean these are sort of jumps, ups and downs of prices and economy after COVID, which confused many politicians and made made the most sort of devise this uh recovery plan, which I think is uh seriously wrong because um I mean the recovery happened uh before the money for the recovery started being spent. So now we have to spend money for the recovery after the recovery. So we we have to rethink what to spend them for. So uh it's a bit of a lottery syndrome, which oh really? That's a that's a tough thing to say because apparently they're investing them in in say clean transport infrastructure, and uh yes, but uh but it's one thing to invest because uh you say I want uh clean transport infrastructure, and and that's why I'm looking for money, and then somebody, the European Commission or public or or banks, whatever, to say, yes, that's a good project, and we have money for that. It's a different dynamic when somebody comes and says, I have 10 billion, and you have to tell me in three months out you will spend them, and and and it has to be about clean things, and then you start running around, and and whoever is ready with the projects, and then some of the projects are sensible because they're clean transportation, energy efficiency, and so on, but uh it's the the the financial logic and direction is exactly the opposite of what it should be.

SPEAKER_00 40:17

True, true, true.

SPEAKER_01 40:18

I I was following the Romanian, uh the Romanian debate about that, and it was so funny because obviously Romania wants to invest in motorways, you know, it was so ridiculous, you know, to cast the again, and and by the way, the investment of motor in motorways, this is another major issue that okay, certain motorways need to be built, but they have to be built sort of with uh for the future, so they have to be fully supplied with uh electricity, uh with uh charging stations, with everything that uh serves the electrification of um of transport. Uh, I don't know, uh I think the jury is still out on on hydrogen in heavy transport, but yeah uh that this could be we have to think about building green corridors rather than just motorways to fill them with more uh internal combustion engine cars. That's right. And and that is that is the problem that we we don't think about what is the infrastructure of the future, and because these are investments for decades ahead. I mean, once you build it, it's there and you can suddenly change it. Then this balance between um railways and um and motorways, and then the directions, the capacity, and and now with this available money, just whoever is ready or closer to government or has some connections or is more charming or something else gets the money, but not necessarily the the in the right way.

SPEAKER_00 42:14

Yeah, uh I I as a as an activist, I was uh I was appalled to see that my country, Romania, gets money for for motorways, you know.

SPEAKER_01 42:24

By the way, they were greening them by planting poplars on the side, and that was well they they look green in the summer, so exactly. So it it turned out to be a color wise, and it's good, but it's it's uh very important, and and this this deserves a separate discussion. That's okay if you're you're going to build it, but is it prepared for future transport?

SPEAKER_00 42:51

Right. Well, transport is definitely an issue for uh uh future uh meeting right now. Uh again, uh let me thank you, and uh I hope I see you soon, Julian.

SPEAKER_01 43:04

It was it was uh great catch up, and um yes, we should uh next next time we should uh meet sooner rather than later. Okay, and good luck with two C.

SPEAKER_00 43:18

Thank you.