Tag Archives: EU

Possible Evolution of the Oil Industry – 12/2/16

Companies in the oil industry are weighing their options as pessimism about traditional business models grows.

In the short-term, the collapse of crude oil prices has led to massive cuts in exploration budgets needed to find new fields. Some believe prices could rise one more time because investment in finding new supplies is so weak, but many firms like Goldman Sachs and Wood Mackenzie expect prices to stay between $50 and $60 a barrel — a level where few fields are profitable — in the short-term.

The U.S. Energy Information Administration (EIA) projects that a recovery in non-OPEC production, primarily from U.S. shale drillers in mid- to late-2017, will offset OPEC actions and limit price increases throughout the year.


At low prices producers invest in the lowest cost per barrel sources like the Middle East, America’s Permian basin, Brazil’s pre-salt fields, and not much else. But even a boom for those areas could be short-lived if demand continues to decline in the long-term due to stricter fuel efficiency standards or widespread adoption of electric cars.

Concerns about reaching peak oil demand in the near future are rising as well. The IEA has projected that European consumption will fall from 11.7 million b/d to 10.8 million b/d between 2015 and 2020. Most, if not all, major oil players are prepping for the shift in demand. Shell finance chief Simon Henry has said the company sees oil demand peaking in 5 to 15 years. In China, China National Petroleum Corp. issued a report over the summer predicting oil consumption will begin to fall by 2030, if not sooner.

Others, though doubting peak demand will come quickly, are still preparing for it.

European oil companies are already shifting investment to sectors like petrochemicals or clean power that have better growth prospects. French oil supermajor Total SA has said it wants 20% of its portfolio to consist of low-carbon businesses before 2040.

Saudi Arabia, the world’s largest exporter of oil, is diversifying away from oil by investing in petrochemical plants and publicly listing state oil company Aramco, to raise money for other industries.

Meanwhile, Exxon and others are pouring money into natural gas as Chinese energy giants are aggressively embracing natural gas as a fuel for power generation and transportation.

For the companies supporting the oil industry there will be plenty of work decommissioning aging and unprofitable rigs at first. Next would come projects like Statoil, the Norwegian state oil company, and its floating wind farm where they could leverage experience with offshore oil rigs. Statoil also operates two carbon capture and storage (CCS) projects, technology which many fossil fuel companies support as a solution to emissions.

IEA Takes New Tact on Renewables – 11/4/16

The International Energy Agency (IEA) reported that in 2015, for the first time, renewable energy passed coal as the world’s biggest source of new power-generating capacity.

The IEA, established as a watchdog of the industry in the wake of the 1973 oil crisis, found that renewable energy generating capacity is increasing faster than it projected. Based on existing policies, the IEA updated its forecasts to show 825GW of new renewable capacity will be added globally from 2015-21, 13% more than it projected just last year.

Although the IEA’s stated goal is to provide impartial advice, it’s been criticized for publishing overly conservative estimates that have failed to predict the growth of wind and solar power. Bloomberg New Energy Finance provides graphs as shown below to illustrate the IEA’s previous underestimations of solar and wind power growth.



According to a spokesman for the industry, this year’s forecasts seek to reflect the growing number of countries adopting climate change policies, as well as the global deal to curb carbon emissions and global warming agreed in Paris Climate Agreement.

The IEA expects the share of renewables in total power generation to rise to 28% from 21%. The rise would be driven by government policies to curb global warming and reduce air pollution, as well as falling prices of solar panels and wind turbines. The IEA expects the United States to pass the EU and become the second-biggest market for renewables after China in the next few years, thanks to an extension of federal tax credits to wind and solar producers.

Because electricity demand in rich countries is falling, more renewable power are expected to drive other sources of electricity out of the market. As shown below in a chart from Economist.com, electricity-generation growth from renewables is expected to displace that from conventional sources. In the U.S. or the EU, conventional sources would mean fossil fuels while for Japan it would refer primarily to nuclear power.


Shale Gas News and Future Expectations – 8/29/16

In the U.S. Energy Information Administration’s International Energy Outlook 2016 (IEO2016) and Annual Energy Outlook 2016 (AEO2016), shale gas is expected to account for 30% of world natural gas production by 2040.

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Natural gas production from shale gas plays accounted for 50% of total U.S. natural gas production in 2015 and it is expected to increase all the way through 2040, according to the EIA, before accounting for 70% of total U.S. natural gas production by 2040.

Shale gas is expected to continuing growing as a percentage of world natural gas production as well.

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Shale gas production is projected to account for almost 30% of Canada’s total natural gas production by 2040, more than 40% of China’s, almost 75% of Argentina’s, 33% of Algeria’s, and more than 75% of Mexico’s.

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Politics may prompt faster adoption of natural gas as a replacement for coal.

In the EU, the European parliament is already taking steps to enable faster carbon reductions in Europe’s emissions market. A environment committee panel is scheduled to vote on Dec. 8 on a package of legislation that could, among other things such as restructuring overlapping policies and allowances, mean a cut in emission permits. Should such a cut occur, natural gas is the cheapest “clean” alternative to the coal that currently powers much of Europe as it gives off roughly half the emissions per unit of power produced.

Meanwhile, the stance the U.S. government takes on carbon emissions and, by extension, coal.

The two presidential candidates have energy policies on opposite ends of the spectrum of climate change argument. On one hand, the Democratic nominee would continue the Obama administration’s current policies including the Clean Power Plan that would have the EPA limit carbon emissions from power plants. On the other hand, the Republican nominee would attempt to end those policies. The latter scenario would certainly be less harsh for coal companies. That said, natural gas usage would certainly increase under both, just much more so under the Democrat than the Republican.

Siemens and Gamesa Combine Turbine Manufacturing – 6/22/16

In wind energy news, Siemens AG and Gamesa Corp. Tecnologica SA agreed to combine their wind-turbine manufacturing businesses.

The agreement comes at a time when worldwide installations are booming, but margins for making turbines are narrowing on increased competition. Xinjiang Goldwind Science & Technology Co. of China took the largest market share in manufacturing of wind power related machinery last year.

After Goldwind took the place as top supplier by market share last year after beating out Vestas and GE, the global rankings of suppliers were already shown to be fluid. Now Siemens and Gamesa, each having 5.3% of total installations last year will have a combined 10.6% share. At just that share, the new entity would only be surpassed by Goldwind and Vestas. Time will tell if the whole does better or worse than its parts.

Synergy was a large part of the argument for the deal. The two firms identified cost savings of 230 million euros expected within four years of the deal and hold most of their installations in different parts of the market.

Siemens and Gamesa have 69 GW of turbines installed worldwide, a measure that is typically used to estimate the revenue they may get from servicing machines. Vestas currently claims to have 75 GW of installed turbines.

“The combination of our wind business with Gamesa follows a clear and compelling industrial logic in an attractive growth industry, in which scale is a key to making renewable energy more cost-effective,” Siemens Chief Executive Officer Joe Kaeser said in a statement.

“As a leading wind power player especially in emerging markets, Gamesa is a perfect partner for us,” said Lisa Davis, member of the managing board of Siemens. “Teaming up will enable Siemens and Gamesa to offer a much broader range of products. The move will put Siemens and Gamesa in the best position to shape the industry for lower cost of renewable energy to the consumers.”

Merkel’s Push for Renewable Energy – 6/9/16

In a milestone for renewable energy, clean power supplied almost all of Germany’s power demand for the first time. The event marks a victory for Chancellor Angela Merkel’s “Energiewende” policy aimed at boosting renewables while phasing out nuclear and fossil fuels. Yet, there are still many issues to be resolved when it comes to making renewable energy Germany’s primary source of electricity.

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Renewables were only able to meet demand because of Germany’s strong export capability, said Monne Depraetere, an analyst for Bloomberg New Energy Finance.

“Events like this highlight that eventually we may need to start curtailing because of market-wide oversupply,” said the analyst. “In the long-run, that may provide a case to build technologies that can manage this oversupply — for example more interconnectors or energy storage.”

Germany already wastes a small portion of its wind energy even though, by law, renewable sources have priority access to the grid over traditional sources like coal.

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Renewable electricity generation in Germany represented 31% of the country’s gross electricity generation in 2015, an increase of 19% from 2014. Germany has tripled its electricity generated from renewable sources in the past 10 years.

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If Energiewende goals are met, the share of power generated from renewable sources is set to increase to about 40% by 2025 and to more than 80% by 2050. In addition to phasing out fossil fuel and nuclear power generation, Energiewende goals include reducing energy import dependence and lowering carbon emissions.

Costs associated with Germany’s shift to clean energy are being passed on, at least partly, to consumers. The German government policy of supporting renewable electricity growth by guaranteeing a fixed, above-market price for solar and wind energy is likely culpable in rising electricity rates. Along with Denmark, Germany has among the highest residential electricity prices in Europe.

As a net electricity exporter, Germany’s rapid growth in electricity production has created problems domestically and for its neighbors. The variability of clean energy flows puts pressure on local grids as they struggle to keep up increasing renewable energy supplies. Lacking the infrastructure needed to distribute or store all electricity produced domestically, German power flows to nations such as Poland, often creating power surges. Infrastructure proposals for new transmission lines that would help transfer the electricity from producers in the North to populous Southern cities have been met with resistance from municipalities and citizens.

Grid problems in Germany reflect a larger problem for renewable energy. As clean power takes a larger share of the nation’s energy mix, Germany has made several changes to its energy policies already to control costs such as the implementation of auctions and the decreasing of feed-in tariff incentives in years following years when clean power targets are exceeded. Germany should serve an example to other nations looking to grow their renewable energy industries.

Wind Rises, Carbon Falls – 6/8/16

Investors are beginning to talk with their feet as they shift money from fossil fuels to renewables. As wind rises on a tide of money from European investors looking to take advantage of the change, carbon falls under the weight of increased competition and regulatory risks.

The GWEC recently launched its Global Wind Report: Annual Market Update. The report shows the wind power industry set new records across the world last year in capacity installation as wind power installations broke through the 50 GW barrier for the first time in a single year in 2014 and annual installations topped 63 GW in 2015.

At the start of 2016, there was near 433 GW of wind power installations around the globe, a 17% increase over last year, according to the International Energy Agency. China alone added 30 GW in 2015 and now has more than 146 GW installed. China’s new Five Year Plan covering the period from 2016-2020 has increased the 2020 target for wind to 250 GW likely due to air pollution and energy security concerns.

European installations were led by Germany’s 6 GW of installations, more than 2 GW of which came from offshore wind. In non-China Asia, India became the nation with the fourth highest amount of cumulative installations as it surpassed Spain in global rankings.

U.S. states in the Plains region have had lower prices for wind power than most for a while now, but an uncertain regulatory environment has hampered the development of the U.S. market. The catalyst for the rise in U.S. investment in wind came from the unexpected extension of tax credits for wind and solar projects in late 2015.

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In contrast to the boom wind is experiencing, fossil fuel assets are being eyed with suspicion by U.S. insurers who see many energy-related investments at risk of becoming stranded assets due to climate change concerns.

European fossil-fuel companies in particular are seeing their value decline as countries shift their focus to renewable energy. Sovereign wealth funds and European insurers including France’s Axa SA and Germany’s Allianz SE committed to exiting some coal-related holdings as global leaders commit to fighting climate change.

In the U.S., California Insurance Commissioner Dave Jones urged insurers to voluntarily divest from thermal coal, and is requiring annual disclosure of carbon-based investments.

“If the international community, nations, states and local governments adopt the policies necessary to limit global warming to 2 degrees Celsius, then the value of holdings in the carbon economy will diminish dramatically if not drop to zero,” Jones said in an interview.

Renewables and Coal, Japan and Poland – 5/30/16

Poland and Japan: Two very different countries and with very different approaches to coal and renewable energy.

Environmental groups urged the Japanese government to announce a shift away from fossil-fuel financing ahead of the G-7 meeting to no avail.

“As the President of the G7, Japan has an obligation to be a leader, not a laggard on climate,” the environmentalists said in a petition. “First, Japan must stop subsidizing fossil fuels overseas. On the home front, it is time for Japan to reject the fossil fuel and nuclear technologies of last century and instead embrace a clean and sustainable energy future.”

Japan’s energy policy is under close scrutiny from environmentalists because of its reliance on and support for coal. The country has plans for 49 new coal-fired power projects even as some developed countries are shifting away from coal to reduce emissions and health risks. While resource-poor Japan has been trying to diversify its energy sources, the country’s leadership have held fast to the idea that coal would make up 26% of the nation’s power output in 2030 due to the closure of Japan’s nuclear capacity following the Fukushima disaster.

Yet, Japan’s program to encourage more clean sources of energy is starting to show some promising results, with the latest government data showing that the nation produced 45% more electricity from renewables like solar and wind for the fiscal year ending in March compared with a year earlier. Clean energy output, excluding hydro power, increased to 39.2 TW-hours in the 12 months ended March 31, according to data released by the Ministry of Economy, Trade and Industry. Solar outpaced other renewable sources, increasing 61 % to 31.3 TW-hours while wind rose 7% to 5.4 TW-hours. The Fukushima nuclear plant produced 29.3 TW-hours in 2010 before the disaster, according to the International Atomic Energy Agency.

Japan derived 4.7% of its electricity from renewables last fiscal year when hydro isn’t included, according to the Federation of Electric Power Companies of Japan. The government aims bring that number up to 14% by 2030.

In contrast, Poland’s controversial parliament approved a bill that introduces extra requirements for building wind parks as it aims to curb its booming wind industry that is hastening the demise of its loss-making coal industry.

The bill, put forward by the governing Law & Justice party, forces new turbines to be located further away from homes and would halt some new projects after a record expansion of wind energy last year. Poland, Europe’s top coal producer, notched up the continent’s second-highest number of wind-power installations last year with 1.26 GW of new capacity installed. The country now has 5.6 GW of installed wind capacity.

“We want to eliminate the import of used, outdated turbines from western countries,” Deputy Energy Minister Andrzej Piotrowski said in parliament on May 18.

The amended law, which now will be discussed in the Senate and has to be signed into law by the president, included a proposal envisaging potential jail terms for using wind farms without permission that was eventually scrapped.

The country’s six-month old cabinet says that Poland, which generates some 85% of its electricity from coal, has been too quick to support wind generation over its coal power plants. Prime Minister Beata Szydlo, a miner’s daughter from southern Poland, pledged to keep the country of 38 million dependent on coal for decades to come.

The ruling party surprised the industry in December when it suspended the introduction of a new law regulating subsidies for renewable energy. The government also plans to rework an earlier plan to introduce renewable energy auctions in an attempt to reduce support for wind and solar power.

The regulatory uncertainty “is spooking investors and banks,” according to Giles Dickson, chief executive officer of the European Wind Power Association, a lobby group. Investors eager to secure debt funding for wind investments at Polish banks are charged from 9% to 10%, compared with 4% in neighboring Germany, he said on May 18.

Electric Cars SWOT – 5/4/16

Some Strengths, Weaknesses, Opportunities, Threats analysis for Tesla and their electric cars.

Fortunately for Tesla Motors it benefits from a good reputation, attractive cars, first mover advantages, and more as strengths. Unfortunately, it also has many weaknesses such as posting near constant quarterly losses, massive cash outflows, production delays, reliance on Elon Musk as an irreplaceable leader and financial support, and others

It also benefits from unprecedented opportunity as people seek green alternatives to gasoline-powered vehicles and an energy sector on the verge of an electrical revolution.

With the power grid losing its dependence on fossil fuels as the costs of wind and solar power plummet, electric cars may trigger changes in the way all electricity is produced. Since electric cars could wreck oil markets and carbon prices tend to be closely correlated, the inevitable shift away from fossil fuels could happen much faster than anticipated. According to the video explanation from Bloomberg, the electric car could severely damage the oil industry.

The oil industry is sensitive to price fluctuations and changes in demand. Even a temporary price drop can mean massive busts in oil-based economies, as one can plainly see in the number of shale-oil companies and communities going bankrupt since China’s oil demand growth declined. In fact, the initial reluctance of OPEC to prop up prices for oil was at least partially based on the idea that low prices would mean the collapse and slow recovery of U.S. oil production. Electric cars adopted on even a relatively small scale could have a massive impact on demand. And, as the video notes, the ripples through economies and geopolitical dealings based on oil will be massive.

Naturally, a shift away from volatile, insecure oil would mean a shift towards the electric vehicles Tesla provides.

Tesla also suffers from many external threats. Besides the political threat of strong oil and dealership lobby groups to Tesla’s business model, it also has some less obvious issues to face abroad.

Electric vehicles in Hong Kong may indirectly be the cause of 20% more CO2 emissions than gasoline-fueled motors. Hong Kong relies on coal for more than half its power generation, according to Neil Beveridge, a Hong Kong-based analyst at Bernstein. The city will have to shift its power mix toward natural gas and renewables before encouraging the use of electric vehicles through incentives like tax breaks, he said.

“Electric vehicles only make sense in countries where the carbon intensity of electricity generation is low,” Beveridge wrote in a report published Wednesday. “In Hong Kong, and more broadly China, electric vehicles are increasing rather than reducing pollution, with taxpayers effectively being asked to subsidize this.”

Accounting for the carbon intensity of the city’s power generation and the production of the car battery, it is clearly possible for electric cars to add to pollution problems reducing their intangible value, as well as creating a significant threat to expansion in areas with highly carbon intense power like China and India. The loss of the “green” value of electrification is a threat that must be addressed as cars become more affordable for such populous markets.

Another threat comes from Europe, as Germany, the country known for its auto industry, is facing something of an existential crisis with the rise of the Silicon Valley automaker. Earlier this year, a top aide to Chancellor Angela Merkel questioned German auto chiefs about their electrification plans. As a result of the discussion, the German government and the chief executives of Volkswagen AG, BMW AG and Daimler AG agreed to an incentives program offering a rebate of $4,531 on the purchase of a new battery-electric car and financing a network of public charging stations. Car makers agreed to paying half the costs of the subsidies and increasing investment in R&D of related technology.

The auto industry is Germany’s most important, providing one in every seven jobs, so it understandable that the rise of electric and self-driving cars as competitive threats would frighten its government and businesses. Some analysts see the Model 3 as a serious threat for Germany’s car makers since its relatively low price of $35,000 will be affordable for a large group of German consumers, and so the German plan was rushed through to begin before Tesla’s Model 3 started shipping.

“The goal is to move forward as quickly as possible on electric vehicles,” Finance Minister Schaeuble told reporters in Berlin, adding that the aim is to begin offering the incentives in April. “With this, we are giving an impetus.”

Merkel, who hinted in February that she was ready to back subsidies to reach her goal of 1 million electric cars on German streets by 2020, sealed the agreement with automotive CEOs late Tuesday after weeks of discussions over how to divide the funding. The industry originally offered to pay 25 percent of the total.

German auto producers lobbied hard for the incentives. They pointed to support in other European countries like France’s 10,000-euro rebate to drivers trading in older diesel-powered cars or Norway’s electric cars tax breaks, free battery charging, free parking, and an exemption from congestion charges.

“The government has put in place the right steps to give e-mobility a boost in Germany, which the country needs to catch up if it’s to become a leading market for e-cars,” Matthias Wissmann, president of the German car-manufacturers’ association, or VDA. “That’s why construction of a nationwide charging network in step with increased sales should happen fast.”

Driverless Trucks and a Google/Fiat Deal – 5/2/16

Over 100 autonomous vehicles from a dozen manufacturers are now being tested in public. The impact such vehicles will have on economy is staggering as convoys of self-driving trucks threaten to automate away more jobs — and create more cost savings — than any innovation in decades.

With labor representing 75% of the cost of shipping and drivers restricted by law from driving more than 11 hours per day without taking an 8-hour break, a driverless truck driving nearly 24 hours per day would effectively double the output of the U.S. transportation network at 25% of the cost. And adding in fuel efficiency gains only increases savings as the trucks would run at optimal speeds for fuel usage, safety, and scheduling. Since trucking adds to the cost of almost all goods, cost savings will be passed on to consumers as lower prices and higher standards of living.

While the efficiency gains are too good to not pursue, the technology will have equally immense negative effects for the drivers. More than 1.6 million Americans currently work as truck drivers. The loss of jobs will be devastating not only to individual drivers but also to the gas stations, highway diners, rest stops, motels and other businesses that cater to them. So although the average age of a commercial driver is 55 and rising due to the grueling nature of the job, with projected driver shortages set to create more incentive to adopt driverless technology, opposition is inevitable.

A recent demonstration of trucks in Europe making runs sans drivers shows that driverless trucking is coming soon. The primary remaining barriers are regulatory or structural. Highways must be adjusted to account for autopilot quirks like the addition of dedicated lanes for slow-moving driverless trucks and other projects that can only be done with the active support of government. The question will be how long it takes for the prospect of a vastly improved transportation network to overcome the stigma against automation-fueled job destruction.

Autonomous vehicle technology already has its champion lobbyists. Google, Uber and Lyft have already joined forces with automakers Volvo and Ford, in a coalition to influence lawmakers, regulators and the public, Automotive News reported. The new lobby, dubbed The Self-Driving Coalition for Safer Streets, will be led by David Strickland, long-time safety watchdog who was formerly the head of the U.S. National Highway Traffic Safety Administration (NHTSA). The Self-Driving Coalition for Safe Streets will aim to influence regulations allowing rapid adoption of autonomous vehicle technology on the basis of the increased safety of vehicles free from human error.

Fiat Chrysler Automobiles NV recently reached a cooperation deal with Alphabet Inc.’s Google to develop self-driving vehicles to help develop about 100 self-driving prototypes that will be used by Google to test its self-driving technology, the companies said. This agreement is the first of Google’s to integrate its self-driving system.  Google has been in discussions with various auto manufacturers about working together.  The deal comes from a combination of Google’s need for more cars to develop and test its technology and its unwillingness to invest in factories to build them, as well as Fiat’s desire to access Google’s expansive testing records and technical know-how.

Russia: Oil and Subterfuge – 4/29/16

Few economies are more dependent on oil than Russia’s. Revenue from oil and natural gas accounted for about 1/3 of its government’s budget, over half of its exports, and the ruble is correlated closely with oil prices. With prices falling from $100 a barrel to below $30 a barrel, Russia’s GDP fell 3.7% in 2015 with another drop expected for 2016 as prices are expected to stay below $50 a barrel until the end of the year. And even if prices recover soon as Russian officials say, their expectations of an end to a long recession are overly optimistic. Enduring its second year of recession, the Russian government will likely run a deficit of 3.4% of GDP in 2016 and struggle to control the exchange rate of the ruble, the fluctuations of which have undermined recovery policies.

In contrast to Kremlin officials, the World Bank and the International Monetary Fund both expect the economic downturn to continue unless substantial reform takes place, a view shared by many private businesses in Russia.

“We are more cautious, more conservative and less optimistic in the private sector than government officials, who are traditionally more optimistic,” Mr. Aven, head of Alfa Bank, Russia’s largest independent lender, said as he cited state involvement and a lack of an competitive investment environment as reasons for the slow recovery.

Bank of Russia Governor, Elvira Nabiullina, recently repeated that the monetary policy will be focused on inflation control and the development of domestic capital markets in response to sanctions, both conservative moves suggesting a lack of confidence in a quick recovery.

“The pace of economic growth is our internal problem,” she said. “Whatever the oil prices are, even $100 per barrel again, we won’t be able to grow by more than 1.5%-2% without structural reforms and better investment climate.”

Sanctions imposed by the U.S. and the EU over various acts of Russian aggression towards neighboring states are unlikely to end soon. Despite divisions within European nations over Russia, Putin himself admitted that the sanctions will last “for the foreseeable future.”

Opposition to a natural gas pipeline from Russia to Germany is just the latest example of tension between the European Union and Russia, with some eastern members chafing under western leadership that ignores their energy needs. The pipeline is key to Russia’s plans to boost exports. The pipeline has met resistance from eastern EU members including Poland, Slovakia, the Baltic States, and Ukraine, which either get income from gas transit fees or wish to diversify their energy imports beyond an unstable and confrontational Russia, have called Nord Stream 2 “anti-European.”

“At the beginning there was a strong voice that this is a purely commercial project, but I don’t remember any commercial project that would be so intensely debated on a political level,” Sefcovic said in an interview in Bratislava. “It sparked an intensive geopolitical debate on the future of Ukraine and energy security of southeastern Europe.”

In addition, propaganda skirmishes between Russia and Western nations are adding fuel to the fire. Incidents like the “Lisa Affair”, a fake migrant rape controversy attributed to Putin’s regime as means of undermining Germany’s Merkel before regional elections, have only strengthened resolves against Putin even as some pro-Russian, anti-migrant politicians made electoral gains.

“Russia is starting to weaponize electoral processes in Europe,” said Joerg Forbrig, senior program director of the German Marshall Fund of the U.S. in Berlin. “The Lisa Affair was a real eye-opener.”

The moves by the Kremlin to influence German politics have infuriated Merkel’s government and led orders to probe the Kremlin’s role in such scandals. Germany already has a taskforce aimed at countering Russian misinformation; it works on the assumption that Putin’s goal is bolster pro-Russia parties. An official in Merkel’s Christian Democratic Union said almost all of the ruling coalition’s Russian-German voters have defected to pro-Kremlin AfD, which also appears to be getting funds from Russia, according to Alina Polyakova at the Dinu Patriciu Eurasia Center at the Atlantic Council in Washington.

In France, Marine Le Pen’s far-right National Front has received funding from a Russian lender and is seeking 25 million euros from others to bankroll its 2017 presidential campaign. Le Pen, Putin’s most prominent political supporter in western Europe, is currently polling second.