By: Laura Vitelli
September 8 2022
The energy crisis is primarily the result of recent changes to the energy market following the Russian invasion of Ukraine.
Amid the ongoing energy crisis across the U.K. and parts of Europe, online proponents of conspiracy theory narratives have begun to explain the crisis as part of an unfolding "Great Reset" conspiracy orchestrated by the World Economic Forum (WEF). One post on Facebook claims that the increase in consumer energy prices is entirely the U.K. government's fault (presumably acting at the behest of the WEF) and has nothing to do with the global energy market. The post states that "If prices of gas and electricity were really going up, the energy company's profits would have been hit and would have fallen until prices to customers were increased [...] it is THE GOVERNMENT that is doing this to people and businesses, DELIBERATELY [sic].”
There are numerous factors contributing to the spike in consumer energy prices, particularly the ongoing war between Russia and Ukraine. Economic sanctions against Russia following its invasion of Ukraine have led to a decrease in Russian gas and oil supply to Europe. The U.K., as one of Europe's biggest natural gas consumers (around 78 percent of U.K. homes use gas-powered heating), has been hit particularly hard by these changes to the international energy market.
Changes in the availability of Russian gas can cause as much havoc in the energy market in Britain as in mainland Europe, even though prior to the Russia-Ukraine war, the U.K. only imported 4 percent of its total gas supply from Russia, and has not directly sourced any of its gas supply from Russia since the invasion. Around half of the U.K.'s gas supply comes from its own sources in the North Sea. However, the U.K. still trades with the European market to fill the rest of its demands, importing around 47 percent of the U.K.'s gas supply predominantly from countries such as Norway (from which a third of the U.K.'s total gas supplies are derived) as well as the Netherlands and Belgium.
Historically, several EU countries have obtained a large percentage of their own gas supplies from Russia – around 40 percent in total. The decrease in Russian gas and oil supply to Europe means that several European countries have had to fill the gap in supply elsewhere. For instance, Germany was previously the biggest consumer of Russian gas in Europe. However, in June, Germany reported that it was receiving 60 percent less gas from Russia than usual. Norway is now exporting more gas to other countries as they seek to maintain a stable supply, which has led to higher market prices in the U.K.
Furthermore, the claim that record energy company profits is part of a conspiracy to artificially inflate consumer prices confuses energy producers with energy sellers. Most companies separate the two businesses: energy producers (e.g. Centrica) are companies that actually extract resources such as gas from the ground, while energy sellers (e.g. British Gas) purchase these resources wholesale from the producers and provide them to the consumer market.
It is true that several gas producers have seen record profits. This is because the cost of extracting oil and gas from the ground has not increased markedly in the wake of recent events. However, the higher demand for non-Russian energy sources across Europe has increased the market price of gas from European energy producers.
The "Great Reset" is a conspiracy theory that claims the World Economic Forum, an international non-governmental organization, is at the center of a concerted effort to radically overthrow the existing international economic and political order and install a totalitarian “One World” government through a series of artificial crises. Proponents of the conspiracy theory have made a wide range of false claims about recent events and phenomena. The conspiracy theory came from a misinterpretation of the WEF's "Great Reset Initiative" which launched in 2020. This initiative aims to promote and facilitate economic recovery from the global COVID-19 crisis in a manner that prioritizes sustainable development. Although there may be legitimate criticisms to be made concerning both the World Economic Forum and the Great Reset Initiative, there is no evidence to support the claims made by proponents the resultant conspiracy theories.
The ongoing energy crisis unfolding across Europe is the result of several factors centering around recent changes to the energy market and can be clearly explained as such. We have therefore marked the post as false.