Through a mix of unseasonably warm weather so far this winter and low energy demand, European countries seem to have averted a much-feared energy crisis this year. “This winter, it looks like we are off the hook,” IEA executive director Fatih Birol said at a press conference earlier today.

He was referring, of course, to Russia’s February invasion of Ukraine which, notwithstanding the horrors of armed conflict and the ramifications of Europe’s first major ground war since 1945, sparked economic uncertainty as Russian energy companies began limiting natural gas flows to Europe.

The worst fears, that Europeans might freeze in their homes or that industry would come to a standstill, have subsided as European gas storages are almost full and promise to hold up against demand this winter. But JPMorgan Chase CEO Jamie Dimon is warning Europeans—and the rest of us—to brace for a prolonged crisis.

“The danger of this war is extraordinary,” Dimon told CBS’s Face the Nation in an interview aired Sunday. “This oil and gas thing, it looks like the Europeans will get through it this winter. But this oil and gas problem is going to go on for years.”

Dimon said the Ukraine war could last for years, and in the meantime Europe’s energy security will be at risk.

“If I was in the government or anywhere else, I’d say, ‘I have to prepare for getting much worse.’ I hope it doesn’t. But I would definitely be preparing for it to get much worse,” he said.

Dimon does have an idea for what could help, though.

Europe’s energy future

Europe has been able to skate past the worst of an energy crisis so far this winter, although the worst months may still lie ahead. The heating season and highest energy demand tends to be around January and February, while December cold snaps have already lowered temperatures across the continent this month.

European officials are banking on the abundant supplies of natural gas stored away in underground sites to get them through the winter, but experts fear that the worst of the energy crisis will be next year, when Russian natural gas supply will be even more limited and Europe might have to contend with increased competition from other buyers, including China, where a recent lifting of COVID-19 measures could raise energy demand.

International organizations including the OECD and the IMF have warned that Europe’s energy crisis could get worse next year and that governments should evaluate how to protect consumers against high prices. Supply uncertainty has already raised electricity prices across Europe this year, and Dimon warned they could go even higher in the years to come.

“Europeans are terrified. Their energy prices are two, three, four, five times ours, which is hurting consumers, which the governments have to do something about, and it’s hurting businesses,” he said. “And it’s just started. And so the pain and suffering could get a lot worse.”

Dimon said that governments and energy companies should focus on investing more in energy infrastructure to protect against a worse crisis next year. He called for a “Marshall Plan for energy,” referring to the investment program led by then-Secretary of State George Marshall to rebuild Western Europe’s infrastructure after World War II, a program that was a major soft-power weapon for the U.S. at the onset of the Cold War. Dimon called for support for more investment in both fossil fuels and renewable energy sources, modeled on Marshall’s, well, plan.

A “Marshall Plan for energy”

The war has led to a surge in global investment and expansion of renewable energy capacity, according to an industry forecast released last week by the IEA. The agency predicted that the next five years will see as many renewable power installations as the past two decades, and that solar power will surpass energy generated by coal by 2027 as initiatives including the U.S. Inflation Reduction Act are set to provide significant incentives for renewable energy projects. 

In a report published in October, the agency praised renewables for playing only a “marginal role” in rising electricity prices, while finding that natural gas alone accounted for 50% of rising electricity generation prices.

But while Dimon acknowledged that many countries have been pivoting away from fossil fuels toward cleaner energy sources, he said that governments needed “secure, reliable, cheap oil and gas” to keep electricity prices down and bemoaned “underinvestment in oil and gas” that could come back to harm economies in two or three years.

“To me—to solve climate—we kind of need all the above,” he said. “Gas is the best and cleanest way to reduce coal, which is the best way to reduce CO2.

“I think we need to call a Marshall Plan for energy, you know, and that’s got to be all the above, and all the people involved,” he added.

Dimon’s statements echoed recent warnings by oil-exporting OPEC member nations that have called underinvestment in fossil fuels “one of the greatest challenges the industry is currently facing.” While testifying to Congress in September, Dimon criticized U.S. energy policy for promoting underinvestments in oil and gas projects. “Investing in the oil and gas complex is good for reducing CO2,” he said, while calling for regulations that could keep energy supply secure now while continuing to expand renewable energy.