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The Energy Fight

War in Europe has revitalized policy battles over energy supply.
The Energy Fight

The West’s coffee tables groan with towers of political magazines, each breathlessly defending the glory of globalized trade.

If you stacked all of those glossy journals into one massive economic kineograph and started flicking, it would display something like this: “Bilateral trade promotes peace between countries that share borders, and growing global markets enhance peace between distant countries.”

But decades of voices droning on about the supposed link between extensive trade and unbreakable peace are being drowned out by the whine of rockets and the thundering roar of Russian fighter jets.

Putin’s invasion of Ukraine has now entered its fourth week. While mortar shells crashing into cars and roofs have embolden the Ukrainian spirit of resistance, the return of European continental conflict is crushing conventions and ripping apart liberal sacred cows.

Chief among this collection of sacred cows is the preference for global markets over secure national supply chains. This globalist economic mentality has starved countries of control over strategic commodities like steel and wheat. Its worst effects have come in energy markets.

For decades, Western nations have endured the same cycle whenever geopolitical events drive up fuel prices. Politicians conduct urgent charm offensives with the leaders of Middle Eastern states, urging them to pour more black gold into our shallow cups. As Russia’s invasion of Ukraine rumbles on, that cycle is well underway. Boris Johnson was in Saudi Arabia last week; Joe Biden is struggling to get through on the telephone. Iran is releasing some Western political prisoners after years-long diplomatic disputes were suddenly resolved. Coincidental timing? Probably not. Iraqi oil revenues are approaching record highs. They can be confident of smashing those numbers now.

And while these Western leaders lavish MENA’s mullahs and tribal kings with shedloads of cash, they reassure concerned parties at home that now is the time for a new energy strategy that weans us off foreign oil supplies. That’s why Boris Johnson reaffirmed Britain’s focus on renewable energy—with a new offshore wind commitment—while his government jet set its itinerary for Riyadh.

But then the crisis passes, and we return to the cozy energy status quo—relying on foreign imports and squandering our duties to national security and sustenance. We cannot allow this to happen again.

Boasting bountiful subterranean resources, the U.S. fares better than the European economies when faced with gas shocks. But Washington has similarly failed to establish an energy-security plan that doesn’t demolish the wallets of ordinary Americans whenever international events take a turn for the worse.

Even though it produced more oil than consumers guzzled in 2019, the U.S. is still at the mercy of the international markets that set prices for global consumers. Coupled with a nervy fracking industry that is reluctant to increase supply, working-class Americans who rely on the pump to earn a living are being thwarted by a market that doesn’t work for them. Rising gas prices send shockwaves up and down the supply chain, hurting businesses big and small. Ultimately, this is the cornerstone test of energy security: Can you ensure that your populace is adequately protected by sudden market shifts? Washington can’t.

Thankfully, some Western governments are responding. Britain’s Foreign Secretary Liz Truss—who prides herself on belonging to the libertarian and globalist camp of the Conservative Party—has lamented how “the free world overall has focused too much on getting cheap oil, cheap electronics, cheap goods at the expense of our freedom and security.” This is a significant intervention from a politician who was, until recently, praising Britain’s Uber-loving “#freedomfighters.”

Germany has for decades enjoyed what Truss described as a “freedom-loving, free-market” approach to Moscow, but has now scrapped its pipeline deal with the Kremlin and opted to seek alternative supplies.

The European Commission on March 8 published a proposal to ensure E.U. nations achieve secure, affordable energy independent of Russian fossil fuels before 2030. The Commission proposes quadrupling hydrogen consumption and turning to renewables to avoid paying Moscow the $118 million per day it currently coughs up. They’ll hunt for alternative gas products in the short-term and ramp up plans for renewable alternatives at home.

But for every reassuring statement delivered by globalists reeling from a hard slap of reality, there are still plenty of disagreeable perspectives being flung around by self-appointed luminaries as a result of the return to peer military conflict in Europe. Some people have played a lot of Fallout, the post-apocalyptic video game series, and have realized that they’d like to experience it for real, so they’re calling for urgent and widespread NATO strikes against the Russian military. Others, meanwhile, are reacting to the biggest energy-supply catastrophe in living memory by urging policymakers to do nothing.

The lead offenders in this realm are the influential figures in European green and socialist parties, who have railed against alternatives like nuclear power and fracking. Caroline Lucas, Britain’s sole Green Party M.P., has said that shelling on Ukrainian nuclear plants is a good reason to oppose the development of those plants.

Sadly, some of this misguided thinking has traction. In Berlin, where the government has lurched away from its close relationship to Russia, legislators are still resisting the nuclear-energy option. The Reichstag has stood by the Merkel-era plans of shutting down their power plants by the end of the year, despite the fact that this crazed position leaves them incapable of bartering at the geopolitical table.

Revitalizing the nuclear industry will be central to the Western strategy of achieving energy independence. It is the bugbear of environmentalists the world over who prefer dogma to detail and rage to reality, but their feverish lobbying must be overcome to promote what is by far the most effective source of power. The British prime minister is set to hold a summit with nuclear-industry executives after announcing his dedication to the cause during last week’s spring conference in the north of England. With any hope, other Western powers will follow suit.

Russia knows that fracking and nuclear power pose a threat to both their income and their geopolitical jostling. Russian government officials have funneled cash to environmentalist activists who campaign against digging for shale. Moscow has also infected the European nuclear markets, with several E.U. nations relying on Russian technology for their power plants. Most of the 32 nations that use nuclear power rely on Russia for some part of their supply.

The tired old cycle of the Western energy-security debate is once again stuck at the hot-air stage. But this time it feels different. The commitments are sterner, and the reality is bleaker. Hopefully this time our governments will finally leap towards secure supply.

Charlie Peters writes from the U.K.

This article was supported by the Ewing Marion Kauffman Foundation. The contents of this publication are solely the responsibility of the authors.

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