THE COST OF IRRATIONAL POORLY PLANNED GREEN AGENDA
UKRAINE WAR HIGHLIGHTS WEAKNESS AS WELL AS STUPIDITY
The jury is still out as to whether the easy money and excessive spending recklessness of the Biden Administration will definitely lead to a recession. Unfortunately, the odds of a recession is substantially increasing and even the slight chance of a recession is totally unnecessary. In previous papers/articles (posted in georgeeconomics.com) the overall effects of the money, spending and energy policy blunders of the Biden Administration are spelled out in detail. One argument was posed in those articles is that the American left’s war on fossil fuels has filled Russia coffers noting also that, historically, a steep rise in the price of oil has preceded each of Putin’s aggressive adventures since he took over the reins of power in Russia. Many of the pundits point towards Biden’s weakness as a leader both on the national and global stage as the primary reason Putin and their allies, China and Iran are becoming more aggressive. Biden’s and the American left’s weakness is the obvious dominant reason for the increasingly belligerent behavior of China, Iran and North Korea, but only one of the underlying reasons for Putin’s aggression.
China’s communist party must be laughing at both the US and Europe as they continue to build coal fired power plants with a life of between thirty and forty years while the US and Europe strangle themselves with irrational green agendas that are totally out of sync with technological reality. The European left has idolized a screeching child/teenager in their move to be carbon neutral in record time and the American left has waged a war on fossil fuels without gauging the consequences of totally unvetted energy policies. Europe (especially Germany) has become dependent on Russian natural gas (40% of total gas consumption) and to much lesser extent on Russian oil in an effort to shift off of coal, oil and, in the case of Germany, nuclear power. This dependency on Russian energy has put Europe in a weak position when dealing with Russian aggression.
The Russian invasion of Ukraine, by bringing war to the doorstep of the European Union, has been an eye opener for the European left as their past fossil fuel decision making has put them in the position to having to scramble to free themselves from the dependence on Russian energy. They are making the hard decisions which includes Germany not decommissioning nuclear power plants as planned and reopening coal fired power plants (actually lignite), and all of Europe finding alternative sources of natural gas (imported as LNG) and oil. It will take some time for Europe to replace Russian gas and oil, so Russia will still have plenty of funding from Europe to pursue their aggressive activities. The European left has no choice but to revisit their overzealous green energy agenda because security issues have taken front stage given that they are merely a “stone’s throw” from the horrors of war occurring next door in Ukraine.
The American left is actually more guilty of massive energy stupidity than the Europe left. The United States is blessed with massive oil and natural gas resources that could have been available for export to European nations except for the drag on energy production resulting from the American left’s war on fossil fuels that has been waged aggressively for years. As discussed in more than one paper (posted in georgeeconomics.com over a number of years) Biden’s fossil fuel policies, similar to Obama’s policies “on steroids”, includes closing off federal lands for energy production and instituting massively restrictive regulatory policies that choke off production on existing leases pipeline projects and LNG infrastructure. The American left, through a “hyper green” effort to restrict financing available for fossil fuel production and transportation by forcing ESG (environment, social, governance) environmentally related non financial factors into fossil fuel financial decision making, has coupled its efforts with the Democrat party to shut down oil and gas development.
Putin’s war with Ukraine has highlighted the economic and security reckless of Biden’s socialist money, spending and energy agendas. Biden and the progressive American left were already reeling from the inevitable results of their SPEND SPEND SPEND MONEY MONEY MONEY HYPER GREEN ENERGY agendas (addressed in greater detail in a number of papers posted in georgeeconomics.com). These agendas have resulted in the highest inflation rates in decades and an inverted yield curve, which together portend a totally unnecessary recession in the near future. The American public is suffering from high prices for everything. The stupidity of the American left is in full display, as their unrelenting attack on fossil fuels in support of a poorly staged green energy push has placed a massive burden on middle and lower income consumers. In a delusional frenzy Biden and the American left handcuffed the oil and gas industry, as discussed above, just as the economy was beginning to open up after a year of wide spread pandemic lock downs.
Surprise, surprise, the oil and gas industry curtailed development and production during the 2020 lock downs and when the economy was opening up in 2021 Biden and the American left saw to that oil and gas producers and pipelines (including LNG terminals) were constricted by the closing of Federal land for oil and gas for development and obstructive regulation relating to permitting. The price range of US (WTI) oil in the final year of he trump administration when the United States was a net exporter of oil and natural gas and the dominant price leader in the global oil market as a swing producer was between the low $50’s to the low $60’s per barrel. The price of oil in Europe (Brent) follows a similar pattern at a slightly elevated level. When Biden took office and the economy was coming out of lock down the average price of oil per barrel was in the low to mid $50’s.
By the start of the Russian invasion of Ukraine the price of oil was close to $94 per barrel or at least $30.00 higher than the upper range of the price of oil during the Trump Administration pre-pandemic. This increase was the intended outcome of Biden’s and the American left’s war on fossil fuels. The oil price reaction to the Russian invasion of Ukraine created a short run spike that will likely settle in the range of $100 -$110 per barrel (WTI) during the war. Clearly, most of the total price increase since Biden took office and its massive contribution to inflation is attributable to the American left’s myopic war on fossil fuels. The Ukraine war shoved a wrench in the spokes of the green new deal zealots’ plan to force the premature all-in adoption of renewable energy before the technology (IE science) could support that effort without unintended or even catastrophic consequences. It was apparent from the start that Biden and the American left were hoping for a quick end to the war in Ukraine so that it would not derail their war on fossil fuels agenda. Not only were their actions reactive not proactive, they slow walked and limited the scope of lethal military aid to Ukraine. Biden telegraphed to the world his weakness.
The United States should not have been subjected to the spike in the price of oil and inflation brought on by the American left’s socialist driven hyperventilating green agenda and money/spending crusade. The American left failed the free world by preventing the United States from being able to supply much of Europe’s natural gas and oil needs. As stated earlier many pundits attribute the Russian invasion on Biden’s blatantly obvious weakness. In reality, Biden’s and the American left’s misguided war on fossil fuel is more than equally at fault. Not only did the unnecessary spike in the price of oil and gas fill the coffers of Putin’s war chest, the constriction of American oil and gas producers guaranteed European countries dependency on Russian imports. Trump supporters would like to believe that ultimately Putin would be too afraid of Trump to pull off such an adventure as the invasion of Ukraine. Even though that may be partially true, under a Trump Administration American oil and gas producers would be running on all cylinders, the price of oil would have been significantly lower, Putin would not have anywhere as much money in his war chest and Europe would have more alternatives for Russian oil and gas. It is irrelevant to ponder whether it is Biden’s and the American left’s weakness or their green agenda war on fossil fuels stupidity that is the root cause of Putin’s invasion of Ukraine. It does appear likely, however, that the Ukraine invasion would have been too high a risk for Putin if he had less funding and Europe had alternative oil and gas sources – long before Biden and the American left exposed their weakness.
The American left will insist that the Russian invasion of Ukraine is mostly attributable to the criminal activity of Putin himself. We have known for some time, however, what Putin is, given his history in Georgia and Crimea. Why, other than severe myopia and terminal stupidity, would you facilitate the fattening of his war chest. Keep in mind the old adage that when handling a snake and you get bitten – that is what snakes do! The only logical conclusion is that Biden and the American left are both weak and stupid. Note that this paper does not purport to address the underlying issues that have, for any reason, led Putin to believe that his aggressive behavior is warranted. The expansion of NATO to his very doorstep would be one possible perceived threat that Putin has fixated on and blew up into an excuse to invade neighboring countries that were once part of the Soviet empire.