Teddy Roosevelt believed in speaking softly and carrying a big stick. Donald Trump will never speak softly, or even politely, but he will soon pack the power inherent in presiding over the world’s number one producer of oil and gas.
Fifty years ago, the US was the world’s largest importer of oil, as demonstrated by the pain suffered during the Arab oil embargo. Now, largely due to fracking, any such future threat is moot while Texas’s Permian basin, in effect the world’s fifth largest oil producer, is expected soon to be responsible for half of all US oil output.
The question now is whether other western countries will embrace this development as a way to break dependence on autocratic regimes like Russia, Iran, Qatar and Saudi Arabia. Particularly promising is natural gas, which provides reliable energy that produces an estimated 40 per cent less carbon dioxide (CO2) than coal and 30 per cent less than oil.
A shift to natural gas, as an intermediate step in reducing emissions, makes sense – that is until politics and climate theology come into the picture. In Europe and in the UK, politicians insist that we will soon be able to get along just fine without evil fossil fuels.
In Britain, such efforts have succeeded in securing a two thirds drop in UK energy production, while demand has fallen only by a third; once a net energy exporter, the UK increasingly depends on imports, even while an estimated 25 billion barrels of oil remain untapped. Studies have shown that oil imported into the UK produces more carbon emissions per delivered barrel than oil produced in the UK.
Now with the highest electricity prices in Europe, and with particularly punishing rates for industry, manufacturing has cratered. Since 1990, the manufacturing share of GDP in Britain has dropped by roughly 50 per cent.
But this misery is not confined to Britain. In the EU, nearly a million industrial jobs have been lost over the past few years. Many will have gone to China and some developing countries.
The primary case study is Germany, a fading industrial power amid high energy prices. The country’s economy is now utterly vulnerable to changes in the weather. Imagine this: Germany’s companies are forced to endure ruinous price increases at times of dunkelflaute – a combination of cold weather, cloud cover and light wind.
Yet even as energy supplies are constrained, the EU and the UK are insisting on a rapid transition to electric vehicles. If kept in place, this will cause Germany’s entire industrial structure to decline, resulting in the potential loss of upwards of 400,000 of its estimated 800,000 auto jobs by 2030.
The only clear winner in this ideology-driven kabuki show is China, which seeks dominion over EVs and other renewable technologies even while it is accused of emitting more greenhouse gases than the entire developed world put together. Now apparently on a coal plant building spree, China’s state-directed economy cynically uses cheap, reliable fossil fuels, and control of critical minerals, to dominate both EVs and the solar-panel industry. Meanwhile, western “green companies”, like Swedish battery maker Northvolt, file for bankruptcy while others suffer massive losses, particularly EV startups.
Even if you accept that China’s dominance is worth the price of “saving the planet”, current energy policies will not create an electrical grid to power it. As demand for EVs and reliance on renewables grow, we could see brownouts even in energy rich Canada and the US in the coming years. The North American Electric Reliability Corporation has found that a deep cold snap would cause outages in swathes of the country.
Across the pond, Europe and the UK are already struggling to build enough capacity to support their relatively small number of electrical vehicles. In Britain, in 2021, the House of Commons Public Accounts Committee admitted that there was a “mountain to climb” to meet transition targets, and doubted that the UK government had “sufficiently thought through” its EV roll-out plans.
The shift to artificial intelligence is likely to intensify this crisis. Microsoft is reported to be opening a new data centre globally every three days. These often loud, intrusive and power-hungry operations could grow from 4.5 per cent of energy demand to 10 per cent by 2035. Firms like Google, a long-time ally of the UN in promoting draconian climate orthodoxy, now admit they are spewing out far more greenhouse gases – about 50 per cent more than in 2019. Microsoft and Google are already estimated to consume as much energy as whole countries, including Ghana, Iceland and Tunisia.
The needs of the tech oligarchs could prove a final push towards energy realism. There has been a growing movement among tech giants like Amazon and Microsoft to encourage the development of nuclear power, although sometimes stymied by the objections of Biden officials. Microsoft even pushed to reopen the shuttered Three Mile Island plant in Pennsylvania.
Whatever the political class decides, reality suggests that the dominance of fossil fuels, even coal, will persist for the foreseeable future. Trump’s “drill baby drill” policies could further entrench this pattern, and offer, in the short-term, a solution to the West’s energy shortfalls. For Europe, reversing President Biden’s ill-considered attempt to stymie the growth of LNG exports, as is now likely, should be seen as manna from heaven.
Energy realism, open to a diverse and changeable mix of sources, is imperative if the United States is to avoid the fate of the last industrial vestiges of Britain and the rest of the green West. If we continue to place all our bets on the sun and wind, we could soon be enjoying living standards consistent not with an abundant future, but more akin to those of the Middle Ages.
This piece first appeared at The Telegraph.
Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. He is Senior Research Fellow at the Civitas Institute at the University of Texas in Austin. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.
Photo: Carol Highsmith, via Library of Congress in Public Domain.
Email this Story
