South Africa: State of Collapse

South Africa is in the midst of a political crisis, and energy shortages are at the heart of it. You'll be forgiven for not having heard—western media has preferred to focus on the war in Ukraine and everything else has fallen through the cracks. Here's a rare report on the matter, from Britain's The Spectator:

Blackouts of up to ten hours a day are bringing businesses to a halt, making teaching harder and turning traffic lights dark. Food is rotting in warm fridges. There were more than 200 blackouts last year and they have continued every day so far in 2023.... The cause is a debt-ridden and run-down fleet of power stations, which have been starved of repairs and regularly break down. Electricity supplies have to be switched off to stop the grid collapsing....

The power cuts are affecting every sector. Erratic supply is hitting the country’s mining giants, its major exporters. Small grocers and supermarkets are shutting shop. ShopRite, Africa’s biggest grocer, said in its financial results that it had to spend an extra £26 million on diesel in the final half of last year to run supermarket generators during power cuts. The country’s sugar industry estimates it will lose £33 million this year. Unemployment is running at around a third.

And if you are wondering what this means for regular South Africans, read this lengthy Twitter thread. A few excerpts:

How did this happen? It is a complex story, but it has a few key themes running through it. First of all, corruption at the state-run energy utility Eskom. Farmer details how former president Jacob Zuma spent years helping his cronies embezzle money from Eskom. But the corruption didn't end when Zuma left office. When Eskom brought in a new CEO, André de Ruyter, to reform the organization, he found that it was rife with criminality. According to de Ruyter, "Machinery has been deliberately sabotaged so that gangs can benefit from maintenance contracts; good coal is stolen and sold off, to be replaced with poor-quality fuel or even rocks." And when he tried to get to the bottom of it, someone slipped cyanide into his coffee. De Ruyter recovered, but he ultimately resigned in frustration, and has decided to leave the country. He told The American Conservative's Helen Andrews, “I think it will be good for my health.”

Hard times, indeed...

Second, incompetence. Andrews' report explores how the centrality of affirmative action polices -- intended to combat inequality in a nation which spent decades under a notorious apartheid regime -- has left the company unable to deal with this kind of crisis.

In 1995, [Eskom's] senior management was mandated to go from 70 percent white to 50 percent black by 1999 and 75 percent black by 2005. In 2008, Eskom’s head of human resources announced, “Over the next five years...Eskom has to appoint two new staff every day, and it is adamant that one of them will be a black woman.”

Well it has now been 15 years, and the company is $26 billion in debt and the power grid is on the verge of collapse. Aptitude-based hiring does have its advantages.

And, of course, there is the environmentalist angle. South Africa is known for its coal mining, something that environmentalists and their political lapdogs have been complaining about for years. In order to stay in the good graces of their western counterparts, South Africa's government—lead by the corrupt African National Congress party of Nelson Mandela since 1994—has signed onto increasingly onerous environmental regulations over the last several years. Their object is the eventual phase-out of coal. What will it be replaced with? There have been some vague gestures at renewable energy, but the real answer is nothing. They haven't thought that far ahead.

Which is to say, western elites have fomented this crisis. Moreover, a lot of this should remind you of their vision for America. Skyrocketing energy prices, inflation, crime rates, equality-of-outcome-ordered affirmative action, pie-in-the-sky energy policies -- sounds like a Leftist paradise. Except none of them would want to live there.

Swiss to EV Drivers: Stay Home

How's this for the least shocking headline of the year: "Swiss look to ban use of electric cars over the winter to save energy." From Der Spiegel:

Switzerland could be the first country to impose driving bans on e-cars in an emergency to ensure energy security. Several media report this unanimously and refer to a draft regulation on restrictions and bans on the use of electrical energy. Specifically, the paper says: “The private use of electric cars is only permitted for absolutely necessary journeys (e.g. professional practice, shopping, visiting the doctor, attending religious events, attending court appointments).” A stricter speed limit is also planned highways.

Not shocking, of course, first because much of the world is in the midst of an energy crisis at the moment, brought about in part by the war in Ukraine and in part by the West's increasing reliance on unreliable "renewable energy." There just isn't enough juice on the grid to force everyone into electric cars, which fascist environmentalists hope to achieve within the next 10-15 years. In fact, E.V. manufacturers have been saying the same, at least the honest ones.

But, second, because another Keen-for-Green state, namely California, called upon E.V. owners not to charge their vehicles this past summer for the same reason.

So in our Electric Vehicle future, you can look forward to not be able to drive in the winter or the summer. Or we can stick with the gas- and diesel-driven cars we already have, and which are already the most environmentally friendly option. Just ask Toyota Motor Corporation president Akio Toyoda, who has said:

The more EVs we build, the worse carbon dioxide gets… When politicians are out there saying, ‘Let’s get rid of all cars using gasoline,’ do they understand this?

Unfortunately they do not. Or, worse... maybe they do.

'Green' Belgium Nukes Itself

On Friday, September 23rd, at precisely 9:31 p.m., Belgium's Doel 3 nuclear reactor was disconnected from the nation's power grid, beginning the process of its complete decommissioning. It should be noted, there is nothing wrong with this reactor. It's just that the Belgian government, intoxicated by environmentalist platitudes, passed a law in 2003 which stipulated that all nuclear power plants must cease producing electricity 40 years after they went online.

This is madness.

As we've discussed before, Europe is in the midst of an energy crisis, with various countries throughout the continent preparing for oil and natural gas shortages this winter, and related blackouts. Meanwhile, according to The Brussels Times, "keeping the reactor open would safeguard over 50 percent of Belgium's yearly electricity needs."

That's a pretty big carrot, while the threat of energy shortages in freezing temperatures should serve as the stick. Consequently, the current government (whose prime minister, Alexander De Croo, has been sounding increasingly pessimistic about Europe's energy situation over the next decade) has belatedly seen the light on nuclear power -- on September 14th Interior minister Annelies Verlinden called for the plants closure to be delayed, only to be told by the company which operates Doel 3, Engie, that "[t]o change plans at such short notice is just not feasible."

Other than the logistical challenges that renewing the reactor would bring, there are also legal barriers that would need to be overcome: "It is legally prohibited for the reactor to produce any more electricity after 1 October 2022," [Engie spokesperson Nele] Scheerlinck stated. This is written into Engie's operating license. Furthermore, the power plant's director Peter Moens told Belga News Agency that delaying the shutdown was "neither wise nor advisable," not least given that most of the staff working on the reactor have already planned to work elsewhere.

Maybe they shouldn't have waited to ask until nine days prior to the shut-down. Or, even better, maybe they shouldn't have passed that inane regulation in 2003 in the first place. No doubt at the time Belgian Greens imagined that this was a risk-free move, because, surely, the world would have long-since developed a magical energy source which could satisfy their exacting (re: unrealistic and irrational) standards before it would matter. Yet here we are, twenty years later, and the energy sources they hate most -- nuclear, natural gas, etc. -- are still on top, and have even contributed more to worldwide carbon emission reductions than their animal-slaughtering windfarms and strip-mined rare earth mineral-requiring solar panels. Meanwhile, worldwide economies have been thrown for a loop by the WuFlu (and our absured governmental responses to it), and the energy markets have gone to hell thanks to Russia's invasion of Ukraine (and our absurd governmental responses to that).

Perhaps these things were unforeseeable in 2003, but it is any competent government's job to keep the country as ready as possible for such disasters. Semper paratus, as they say.

In Britain, the Time Bell Rings

Observing the United Kingdom sailing headlong into a sea of troubles over energy and inflation, a cynic might well say: “Lucky Boris Johnson—he was forced out of power at exactly the right moment. Someone else will now have to carry the can.” It’s true that Britain’s economic troubles, which were already growing, have metastasized dramatically in the last few months, two in particular—a general rise in all-round inflation to 10 percent and a still sharper rise in regulated gas and electricity prices from $2,331 now to $4,237 in October and $5,026 in January.

Together they add up to a massive “cost of living crisis.” And because they grow out of deeply-rooted problems and self-destructive policies in the U.K.’s long-term economic strategy, it will take time and tough remedies to eradicate them.

As always, however, there seems to be an inexhaustible supply of people lining up to carry the can. About a dozen senior Tories put forward their names to succeed Boris at the start of the Tory leadership election. They were whittled down to two of Boris’s ministers—former Chancellor Rishi Sunak and current Foreign Secretary Liz Truss—who are fighting a battle of debates on economic policy across the country in front of Tory voters and activists. We’ll know the result by September 5, with Truss now the favorite.

Truss: ready to lead?

[My own snapshot take: she’s the better bet on supply-side and de-regulation policies to improve productivity and revive British industry; he’s the safer pair of hands on financial and budgetary policies to restore a stable financial framework that would help the economy to expand without overheating. But both should be more prepared to cut state spending and borrowing.]

Whoever wins the premiership then, however, will have to face a general election within about 28 months. Given the severity of Britain’s problems, the Tories will undoubtedly face an uphill battle. That means Sir Keir Starmer, Leader of the Opposition, must now be taken seriously as a potential prime minister.

And indeed Sir Keir, a progressive left-wing lawyer before entering politics, whose usual pained expression is that of a man who has just swallowed a live fish out of politeness at a diplomatic dinner, and who has been struggling to make an impact on the electorate, has been given a shot in the arm and buoyancy in his step by the crisis.

Labour is demanding the recall of Parliament to debate the “cost of living crisis.” That’s quite a shrewd demand since Johnson is now a “caretaker” Prime Minister who constitutionally has to leave all major decisions to September the 5th and his successor. Starmer's attack on the Tories as a “do nothing” government in the face of the cost of living crisis then carries more weight. By contrast, he was able to step up to the plate with his own remedies in a speech that was better received than any earlier efforts and proposed solutions that according to opinion polls are in tune with the popular mood.

Those solutions—an energy price “freeze” paid for by the $34 billion proceeds of a higher windfall tax on oil and gas producers— are not new. They have been kicking around the Labour party’s thinking on energy since two leaders ago. And when Rishi Sunak himself was chancellor only a few months back, he introduced a much milder $6 billion version of the same thing which he delicately called a “temporary, targeted energy profits levy” of 25 percent. (It came accompanied by a 90 percent tax relief for firms that invest in oil and gas extraction in the U.K.)

Starmer: I can see No. 10 from here.

The problem with such “concessions” to opposition attacks and the popular mood is that they concede the principle without satisfying the demand. Worse, they make Labour’s proposals look like common sense to which the Tories are offering only a miserly response.

Commonsense is a rare and valuable commodity in public life, but economics is one of the very few areas where it can’t be applied wholesale. Commonsense suggests that we should charge lower fares for railway journeys at rush hours when the trains are crowded and uncomfortable. Economists respond that we should charge higher fares then and lower fares at off-peak times to encourage people to travel in less crowded and more comfortable conditions at all times. If we ignore them, commonsense ensures that we end up strap-hanging for hours in cattle cars.

In the same way the economically sensible response to higher energy prices is to devote state assistance to cash subsidies to the consumer—with larger subsidies going to poorer people for whom energy is a bigger proportion of their total spending. People then get to decide whether to devote this increase in their income to energy, to food, or to their other household needs. They know those needs better than “the Man in Whitehall.”

Given this full responsibility over how to spend their total income, they would be free to change their behavior by, for instance, using less power than usual. Moreover, high electricity prices, for instance, would give them further encouragement to do so, thus reducing demand for electricity, oil, and making a gradual start to solving the energy crisis in general.

O, lucky man!

So much for the demand side. On the supply side, as long as prices remain high—and any decline would likely be gradual—energy companies would have the incentive of high profits to search for new oil and gas fields and to re-open old ones closed in response to regulation. (We already see that happening.) Even as demand was being moderated by high prices, supplies of energy would be encouraged and increased by them. The energy market would come into balance, and other things being equal, prices would fall.

Which is why a windfall-profits tax is both mistaken economically and unjust ethically. A bold claim, I hear you say. But as it happens, with help from an old friend and colleague, Philip Lawler, I wrote a classic article on the Case against a Windfall Profits Tax thirty-three years ago. Originally I “ghosted it” for the U.S. Treasury Secretary, William Simon, who a few years later gave me permission to publish it under my own name which I have now done in National Review and the Spectator Online.

Immediately on entering office in 1981, Ronald Reagan blew away a  ramshackle maze of overlapping agencies and bureaucratic bafflegab; de-controlled energy prices and production; and led the world into a sustained three-decade boom floating on a sea of cheap oil and gas. It looks as if the Brits have decided to go in the opposite direction—and if Labour wins in 2024, with their foot on the accelerator.

Biden's Blame Shifting Comes for Big Oil

Despite being cagey about the topic on the campaign trail, Joe Biden went all in on environmentalism immediately upon entering the White House. Desperate for the approval of the climate crowd, the president killed the Keystone XL pipeline project on his first day in office, rejoined the Paris Climate Agreement, and enacted a moratorium on oil and gas leases on federal land, all to squeals of delight from environmental activists worldwide.

Fast forward a few months and we're in an energy crisis. Now, Biden's green policies aren't solely to blame -- these are complex problems, and pandemic-related disruptions (which can themselves be blamed on the government, at least in part) are probably the bigger culprit. Still, they're making recovery harder than it needs to be.

What's more, it's no coincidence that the rising cost of fuel -- currently at a seven-year high, and expected to keep climbing -- tracks very closely with the president's tanking poll numbers. That collapse at the polls contributed to one Democratic candidate losing the Virginia gubernatorial race and another nearly losing in deep-blue New Jersey, and in the wake of those warning shots Biden's partisans have really started to panic. If things keep on this trajectory, next year's midterm elections are going to be devastating for their party, making the 2010 midterms, which saw the GOP pick up seven senate seats and 63 in the House, pale in comparison. At least in 2010, Barrack Obama was personally popular, even if his agenda was not. Joe Biden has neither going for him.

So Biden is desperate to turn things around. A month ago that meant begging resource companies to lower prices.

That didn't work -- shocker -- because that's not how markets work. So his administration has changed tactics. Their new plan is to open an investigation into the oil and gas industry for "anti-consumer behavior."

President Biden is asking the head of the Federal Trade Commission (FTC) to look into whether oil companies are illegally increasing prices as consumers face high costs at the pump. "The Federal Trade Commission has authority to consider whether illegal conduct is costing families at the pump. I believe you should do so immediately," Biden wrote in a letter to FTC Chairwoman Lina Khan on Wednesday.

As Luke Thompson put it, "This is vintage Biden. Create a problem. Blame others. Then try to demagogue the issue to avoid accountability." "Fortunately," Thompson continues, "his polling suggests Americans see what’s happening."

The truth is, the Biden administration's environmental actions fall neatly into the very category of "anti-consumer behavior" he's accusing the resource sector of engaging in. We'd be better off if he would change course, open the taps, build the pipelines, grant the leases. That is, steer the ship of state back towards energy independence, and not fret so much about what AOC and the Green New Dealers have to say. (By the way, they're likely popping champagne at the moment, as they did mid-pandemic when the price of oil went negative, a blow from which the industry is still recovering).

But chances are he'll just keep looking to shift the blame.

Biden's Line 5 Fecklessness is No Laughing Matter

Looked at from a certain angle, there's a delicious irony to the worldwide energy crisis going on while the world's leaders gather in Scotland to celebrate the ongoing energy transition which is, you know, the cause of the crisis. Europe's transition to so-called renewable energy hit the world's most predictable snag when the North Sea's wind stopped blowing and the wind turbines stopped turning, leading to an explosion in energy prices. The situation in Europe (plus the intransigence of OPEC) is having knock-on effects in the American market as well, but those have been exacerbated by the fecklessness of the Biden administration, whose policies -- from the Keystone XL cancelation to the oil and gas leasing ban -- have helped transform the U.S., in record time, from a net energy exporter to a nation facing shortages and sky-rocketing rates.

Ironic and amusing, but also scary. Our leaders have made no attempt at course correction, even as it becomes increasingly clear that they're building our foundation on sand. To stick with the domestic situation for a moment, even reliably leftist organs have begun to say that last week's loss in the Virginia gubernatorial race and near-loss in the race in New Jersey signal widespread voter discontent with their radicalism. Biden ran as the Return-to-Normalcy candidate, and a majority of Americans were happy to vote for that. But when he got to the White House he began to govern like the love child of White Fragility author Robin DiAngelo and enviro-truant Greta Thunberg, embracing policies he didn't run on and Americans don't want.

Even so, Sleepy Joe doesn't look like he's backing down. Take the drama surrounding Enbridge Line 5, for example. Regular Pipeline readers know all about Line 5 -- it's a pipeline which carries 540,000 barrels of Canadian petroleum products per day from Alberta to Ontario by way of Michigan, where governor Gretchen Whitmer and her environmentalist cronies are trying to shut it down. That would be a catastrophe for Ontario and Quebec, immediately costing the provinces tens of thousands of jobs and cutting off a major oil and gas artery to some of the coldest parts of populated Canada. The U.S. wouldn't fair so well either -- half of the propane used in Michigan is transported through Line 5, and much of the oil and gas that ends up in Ohio and Pennsylvania as well.

Naturally, the anti-energy Biden Administration is openly flirting with the idea of giving Whitmer what she wants:

White House deputy press secretary Karine Jean-Pierre confirmed the administration is considering shutting down [Line 5], as President Biden finds himself caught between an environmental promise and looming gas price hikes. The administration is exploring the possibility of terminating the Line 5 pipeline... and gathering data to determine if shutting down the line will cause a surge in fuel pricing. 'Yes, we are,' Jean-Pierre said, asked in a news briefing if the administration is 'studying' the impacts of a potential shutdown.

They're "gathering data to determine" if this will cause a surge in fuel prices? An Intro to Economics textbook should contain all the data they need. And, failing that, the evidence of the past ten months or so.

Asked about the consumer costs associated with shutting down Line 5, and their anti-resource policies generally, Biden's Canadian-born energy secretary Jennifer Granholm laughed and  proclaimed that energy prices are going to spike no matter what they do. "Yeah, this is going to happen. It will be more expensive this year than last year," Granholm told CNN. It's as if they haven't considered how bad this can actually get.

It's all one big joke to them:

 

The Real Energy Crisis

Instead of handing out treats for Halloween on October 31, the Biden Administration and the green industrial complex supporting it are lining up the tricks to commit America to a green future that looks bleak, and promises more hardship here, particularly for seniors and the poor, just as in Europe.

Even the climate-cheerleading The Economist nods to reality.

The switch from coal to renewable energy has left Europe, and especially Britain, vulnerable to a natural-gas supply panic that at one point this week had sent spot prices up by over 60 percent. …[M]ake no mistake, the deeper forces behind the shortage economy are not going away and politicians could easily end up with dangerously wrong-headed policies. … [G]overnments… may have to meet shortages by relaxing emissions targets and lurching back to dirtier sources of energy. Governments will therefore have to plan carefully to cope with the higher energy costs and slower growth that will result from eliminating emissions. Pretending that decarbonisation will result in a miraculous economic boom is bound to lead to disappointment.

As a direct result of bad policy choices, this is the real “climate crisis.” We can only hope the Economist is correct about the possible political “backlash.” The question is whether that comes too late.

To the rescue?

With dire warning signs out of Europe over a feared cold winter amid record-low fossil fuel supplies due to green mandates, and a green energy infrastructure unable to meet demand, green-industrial complex voices are already pre-butting assignment of responsibility saying, whatever you do, blame “anything but the greens.”

Of course, if you’ve ever had, or even been, teenagers, you know that a chorus of voices piping up in early October that “December’s not my fault” is a good sign that December is their fault. During California’s 2020 rolling blackouts, Governor Gavin Newsome “pointed to California’s shift to renewable resources as part of the reason for the supply shortage. ‘Shutting down polluting gas power plants as created gaps in the state’s energy supply,’ he said.”  And while he is apparently still committed to a “green” future, Newsome said, “we cannot sacrifice reliability.” Too late.

Anyone truly surprised by the perils created by politicians has not been paying attention. Enron executives predicted this in 1999, as they organized and funded what has become the climate industry. One internal email noted, “more than any other U.S. corporation [Enron] has helped legitimize the case of apocalyptic climate change and today is carrying the Kyoto flag more than any other U.S. corporation.….” Another, however, acknowledged that this politicization of energy markets posed great systemic risks such as what we are seeing unfold today:

Maybe Enron can dodge the macro problem and have our micro benefits, but then again I have to think that a politicized international energy market for any reason will create as much or more downside than upside.

Although Enron is long gone, the harms visited on the U.S. and global economies by its agenda continue. And with climate activists embedded throughout the government in key energy and climate roles, there is even less regard at present for the need for public support or political legitimacy.

The Washington Post reports,

Environmental Protection Agency Administrator Michael Regan says he’s willing to wield broad regulatory power to enact President Biden’s climate agenda if Congress fails to pass meaningful climate legislation. Regan says his agency will issue a robust greenhouse gas rule for power plants, a stringent methane rule for oil and gas infrastructure, and sweeping emissions standards for new cars, regardless of Congress's actions.

Similarly, White House aide Gina McCarthy repeated the line from the Obama-Biden EPA when it comes to imposing the climate agenda: “The Biden administration will use its ‘regulatory authority’ to act on climate change if it can’t get Congress to” pass its desired legislative agenda.

Don't cross the Queens...

Massachusetts Attorney General Maura Healey even promised a Michael Bloomberg group that, if it gave her privately funded attorneys to be embedded in her office, she would use them to enforce “the long-term commitments set forth… in the Paris Agreement.” Those were supposedly voluntary, we were told, in order to keep the U.S. Senate from voting on the pact.

Those promises are about to be made more painful. On October 29, keep an eye on the D.C. Circuit Court of Appeals, where the Biden Environmental Protection Agency is expected to roll over in a sue-and-settle lawsuit, State of New York et al. v. EPA. In a filing due that day, EPA is likely to announce plans to issue new ozone National Air Ambient Quality Standards (NAAQS), seemingly obscure but in fact “Biden’s back door climate plan,” as the main vehicle to impose this “climate” agenda.

History suggests this also will re-run an Obama Year 1 move to obtain praise at and energize the Rome G20 meeting the next day, and climate pact talks in Glasgow beginning two days later. At both, Biden is expected to deepen President Obama’s GHG emission-reduction promises based on the Clean Power Plan, tossed out by the Supreme Court in West Virginia v. EPA.

None of these moves has popular support or political legitimacy. It will take until the end of Biden’s term to conclude their legality. History also shows that is enough time to destroy communities as industry redirects investment decisions. Already we see, with the unfolding energy crisis, how these plans increase costs, and reduce energy security and reliability. That’s the real “climate crisis.”