Nationalize 'Big Oil'? Are You Crazy?

Since the Biden regime is busy reviving every bad idea from the late 1970s such as stagflation, the energy crisis, price controls, and weak foreign policy, it was inevitable that one of the worst ideas from that era is also trying to make a comeback: nationalizing “big oil.”

Back in the 1970s the proposal to nationalize the oil industry found support from some otherwise sober-minded figures such as Sen. Henry “Scoop” Jackson, while today the idea is being flogged mostly by predictably radical figures such as Bernie Sanders and Elizabeth Warren, and deep green climate alarmists, such as William S. Becker. But with President Joe Biden, surrounded in the White House by true believers in the climate mania, menacing the oil industry with demagogic charges of “profiteering,” it is not hard to see the idea gaining traction with the progressive left desperate to avoid electoral disaster in November.

And help us freeze to death.

Back in the 1970s, the premise behind nationalizing “big oil” was that the federal government could manage oil production better than private industry in the interest of consumers by stopping “profiteering” and smoothing out production epicycles. The proposal never got very far for the simple reason that most Americans didn’t think the same people who run the Post Office monopoly would be competent at running the oil industry. The record of foreign nations that have government-owned and run oil industries is pathetic. Consider for example the 75 percent decline of Venezuela’s oil production since Hugo Chavez expropriated private and foreign oil companies. The steady decline in production of Mexico’s ample oil reserves under Pemex finally prompted Mexico to open its oil industry to foreign private companies.

It is an unappreciated fact that over 90 percent of the world’s oil reserves are government-owned, rather than privately owned, and this contributes to instability in the long-wave oil price cycles. It is not the oil majors that manipulate oil for political reasons; it is governments. The world and the oil market would be better off if it privatized oil resources.

The argument today is quite different. Writing in The Hill, Becker deserves credit for being explicit: his purpose is nationalizing oil companies is to put them out of business: nationalizing the oil industry “would allow the government to manage the industry’s drawdown, a process the private sector is ignoring... The federal government typically nationalizes companies to save them. In this case, it must nationalize Big Oil to save us all from a future we don’t want.” Translation: the oil industry isn’t committing suicide fast enough to suit the environmental fundamentalists.

Windfall profits? What windfall profits?

To be sure, the major oil companies invited some of this with their ill-considered pledges to be “carbon-neutral” by 2050, no doubt thinking that the latest climate policy euphemism for “we don’t really mean it”—“net-zero emissions”—leaves plenty of wiggle room for creative emissions accounting. Rather than thinking they could appease the climate campaign with these virtue signals, they’d be better off straightforwardly defending their industry in the manner of Chris Wright, CEO of Liberty Oilfield Services. Wright argues: “If you look at the bigger picture, our industry causes a dime of damage to the world and a dollar of benefit. The benefits versus the costs are enormously larger.” Or the oil industry could simply cite all of the official international government forecasts that conclude that the planet will still depend substantially on oil, natural gas, and coal in 2050.

The plight of Europe since the outbreak of the Ukraine War shows the folly of suppressing our own oil and gas sector and making ourselves wholly dependent again on foreign suppliers to fill the gap when “green” energy inevitably falls short of its extravagant (and extravagantly expensive) promises. Europe is already looking for face-saving ways to back away from its sanctions against Russian oil and gas while cranking up coal power, the most hated energy source. Germany faces a non-trivial possibility of running out of natural gas next winter. Meanwhile President Biden is groveling cap-in-hand before the oil sheiks of the Middle East, who may be no more inclined than Putin to help out the person who the day before, in the case of Saudi Arabia, labeled them human rights monsters. It doesn’t take much imagination to realize how much worse off the U.S. would be if we forcibly shut down our own oil companies.

"Fracking Damages Our Beer." OK, then!

To the contrary of claims that the oil industry is reaping “obscene” profits, we should entertain the proposition that the industry needs much bigger profits. It is tedious, but necessary for the slow learners on the left, to repeat some elementary facts about the oil industry. Its profit margin is close to the average for all manufacturing companies (and less than half the profit margin for tech companies like Apple), and often sees its profit margin collapse in the regular epicycles of global oil prices. Given that the Biden Administration and woke Wall Street have been constricting the oil industry’s access to capital, the industry is more reliant than ever on generating internal capital—not only for continued exploration and production, but for the investment necessary to develop new technologies that actually mitigates emissions, such as carbon sequestration or carbon air capture.

The oil majors, especially ExxonMobil and Chevron, did push back politely against Biden’s oil demagoguery. Chevron was the most candid: “Unfortunately, what we have seen since January 2021 are policies that send a message that the Administration aims to impose obstacles to our industry delivering energy resources the world needs.” If they really want to make progressive heads explode, they should follow up with the argument that they need larger profits.

'Green Energy'? Let's Do the Math

Rather than argue climate politics and ideology, let’s look at math, the language of the universe. Americans own approximately 270 million private gasoline vehicles (GVs) and drive 3.2 trillion miles per year, consuming 123 billion gallons of gasoline.  Why? Because we want to. Because we (still) are free to do what and go as and where we want. Democrats don’t like this. They prefer that we little people live in little boxes wedged-in with a hundred other little boxes, next to the (subsidized) light rail and the (un-air-conditioned) workplace and the (un-air-conditioned) grocery store selling bugs instead of food.

President Brandon read from his teleprompter that he wants to build 500,000 EV charging stations. By comparison, our 279 million GVs require only 115,000 “charging” (gas) stations. “Charging” a GV for the next 400 miles takes about 10 minutes. Absent fast chargers, charging an EV for the next 400 miles can take up to eight hours.  Spending less time per person charging requires having more stations – about four times more. How much CO2 will be expelled into the atmosphere to build this costly infrastructure? As with windmills, arguably more than using them will reduce.

America generates annually, using 99 percent traditional power sources (hydro, coal, oil, natural gas, uranium) about four trillion kilowatt hours (Kwh) of electricity to power our grid and run our homes, offices, stores, internet, etc. NOT in charging 270 million EVs. The additional one percent of electricity generation comes from small-scale solar. The EPA has created a metric, “MPGe,” for EVs. An EV will use 33.7 Kwh of electricity to travel as far as a GV on one gallon of gasoline. Replacing 123 billion gallons of gasoline will require four trillion Kwh, or double what the nation generates and uses today. See the problem? California can’t even keep the lights on today.

Not as easy as it looks.

Let’s add physics to math. How does the electricity we use get to a charging station, whether commercial or at our home? Electrons – electricity – travel in the vacuum of free space at the speed of light, which is the speed of electromagnetic radiation, of which light is a frequency. This speed is three million meters, or about 186,272 miles, per second. Through wire here on earth the electrons travel more slowly, but the speed of the electrical charge moving through a wire is nearly the same as in free space.

The transmission wires from a power plant to an outlet are not batteries; no charge is “held” in them to be used when turning on a light switch or plugging in an EV. The instant the switch is flipped to charge an EV and apply that load to the circuit, that electrical charge is created by releasing water at the dam, burning coal, natural gas or oil, or using the heat of fission at a nuclear plant.

What’s the point? If 270 million cars are sitting at home plugged-in overnight for their change, how much sun is shining? How much wind is blowing? None, and not much. As noted previously, the planet lacks the elements and minerals, and certainly the mining capacity, to create the amount of battery storage required to store all the energy hitting the earth daily from the sun to charge our vehicles overnight.

[A] rough conclusion is that getting all of our electricity from wind, solar and batteries would consume around 70 percent of all of the copper currently mined in the world, 337 percent of global nickel production, 3,053 percent of the world’s total cobalt production, 355 percent of the U.S.’s iron output, and 284 percent of U.S. steel production. Along with unfathomable quantities of concrete–which, by the way, off-gases CO2.

Plugging in the car, closing that circuit, requires that the electricity is created at that instant. Simply – this cannot happen with “sustainable” electricity generation and storage. It is mathematically impossible to replace America’s GVs with EVs and retain anything close to our rate of progress or standard of living. It also is culturally impossible; why do you think the elites have been attacking Western Culture?

Been around for thousands of years.

Economists talk about removing friction from the economy. Removing economic friction ostensibly is why we are going to (be forced to) go cashless, though the reality for that forcing may be entirely different. Moving to EVs will add friction to our everyday lives, to food and material consumption, to transportation, to the entire supply chain and the variety and quantities of goods and services we have come to expect and which all our jobs are designed to extract, produce, move, sell and dispose of. Removing friction aids progress; adding friction reduces progress.

Progress is the more productive use of natural and human resources, including energy. If we want to consume fewer resources, to use less energy, we need more progress...  and more electricity.

This seems to be a conundrum. Do we use less energy shopping online than going to a dozen stores around town on a Saturday? Sure. But do you know how much electricity the data centers hosting our online shopping used over a decade ago…?

In 2010, over 10 percent of electricity in the U.S. was due to computer and IT equipment usage…  assorted US data centers use a collective 7000 megawatts… ; this is more power than is used by the State of Mississippi.

We need electricity to create and maintain our standard of living, to continue to progress. “Sustainable” energy cannot replace hydro, fossil and nuclear, let alone double it. We can neither sustain our current standard of living nor advance it without more energy. This doesn’t factor-in the developing world’s need for more energy to achieve equity in living standards with the first world.

Can we generate the additional electricity we need to continue our current, and future-desired, standard of living? Of course. Can we do so and reduce the CO2 in the atmosphere (which may not be necessary at all, given that the CO2 levels have increased for years without warming)? Yes. How? Nuclear. No other generation capability can do so. Nuclear is such a good idea that even the founder of Greenpeace is all for it. It’s pretty hard to refer to him as an “anti-environmentalist.” But the left won’t allow nuclear, and our rulers don’t want us to have the freedom it provides.

Only way this works, greenies.

Friction – the Green Dream – is anti-progress. Which makes it anti-employment, anti-prosperity, anti-humanity, anti-liberty, anti-freedom, anti-natural resource and anti-future. The only people supporting adding this friction are those not understanding the ramifications, and those not having children so who do not care about the future. The former need to be educated and the latter ignored. The Green Dream is cultural and civilizational suicide. Because math.

Our elites know this. They aren’t stupid. The also aren’t replacing their motorcades with EVs, their seaside homes with inland apartments, and their steaks with bugs. Because they aren’t stupid. The Klimate Kult isn’t about the environment, the planet, the climate. It’s about control.

The Green Dream is about getting us in on the plot to destroy liberty and enable tyranny by brainwashing us to vote for our own demise. To destroy prosperity and spread poverty. To destroy the educated, productive middle class on which civilization depends.

Bernie Sanders may remark that we don’t need one thousand different kinds of deodorant that capitalism can provide and Marxism can’t, but I’m not at all sure I want a government that can’t win a war, can’t keep the homeless off the streets, can’t stop Capitol Cops from rioting against and murdering peaceful citizens, can’t stop BLM from burning down our cities and assassinating law enforcement officials, can’t stop meth and heroin junkies from shooting-up in the streets, can’t stop “teachers” from “teaching” 6-yr-olds how to masturbate, can’t stop pedophiles from attacking our children, can’t police our own border, can’t stop printing money to repair the damage from their last money-printing… telling me I can’t drive my GV to Yosemite or to a steak house.

Do you?

Practical Solutions to Pretend Problems

Let us assume, for the space of at least one column, that your not-so-humble correspondent agrees with the proposition that mankind’s increasing use of fossil fuels has released an unhealthy amount of heat trapping compounds into the atmosphere – primarily in the form of carbon dioxide.

People from Al Gore to Leonardo DiCaprio to Greta Thunberg cry that we are in the midst of a “climate crisis.” A few years ago AOC declared that we had only twelve years left to fix the “crisis” or else mankind was doomed. Just about every Democrat, and a disturbing number of Republicans, accept this point of view.

I don’t agree that we are in the midst of a “climate crisis,” along with millions of fellow scientists and a great many non-scientists. But let’s assume – for the sake of argument – that we’re all wrong. Let’s put aside our personal risk assessment and say that the “climate crisis” is real, that the world is in grave danger and that if we don’t do something to reduce carbon dioxide emissions substantially and immediately, there will be hell to pay. How would we react?

Apocalypse soon. Maybe. Some day.

If this is truly a “crisis”, shouldn’t we be doing everything possible to solve it? If a fire breaks out in your home, you do everything you can to put it out as quickly as possible. You grab a fire extinguisher. You turn on a garden hose. You use a rug to smother the flames. Etc.

You don’t do nothing. Sure, you can call the fire department, but if there are actual things you can do to mitigate the damage before firefighters arrive, without putting your life in danger, you do them. Using the fire extinguisher, or garden hose, or rug might result in some property damage that you will have to clean up later, but so what? Better cleaning up a mess than rebuilding your home once it’s a charred pile of rubble.

Were the climate crisis as bad as Al, Leo, Greta et al. assure us it is, wouldn’t you think they would do anything and everything to combat it? There a lot of actions individuals can take and a lot of programs that politicians can advocate that could have and still can make massive reductions in fossil fuel use. They are easy and unlike most actions that "climate change" alarmists demand of us, they are not costly to average citizens.

You rarely, if ever, hear about these alternatives in the Mainstream Media or among politicians who buy into the “climate crisis” narrative. The universal message on the Left (and all messages on the Left these days are universal – dissenters will be cancelled) is that all energy generation moving forward must be “renewable” and thus “sustainable." Practical and achievable are not features at issue.

Their formula involves a mix of wind power, which is unreliable; solar power, which is spectacularly unreliable outside of a very limited number of locations; and large-scale battery-storage, which has moved from the realm of “insanely impractical and expensive” to “crazily unreasonable and costly” after decades of research.

Not there when you need it.

Maybe there are other things we could do that could meaningfully reduce carbon dioxide emissions? Maybe some of those things are a lot less expensive than the windmill-solar -battery approach? Maybe they’re even practical? Let’s consider a couple of practical actions that alarmists could have and still can advocate if they truly believe that the “climate crisis” is real.

Like most of my fellow boomers, I grew up without air conditioning. Yes, those 100 + degree days in July and August sucked, but we got through them. People can deal with heat. If every member of the Sierra Club, every liberal celebrity and every Democrat pledged never to use air conditioning again, the savings in energy and the reduction in carbon dioxide emissions in the United States would be huge. So, why aren’t they taking this hit to save the planet?

In general, most fossil fuel generated power is produced using one of two thermodynamic “cycles”: the Rankine Cycle, which uses the heat generated by combustion of a fossil fuel to turn water into steam, which then spins a turbine to generate power, and the Brayton Cycle, which uses the expansion of gas to directly spin a turbine to generate power.

A boiler uses the Rankine Cycle. Burning a fuel such as coal or natural gas creates heat. That heat is transferred to pipes through which flows liquid water. The liquid water is vaporized to steam, under pressure. The steam then carries enough energy to spin a turbine that produces power.

Gas turbines, like jet engines, use the Brayton Cycle. Burning a fuel such as natural gas or kerosene makes the fuel expand in volume significantly. This expansion produces enough energy to directly spin a turbine that generates energy.

Kids today...

Both the Rankine Cycle and the Brayton Cycle are about 30 -35 percent efficient. That is, for every 100 units of energy you put into the system, you get about 1/3 the energy back in the form of useful power. But, that math changes when you combine the two cycles. There are plants in the U.S. that burn natural gas to generate power through the Brayton Cycle, and then use the heat of the expanded gases to spin a turbine generator. This heat is used to generate steam from liquid water, which spins another turbine, effectively taking advantage of the Rankine Cycle.

A plant that uses a the Brayton Cycle to spin a turbine directly and the Rankine Cycle to spin a steam turbine is called a “combined-cycle plant.” This type of plant is about twice as efficient as any other type of fossil-fueled power plant. An administration that seriously wanted to reduce domestic fossil fuel use would have subsidized and advanced reliable combined-cycle power plants rather than shoving unreliable, expensive, “sustainable” forms of power generation like wind and solar down our throats.

But, we know that the “Climate Crisis” charlatans are not even close to serious about their messaging. If they were, they would have introduced the two simple concepts above into the discussion. If they were, they would have also talked about the roles of Red China and nuclear power in any energy discussion—ideas we’ll discuss in a future column.

New Sino-Russian Pact Threatens U.S.

Two weeks ago, just as Russia began positioning troops on Ukraine’s border, Russia and China announced an historic accord between the two countries that caught many in D.C. entirely off guard. Their surprise was rooted in the specificity and scope of the accord. This “red-on-red” alliance should be alarming… a warning shot of sorts that should it be disregarded will prove a profound threat to America’s energy security, economic stability, and geo-political dominance.

China and Russia on the opening day of the Winter Olympics declared a "no limits" partnership, backing each other over standoffs on Ukraine and Taiwan with a promise to collaborate more against the West. President Xi Jinping hosted President Vladimir Putin on Friday as the two nations said their relationship was superior to any Cold War era alliance and they would work together on space, climate change, artificial intelligence and control of the internet.

Beijing supported Russia's demand that Ukraine should not be admitted into NATO, as the Kremlin amasses 100,000 troops near its neighbour, while Moscow opposed any form of independence for Taiwan, as global powers jostle over their spheres of influence. "Friendship between the two States has no limits, there are no 'forbidden' areas of cooperation," the two countries said in a joint statement.

U.S. energy producers warned American consumers about such implications during the 2020 election cycle. With the pressures of Covid beginning to bear down on the U.S. economy back then, it was clear that deconstructing the U.S.’s energy sector through pipeline closures, the reduction of federal leases and the defunding of investment capital would have deleterious impact on the larger economy. Industry leaders warned at the time that policies increasing America’s dependence on foreign sources of oil would unnecessarily and consequentially compromise national security. Inexpensive, domestically produced energy is after all the ultimate insurance against geopolitical threats like those currently unfolding in the Ukraine and from Red China's seeking to reach across the South China Sea to overtake Taiwan.

But what if discord in Ukraine is not the ultimate aim? According to sources inside China, Putin’s military movement against Ukraine is a produced event financed by Xi, as part of the accord just signed by the two Communist nations. Putin’s incursion is the distraction the Chinese had hoped the Biden administration would zealously embrace, leaving China, the actual threat to America, unattended as it eyes Taiwan.

The Biden administration’s “deer in the headlights” diplomacy in defense of Ukraine’s non-democratic government reveals the lengths to which its ideological bias toward wind and solar energy sources supersedes its concerns for the economic health, physical security, and geo-political dominance of America. The administration is framing Putin as the scapegoat for rising U.S. energy prices that continue increasing due to Biden’s own energy policies. Higher gas prices, after all are an objective this administration actively seeks with the hope of moving people from fossil-fuel powered vehicles into public transport or electric vehicles. Had Biden not attacked the U.S. energy sector beginning on his first day in office he would not now need to vilify Putin over a territorial disagreement that doesn't authentically involve the U.S.. Putin and Xi understand these dynamics and are happy to collaborate. The forging of the alliance between their two  nations was inevitable in the face of such a weak U.S. president and cabinet, promulgating policies that unequivocally fail to project strength.

I'm thinking, I'm thinking...

After examining the newly signed Sino-Russian agreements, one begins to understand how central energy policy is to the broader stability of Western Europe and United States. It reveals how the energy policy of the Biden administration has fundamentally weakened the U.S. and emboldened our enemies. The consequence of their weakness, however, doesn’t stop at the gas pump. The economic, military and political implications this collaboration portends, ultimately has more to do with the desire of both Putin and Xi to gain territorial dominance in their respective regions of influence than it does with the price of a barrel of crude.

The China-Russian collaboration consists of a series of agreements, fifteen by some accounts. Together, the agreements deepen cooperation between the two Communist countries in the areas of sports, energy, commerce, and trade. Doped athletes aside, the reality is the agreements signify an important convergence of two geo-political adversaries both of whom seek to neutralize the U.S. as a global leader and move away from the U.S. dollar as a reserve currency. The agreements include significant plans to collaborate in key areas relating to energy, but only insofar as the collaboration sets the stage for much more aggressive aims in the Asia Pacific region while protecting against the effects of international sanctions both countries anticipate. Consider some of the key components of the energy agreements:

Gazprom and China National Petroleum Corporation (CNPC) have agreed to increase the volume of Russian liquid natural gas delivered to China via the far Eastern route. Russia is already sending natural gas via pipeline to China through the Power of Siberia trunk line, which became operational at the end of 2019. New lines will increase capacity and connect Russian supply lines to the Dalian LNG terminal in the south.

The Dalian terminal is an LNG terminal in Liaoning, province. Operational since 2011, it is currently used to offload product primarily from Qatar, Australia and Iran. After regasification, the gas has been being sent to northeastern China. Under the new collaboration, China and Russia will purportedly co-own the ports at Dalian and Luschun. China has additionally increased its strategic reserve capacity by as much as 30 percent, according to sources. Establishing long-term supply certainty in the face of international sanctions limits the West’s ability to dissuade China as it seeks to retake Taiwan and continues its Belt and Road initiative in Africa and South America. Russia meanwhile gets access to two ice-free ports from which it can operate as it sets out to achieve a variety of geo-political objectives that include dominating the Pacific region militarily. According to Reuters, the new pipeline network is expected to be operational within three years and will be settled in euros.

What's Plan B?

In response to the incursion in Ukraine and the new Sino-Russian accord, the Biden administration should immediately turn toward U.S. energy producers and seek their cooperation to re-start production of their portfolios of assets and remove all impediments to re-establishing energy independence. Simultaneously, attention must urgently be paid to China so as to impede its plans to subjugate Taiwan. While Putin flexes his geo-political muscle in Ukraine, China must be made to understand that the same will not be permitted where Taiwan is concerned. Unanswered, this nuclear and biologically weaponized power couple represents a new and potentially ominous threat to the U.S. and all western democracies.

Biden Blows Up Yet Another Gas Pipeline

Are you baffled by an administration which, to take just one example, adopts an open border policy at home while mouthing platitudes about the sanctity of borders regarding Russian incursions in Ukraine? There’s an easy answer: its policy is to strengthen the hand and fill the pockets of  those who oppose and wish to weaken us at every turn while harming the interests of American citizens and our allies abroad.

Take seven-billion-dollar Eastern Mediterranean Gas Pipeline. In August of 2020 I reported how the Greeks, Cypriots, and Israelis  had coordinated plans for a 1,200-mile undersea pipeline connecting Israeli and Cypriot gas fields to Greece and then to Europe. This is a huge, expensive project in which, following on the Abraham Accords engineered by then-President Trump, the United Arab Emirates has a substantial interest, including a 22 percent stake in the large Israeli Tamar gas field.

President Trump  supported the pipeline. But President Biden, in a “non -paper” (an unofficial communication), has notified the Greek government that we are no longer supporting the project, allegedly because it posed a security threat to the region. Except, of course, when Russia wanted waivers to build Nord Stream 2,  a non-green gas pipeline to Europe, it had no such qualms.

The Eastern Mediterranean pipeline would have benefitted our allies Greece, Cyprus, Israel and the UAE. It would as well, have provided desperately needed future  energy supplies to Western Europe which has been engaged in suicidal green policies. As a result, Western Europe at the moment faces a cold winter with insufficient energy, predictable shortages, higher prices, and potentially disastrous economic consequences, including manufacturing shutdowns.

It is hard to sympathize with a Europe whose leaders have made their lack of natural energy sources like coal and oil worse by adopting explicit anti-energy policies. Its governments have banned hydraulic shale fracturing of which it does have substantial amounts of technically recoverable shale gas. Coal-rich Germany has made itself dependent on outside sources of energy, primarily Russian gas, shutting down three nuclear plants and planning to mothball three more this year. It has allowed LNG import terminals to be snarled in permitting delays, cutting off another possible source.

But even if you have little sympathy for our allies on this score, the withdrawal of support for the pipeline will harm U.S. interests. If we wish to discourage Russian incursions into Ukraine, we are hamstrung by Europe’s dependence on Russian gas (about 40 percent of imports at present) and certain to rise. To tighten the screws, Russia has the capacity to inflict great damage by instituting a gas embargo or simply reducing gas supplies, reducing Europe to dependency. Additionally. Russia has had a large hand in fueling the "green" opposition to energy in western Europe.

Russia is not the only beneficiary of this volte face on the pipeline. Turkish president Recep Tayyip Erdogan sought to undermine the project from its inception because he gets no benefit from it. Why shouldn’t this latest Biden administration blunder give him more reason to crow?

E.U. Commission: Nukes and Natural Gas are Now 'Green'

Well this is a pleasant surprise: the European Commission -- the executive committee of the European Union -- has decided to propose a plan reclassifying natural gas and nuclear power as "green energy," at least for the sake of investment. From Reuters:

The Commission's proposal would label nuclear power plant investments as green if the project has a plan, funds and a site to safely dispose of radioactive waste. To be deemed green, new nuclear plants must receive construction permits before 2045. Investments in natural gas power plants would also be deemed green if they produce emissions below 270g of CO2 equivalent per kilowatt hour (kWh), replace a more polluting fossil fuel plant, receive a construction permit by Dec. 31 2030 and plan to switch to low-carbon gases by the end of 2035.

The background to this is, of course, Europe's ongoing energy crunch, which has seen record prices per megawatt hour in countries throughout the continent, as wind turbines and solar panels have failed to produce enough electricity to meet winter demand. Germany, which famously went all in on its green energy transition known as die Energiewende roughly a decade ago, has been forced to restart some of its closed, carbon intensive coal-fired power plants to keep up.

And it isn't as if they're actually lying about this -- as much as green activists hate to admit it, the United States has led the world in emissions reduction since the year 2000, largely because the fracking revolution has allowed us to increasingly lean on low-carbon natural gas for our heat and energy needs. Nuclear power, meanwhile, is effectively a zero-carbon power source. Consequently, if you're actually concerned about carbon emissions, natural gas and nuclear should be high up in your proposed power mix. They are as "green" as any first world nation's energy is going get.

Even so, it is worth noting the EC tries to stress that they're not proposing a permanent shift -- "[T]he Commission considers there is a role for natural gas and nuclear as a means to facilitate the transition towards a predominantly renewable-based future," according to their statement. That is to say, they consider natural gas and nuclear as "transitional" energy sources whose role is to bridge the gap to their still-inevitable wind-and-solar powered future! Moreover Germany, which still has the largest economy in the E.U., remains fanatically committed to its Energiewende, to such a degree that they've just closed down three of their remaining six operational nuclear power plants, their soaring energy rates notwithstanding. Theoretically, Germany could lead a charge to kill this sensible proposal in the European Parliament, over the objections of France and other nations who have relied on nuclear for decades.

Still, let's focus on the bright side -- Europe's governing class is cracking under the pressure of sky-high energy rates and are being forced to admit that their current way of doing things just isn't working. If this reclassification actually goes through, activists will have a real fight on their hands when they try to change it back in a few years time. And officially classifying natural gas and nuclear as green energy is likely to take so much wind out of the green movement's turbines that it could eventually cease to exist.

Reality Bites the Green Movement

Thomas Friedman had a very strange column -- even for him! -- in the New York Times recently entitled “A Scary Energy Winter Is Coming. Don’t Blame the Greens.” The headline captures pretty well what Friedman obviously wanted to say, namely that the exploding energy prices we are already beginning to see, and the shortages that Europe, especially, is bracing for, are not the fault of the environmentalist movement. But Friedman seemed to struggle making any kind of a case to that effect. Perhaps that's because there is none -- environmentalism really is at the heart of the matter, if not the whole of it. So he just sort of talks around the problem, and his ramblings are ultimately rather revelatory.

Friedman begins by fretting that the mounting crisis will, 1- "[M]ake Vladimir Putin the king of Europe," 2- Empower Iran to build atomic weapons, and 3- (apparently worst of all) cause blackouts in the U.K. during the upcoming U.N. climate conference in Glasgow, embarrassing the all-in-on-wind government of Boris Johnson. Friedman is very aware of how bad things are shaping up to be:

Natural gas and coal prices in Europe and Asia just hit their highest levels on record, oil prices in America hit a seven-year high, and U.S. gasoline prices are up $1 a gallon from last year.

He's concerned about predictions that this might be an especially brutal winter, and quotes with alarm a recent newsletter by market analyst Bill Blain who said simply, “This winter [in Great Britain and Europe] people are going to die of cold." But then Friedman articulates the thought which seems to central to his foreboding: If these concerns are realized, he says, "I fear we’ll see a populist backlash to the whole climate/green movement."

I'm glad he's got his priorities straight.

Tom Friedman, green as ever.

This type of thinking is so typical of the environmentalist approach to the real world problems that arise from the relentless pursuit of their ideological goals. Governments around the world have been giving way to their pressure for years, mandating the transition to unreliable energy sources and creating increasingly onerous regulatory hurdles the traditional resource industry must meet.

But then the wind stopped blowing and the sun didn't shine enough and scaled-back production meant the oil and gas companies didn't have enough product in storage. At which point Friedman & Co. say, not 'We screwed up,' but 'The populists are going to say we screwed up!' It's never the Green movement's fault.

Now, perhaps I'm being unfair to Friedman -- he does suggest that developed nations have attempted to transition to renewables too quickly, and criticizes the clearly foolish decision of the Merkel government in Germany to shut down all of its nuclear power plants by next year ("an overreaction to the Fukushima nuclear accident," he explains). Even so, his solution to the current problem includes "a carbon tax in every major industrial economy" and using nuclear power and natural gas as a bridge to wind and solar power. Sounds like just more of the same to me.

The Coming Energy Crisis This Winter

If you're a regular reader of The Pipeline, you already know about the ongoing energy crunch going on in Europe. If you're not a regular reader, well, you're going to find out about it soon, because looks like come winter, things are going to get rough worldwide.

For an ominous read on the scope of this crisis, check out this Bloomberg piece by Stephen Stapczynski entitled, "Europe’s Energy Crisis Is Coming for the Rest of the World, Too." Stapczynski discusses the fact that, even as so-called "renewable" energy sources get all of the headlines and government investment, the world actually relies on natural gas more than ever. "But," he says:

[T]here isn’t enough gas to fuel the post-pandemic recovery and refill depleted stocks before the cold months.... Inventories at European storage facilities are at historically low levels for this time of year. Pipeline flows from Russia and Norway have been limited. That’s worrying as calmer weather has reduced output from wind turbines... making gas even more necessary. No wonder European gas prices surged by almost 500% in the past year and are trading near record.

Utilities and policymakers are praying for mild temperatures because it’s already too late to boost supplies. The prospect of accelerating energy costs, in conjunction with squeezed supply chains and food prices at decade highs, could make more central bankers question whether the jump in inflation is as transitory as they’d hoped.... “If the winter is actually cold, my concern is we will not have enough gas for use for heating in parts of Europe,” [said] Amos Hochstein, the U.S. State Department’s senior adviser for energy security.

The effects of this shortage go far beyond heating and energy bills. The rising cost of doing business has, for instance, caused fertilizer producers in Europe to scale back production, "threatening to increase costs for farmers and potentially adding to global food inflation." Forecasts suggest a similar scale back for Chinese factories, leading especially to an increase in "global prices for steel and aluminum." Political ramifications have already arrived in Pakistan, where "opposition politicians [are] demanding an inquiry into [natural gas] purchases by the state-owned importer. And of course, countries have started to bridge the natural gas gap with dirtier fuels, most especially coal and heating oil, both affecting their markets and jeopardizing the climate commitments (many of them legally binding) of nations around the world. Stapczynski helpfully mentions that natural gas "emits about half as much carbon dioxide as coal when burned," a fact which most readers will likely never have seen mentioned in a mainstream publication.

Despite being an energy powerhouse over the past few years, the United States is not immune to these forces. Stapczynski points out that American exporters are an important part in the global natural gas supply chain -- they're "poised to ship more LNG than ever as new projects come online toward the end of the year." But years of anti-fracking public policy, including the war on pipelines and ban on leases on federal land enacted by the current administration, have left us in a weakened position. Our own inventories are depleted, and Stapczynski suggests that shale drillers "are reluctant to boost production out of concern that would crimp their profitability and put off investors." Sure, but political uncertainty is also a major driver -- why pump money into ramping up your production when the Biden administration might kneecap your operation in six months time?

Of course, Green Energy advocates will crow that this just proves how essential their products are -- they already are -- but they're wrong. In fact, we are reaping what they have sown.

Keep that in mind come winter.

Heinrich's New Mexican Boondoggle

Earlier this summer Senator Martin Heinrich (D-N.M.), one of the most ardent environmentalists in national politics, wrote a typically brainless Op-Ed in the New York Times on electrification and the push for net-zero in the Democrats' multi-trillion dollar infrastructure bill. Over at Capital Matters, Paul Gessing of the Rio Grande Foundation does us all a favor by thoroughly demolishing it.

Gessing opens with an important clarification --

Unfortunately, in Heinrich’s parlance, “electrification” does not mean bringing much-needed electricity to impoverished corners of our country, including the Navajo Reservation right here in New Mexico. No, the legislation he’s pushing in Congress — and the funding he’s advocating in the infrastructure bill, specifically — do nothing of the sort. By “electrification,” the senator means that he’d like federal, state, and local governments to phase out or completely ban your natural-gas stove, oven, and furnace, thus requiring you to use electric heat and stoves.

Which is partly to say that the bill itself is almost the antithesis of an infrastructure bill. Instead of putting government money towards what were once called "internal improvements" with the goal of raising the standard of living and improving economic conditions in neglected parts of the country, this bill ignores those forgotten places while seeking to lower standards of living and weigh down the economies across the board. This is what the Left calls "equity."

Gessing points out that, until a few years ago, environmentalist groups such as the Sierra Club actually supported natural gas, due to its cleanliness compared to coal. He mentions that Barack Obama even touted its potential for reducing atmospheric CO2. But now major American cities like Sacramento, Seattle, and New York have begun the process of banning natural gas in new construction.

The environmentalists had it right the first time. As regular Pipeline readers know, the United States has led the world in carbon emissions reduction since the year 2000.  Senator Heinrich and his allies, meanwhile, imagine that it can be entirely replaced with electricity generated by so-called renewable resources. That would be quite the trick, considering the fact that only about "10 percent of current electricity production comes from wind, solar, and geothermal combined" while this proposed transition "would increase U.S. electricity consumption by 40 percent." No surprise that Germany's attempted wind and solar transition has resulted in an increased reliance on coal, not to mention skyrocketing energy rates.

It's worth noting that the politicians pushing these policies are often working against the interests and preferences of the citizenry. The majority of people even in liberal cities want natural gas because it is "clean, affordable, and reliable energy," in Gessing's phrase. And Heinrich's home state of New Mexico is a major natural gas producer -- his own constituents would suffer if his preferred policies were fully enacted! In saner times, the residents of these communities would simply vote the bums out, but nowadays extreme partisanship protects activists masquerading as representatives.

It's quite the boondoggle. Just like Senator Heinrich's electrification proposals.

PennEast Pipeline Beats New Jersey at SCOTUS

Legal eagles might find today's Supreme Court decision, in PennEast Pipeline Co. v. New Jersey, compelling, contending as it does with a tension between the exercise of eminent domain on the one hand and a state's sovereign immunity as guaranteed by the 11th amendment on the other. For a layman like myself, one smart enough not to have attended law school, the discussion makes my eyes glaze over. However, the case might have some important ramifications in the ongoing dispute between the environmentalist movement and the oil and gas industry in the months and years ahead, and we would do well to be aware of it.

PennEast Pipeline Company LLC, a joint venture of energy producers including Enbridge Inc., South Jersey Industries Inc, and New Jersey Resources Corp, has been constructing a 116-mile pipeline that would transport as much as one billion cubic feet of natural gas per day from Pennsylvania's Marcellus Shale and serve customers in both Pennsylvania and New Jersey.

After having secured the Federal Energy Regulatory Commission's approval, the company began acquiring the land along the pipeline's planned route, making use, where necessary, of a provision in the U.S. Natural Gas Act which allow resource companies to utilize federal eminent domain authority. However, some of that land belonged to the state, and the administration of Governor Phil Murphy, a Democrat, refused to hand it over, contending that only privately owned land can be acquired in this way.

When PennEast took the state to court, the Murphy administration argued that the 11th amendment-guaranteed sovereign immunity protected it from being sued by a private entity. The majority, in an opinion written by Chief Justice Roberts (joined by Justices Breyer, Sotomayor, Alito, and Kavanaugh), disagreed, accepting PennEast's defense that their use of eminent domain flowed directly from the federal government.

Roberts argued that the right of the federal government to use eminent domain for the construction of essential infrastructure was well established, that there was nothing stopping it from delegating that power to a private company, and that "[a]lthough nonconsenting States are generally immune from suit, they surrendered their immunity from the exercise of the federal eminent domain power when they ratified the Constitution."

This doesn't mean that the pipeline will definitely be completed. As Greg Stohr points out in Bloomberg, PennEast "still must secure state-level permits, something that may prove difficult in [liberal] New Jersey." But this case is still has the potential to be significant, limiting as it does the ability of left-wing activists to kill major infrastructure projects they couldn't stop at the federal level simply by pumping money into local politics.

Will this precedent affect, for instance, Enbridge's other big pipeline project, which has seen Michigan holding all of eastern Canada hostage just to make a point? It's a hopeful sign.