The Coming Struggle to Stay Warm

One of the first columns I wrote for The Pipeline almost three years ago employed the metaphor of the irresistible force meeting the immovable object to forecast the likely consequences of Green politics. The irresistible force was the imposition of a policy of Net-Zero carbon emissions upon the populations of the West, in particular those of Anglosphere, and the immovable object was the democratic electorates of these countries.

It might take time, I argued, but when the voters found that Green Deals and such meant higher energy prices, higher taxes, immiseration of the less well-off, and harshly puritan lifestyles for the rest of us, an almighty smash-up would ensue.

And so it has. Indeed, the smash-up has come sooner than I expected, namely this year, and it will almost certainly be harsher because the negative impact of Net-Zero has been aggravated by the Russo-Ukraine war and sanctions adopted by the U.S. and the E.U. in response to it.

To stop train, pull handle. But think first.

What I didn’t expect, however, is that the smash-up would take place in slow-motion. But that is what’s happening.

Almost wherever you look, there’s some not-very-important story that tips you off to a subterranean explosion whose full impact won’t be properly felt for a while. The effect is something like the delayed impact of depth charges or deadpan jokes.

Here, for instance, is the London Daily Telegraph telling us that the Brits will be wearing new styles of underwear this winter—and not because they’re hoping for a more exotic sex-life:

Households are stockpiling thermal underwear to avoid turning on the heating this winter as energy bills spiral. John Lewis, Britain’s biggest department store chain, said shoppers had rushed to buy warmer clothes in recent weeks, with sales of winter thermals having doubled last week compared to a week earlier. Sales of dressing gowns are up 76pc compared to last year.

That’s the precautionary principle reduced to the bare essentials. Like everyone else in the northern hemisphere, ordinary Brits are expecting a chilly winter this year because of the following factors (which didn't start with Mr. Putin’s war); Like most Western governments, the U.K. powers-that-be have neglected to invest enough in energy security because they quite consciously preferred to invest in transitioning from fossil fuels to renewable forms of energy. That is the orthodoxy of Net-Zero (sometimes enforced by treaties) in E.U. countries such as Germany, non-E.U. countries like Britain, and the U.S.

It’s a massive enterprise because until recently fossil fuels provided more than 85 percent of total energy to even the most technically advanced economies. In pursuit of this vision of a future of all-renewable energy, Germany has shut down almost all its nuclear power stations, keeps equivocating over whether the shut down the few remaining ones, and ends up relying on “dirty coal” now that cheap Russian energy is as unreliable as "renewables."

California, dreaming...

Over the Pond the Biden administration has been refusing to license oil-and-gas explorations on federal land with the embarrassing result that it has to import oil from Venezuela. And the U.K. government too has banned “fracking” that would exploit the nation's plentiful reserves of natural gas. As a result almost all of these countries are facing the risk of energy shortfalls to the point at which energy “blackouts” and rationing are seriously entertained by utilities and regulators if the winter is severe. California too.

Moreover, the costs of transitioning to renewables are not only high, they are rising. The International Energy Agency has just revised its estimate of the investment needed to limit global temperatures to meet the Net-Zero target under the Paris Accords upwards. That will now rise from the 390 billion dollars annually today to 1.3 trillion dollars a year between now and 2030. If met, those targets would eliminate emissions from the energy sector by 2035 in the advanced world and by 2040 in developing countries. But they are unlikely to be met. On present trends Net-Zero won’t be achieved until 2060—and present trends look too optimistic in the light of the present energy crisis.

The upshot of which is that almost all the West’s governments face slightly different versions of two serious problems: uncertain energy supplies, and existing high indebtedness.

Take energy supplies first. Germany is facing a serious crisis of its fundamental economic model in the post-Ukraine world, Its two foundations were exporting cars to China and importing cheap energy from Russia. For the foreseeable future, neither now looks like a reliable prospect or even a possible one. Berlin must now struggle to replace the Russian energy half-forbidden by the sanctions it supports diplomatically.

Artifacts of an ancient civilization, if Greens get their way.

Similarly, because Britain neglected nuclear investment—its target of 25 percent of energy from nuclear power stations will be reached in 2050!—the country is heavily dependent on imported natural gas which it needs to solve the renewables’ “intermittency problem”: there are days when the wind doesn’t blow nor the sun shine. As Andrew Stuttaford points out, that makes the earlier decision of the U.K. government to close down its biggest natural gas storage capacity an especially shortsighted one. Even the French, who sensibly went nuclear in a big way in the 1970s, now have to spend on repairs and modernization.

What of the second aspect of the crisis: overspending? Two sorts of spending need to be financed here—that for Net-Zero, and that to finance the energy security national governments have neglected. Unfortunately, however necessary they are, they come on top of the massive sums of money that the same governments have already spent during the Covid-19 pandemic on locking down their economies and paying their people to stay at home. That backlog of indebtedness explains why the financial markets are becoming nervous of lending money to governments that don’t make financial responsibility their top priority. Interest rates are rising again in response to rising inflation, and that's a problem for governments that want to borrow money.

We saw that very recently when the British government fell because the markets thought it was adopting a cavalier attitude to debt. That impression was both exaggerated--the U.K.’s national debt as a percentage of GDP is one of the lowest in Europe--and largely the result of rash but trivial political misjudgments by ex-Prime Minister Liz Truss and her Chancellor Kwasi Kwarteng. All the same, the market brought them down because they were planning to add to an already high total of government spending.

Long johns, here we come.

When that happens, every spending program becomes the enemy of every other program. If restoring energy security becomes a priority for governments, then spending on Net-Zero will—and should—come under pressure. After all, Britain's short financial crisis became a political one in part because it was leading to a rise in mortgage payments. Like rising sales of warm thermal underwear, rising mortgage payments are another symptom of the price that the Brits will be paying for ill-judged energy policies. Voters' shoes are beginning to pinch; the immovable object is beginning to stiffen.

Of course, the irresistible force (in the form of support for Net-Zero from an alliance of the establishment and radical Green anarchists) has neither vanished nor much diminished. At almost every stage it has objected to policies that looked likely to prioritize energy security over the transition to renewables. With the arrival of a new prime minister, Rishi Sunak, it has been flexing its muscles to warn him that it will tolerate no lifting of the ban on fracking that the doomed Liz Truss tried to bring about. Net-Zero is an obstruction to restoring the energy security that it undermined in the first place. The circle closes.

My impression is that Sunak is taking his time to assess what Leonid Brezhnev used to call “the correlation of forces.” On the one hand, he has said that he will keep the ban on fracking unless evidence appears that suggests it is not dangerous to the environment; on the other, he has decided not to attend the U.N.’s COP 27 Climate Summit on the grounds that, in effect, he’s got more important things to do in London. My translation: he doesn’t want to attend and be trapped into making commitments on Net-Zero that might later be inconvenient to his overall energy and budgetary policies.

He may also think that Winter when the snow falls and Britain’s bedrooms freeze will be time also when the irresistible force of Net-Zero becomes much less irresistible and the immovable object of voter resistance much more resistant. And irremovable.

New Nukes, More Nukes, not No Nukes

The war in Ukraine created a new energy reality. Russian petrochemicals, including natural gas once bound for Europe, are now being sold to India, China and other customers in Asia. Offering discounts out of necessity, Russia has displaced 'gray market' Iranian and even Gulf oil in Asian countries. The distribution has rearranged the map of buyers and sellers, but there is little doubt that the market for petrochemicals has shrunk for a long time to come.

The world is reeling from the economic impact of steeply rising fuel costs but bureaucrats at the International Energy Agency (IEA) can scarcely contain their delight at the shortage of 'fossil fuels.' They hope to avoid any further investment in petroleum and meet the entire energy shortfall through increases in renewables. "Global fossil fuel use has grown alongside GDP since the start of the Industrial Revolution in the 18th century: putting this rise into reverse will be a pivotal moment in energy history... Today’s growth rates for deployment of solar PV, wind, EVs and batteries, if maintained, would lead to a much faster transformation than projected in the Stated Policies Scenario, although this would require supportive policies not just in the early leading markets for these technologies but across the world." In other words subsidies and incentives for renewables will still be needed to save the day.

First World problems.

Prominently missing from the IEA's list of preferred energy technologies is nuclear power, which despite a high regulatory cost burden that must be capitalized is nevertheless "cost competitive with renewable generation when capital cost is in the region of 2000-3000 ($/KW)." It is extremely reliable and insensitive to fluctuations in fuel costs because the fissile material is replenished so infrequently. Moreover the big reactors -- unlike renewables -- are 'load following', that is to say able to increase or decrease their output in response to the demands of the grid. Because they are so useful, planned nuclear power capacity worldwide will increase steadily with about 55 reactors under construction, mostly in the Asian region.

Nuclear power technology is also advancing steadily. "More than a dozen advanced reactor designs are in various stages of development." The most mainstream of the new designs are the Generation IVs. The Generation IV International Forum (GIF), initiated by the US Department of Energy in 2000, has 13 member countries (Argentina, Brazil, Canada, France, Japan, South Korea, South Africa, Switzerland, China, Russia, Australia, U.K., U.S.A.) plus Euratom jointly developing next generation nuclear technology. Six designs have been readied so far. They feature:

Perhaps the most exciting development is the availability of commercial small nuclear reactors, which are perhaps the most tested kind of all. Many hundreds of smaller power reactors have been built for naval use accumulating over 12,000 reactor years of experience. They are inherently safer. "This is largely due to their higher surface area to volume (and core heat) ratio compared with large units. It means that a lot of the engineering for safety including heat removal in large reactors is not needed in the small reactors." But their biggest advantage is they can be located—even airlifted—anywhere, even where the local grid is limited or nonexistent.

By contrast solar PV, wind, EVs and batteries require a smart grid to smooth out supply and demand. Solar farms built in North Africa, for example, need huge, kilometers-long undersea power cables to send electricity to overcast Europe. Called the EuroAfrica Interconnector, it will have 1000 MW capacity in the first stage, only equal to an average nuclear power plant. But unlike a nuclear power plant, which can be securely located near the user, a solar array in North Africa has to be secured along a long, vulnerable line of communications across national boundaries.

Given these factors, why aren't Green activists turning more to nuclear power to redress the energy crisis exacerbated by the Ukraine war? The counterintuitive reason is that cheap and reliable nuclear power would enable wasteful capitalist consumption and undo the Green agenda. Environmentalist Paul Ehrlich said in 1975:

In fact, giving society cheap, abundant energy at this point would be the moral equivalent of giving an idiot child a machine gun. With cheap, abundant energy, the attempt clearly would be made to pave, develop, industrialize, and exploit every last bit of the planet—a trend that would inevitably lead to a collapse of the life-support systems upon which civilization depends.

Cheap nuclear power would allow ordinary people, even in the Third World, to afford big screen TVs, game consoles, electric vehicles, lights, air conditioning, etc., all of which in the Leftist view would spell disaster.

The Catch-22 is that hardcore Greens prefers power to be expensive in order to cut consumption. As an op-ed in the Seattle Times put it: "High gas prices? They’re just what we need." The Green nightmare is billions of Africans living like Americans. The advantage of solar and wind over nuclear is it sets a hard limit on the lifestyle it will support. In that way Americans would live like Africans. As filmmaker Robert Stone put it: "as you provide societies with more energy it enables them to do more environmental destruction. The idea of tying us to the natural forces the wind and the sun was very appealing in that it would limit and constrain human development."

For the radical Greens, that's a good thing.

Who Blew Up the Nord Stream Pipelines?

The Nord Stream pipelines, which run under the Baltic Sea, have been severed by an explosion, causing huge amounts of natural gas to spill out into the ocean. That much is certain. Moreover, sabotage was the most likely cause. After all, one pipeline being breached by an explosion would be suspicious. But two? In three separate places? Especially with those pipelines being a bone of contention between major powers in the midst of a war? High unlikely.

And it isn't just the multiplying of coincidences -- according to Bloomberg, there is hard evidence that it was not an accident:

Germany suspects the damage to the Nord Stream pipeline system used to transport Russian gas to Europe was the result of sabotage. The evidence points to a violent act, rather than a technical issue, according to a German security official, who asked not to be identified because the matter is being probed. In response to the pipeline leaks in the Baltic Sea, Denmark is tightening security around energy assets.

So who is responsible? Early statements from Western leaders have pointed the finger at Russia, but it seems extremely unlikely that Vladimir Putin would order the destruction of his own pipeline. Especially since he has been using Nord Stream to remind German Chancellor Olaf Scholz of the cost to his country for the continuation of the war in Ukraine into the winter months. As this author wrote recently, the Russians have "cut down natural gas flows to Germany by 60 percent, blaming mechanical problems while ostentatiously burning $10 million worth of natural gas per day at the mouth of the Nord Stream pipeline rather than sending it to Germany."

Why would Putin cut off his own pressure point? And if not him, who? Tucker Carlson has a theory. Perhaps it was the Biden White House. It sounds crazy: could Biden, Carlson asks, and his merry band of environmentalists intentionally leak millions of gallons of liquid natural gas into the ocean, and from there into the atmosphere, when they are always going on about the horrible effects of gas on the environment?

At the same time, Carlson and his team have unearthed footage of President Biden and the State Department's Victoria Nuland (who always seems to be caught up in the affairs of Ukraine) assuring the American people that if Putin invades, than (in Biden's words) "there will be no longer a Nord Stream... We will bring an end to it."

Moreover, Carlson points to a tweet from Polish politician Radek Sikorski, who is overjoyed by this development and clearly thinks it has Biden's fingerprints on it.

Sikorski is a member of the neo-liberal Civic Platform party (which the Biden administration would love to see come back into power in Poland) and previously served as Minister of Foreign Affairs under Donald Tusk, who went onto become president of the European Union. He's also married to The Atlantic's Anne Applebaum, who Carlson rightly refers to as the liberal world order's "regime stenographer." All of which is to say, he's very well connected and this is more than conjecture on his part.

What would be the consequences if it does turn out that the America is responsible? Mark Antonio Wright thinks it would mean a serious breach between Germany and the United States:

It shouldn’t need to be said, however, that the fingerprints of the United States on this incident would break the Western alliance. Whether or not it was bad economic and geopolitical policy on the part of the Germans to build this pipeline (and it surely was), the Germans would never forgive America for such an action. Do you think that German politicians would be able to withstand the political pressure from a very cold German public during a very cold German winter if America could be shown to be responsible for some of that trouble? I don’t. The Germans would throw the Ukrainians overboard, and the United States would have surrendered the moral high ground and probably lost this war in a single stroke.

Tucker Carlson's take is even darker. He argues that this would be a direct provocation of "the largest nuclear power in the world." Not, he says, that we should expect it to go nuclear immediately. But it would give Russia a real excuse to engage in some industrial sabotage of its own. Which could, very quickly, "cascade downward" into the homes of average Americans.

Watch his report and make your own decision.

Diary of an Acclimatised Beauty: Kyiving

August in London. Did you ever hear of such a thing? Mummy and Daddy are headed to our country house soon but it’s been the three of us while I’m here at my childhood home in St John’s Wood. Back in California I have my own house. And my Tesla, and my Tesla grid, but I haven’t been terribly motivated to go back. And Britain’s fascination with American crime isn’t helping. Flash mobs looting a 7-11? Risking life and limb for a packet of cheese curls? Staggering really, so here I remain, working, and endeavouring to save our planet.

In an effort not to treat this house like a hotel, I always try to leave a note as to where I’m going but as we’re flying private I couldn’t leave the flight number, and  ‘Off to Kyiv’ didn’t seem like the note one scrawls on the way out the door. So I simply wrote ‘Off with friends, will ring you from STN’. Stanstead, of course, being one of the three airports in London that can handle VIP jets larger than the 767.

Fortunately, (and unfortunately) Stanstead is only thirty miles from London so I couldn’t put off the call for too long, and I did need Daddy’s help. So ring him I did, and luckily he answered. ‘Good morning Jennifer’ he said, ‘Off to Amsterdam to block a mega soy ship from departing?’ 

UGH! He was awake, alright. ‘No Daddy, that happened in May! And as you very well know I have nothing to do with Greenpeace…’ I huffed.

‘Of course’. He said, ‘Hard to keep the good guys straight from the bad boys’.

‘Right’. I said, moving on. ‘I’m headed to Kyiv with Leo DiCaprio and…’

‘The chap who stiffed you at your last fundraiser?’ he interrupted. 

‘Yes. I mean no. He didn’t exactly stiff me, he just couldn’t turn up’, I insisted. ‘ANYWAY, I’m headed over with Leo and Will Smith and…’

‘The boxer?’ he responded.

‘DADDY!’ I said, raising my voice to stop him, ‘I was just wondering if you could explain black money to me—and if it looks bad’. 

‘Well I think you mean dark money and it apparently looks bad to the GAO but how did you feel about it when you attended that environmental bash in St Tropez? I thought you told me it netted over £40 million’. 

‘But that wasn’t dark money…’ I insisted. 

‘No, arguably that was green money but hey…£40 million here, £40M million…pretty soon you’re talking about real money. Listen sweetheart, if you’re asking me if funneling money to a law firm and spearheading climate-nuisance lawsuits is a bad thing, then yes. I would say it is a very bad thing. And if you asked me if I thought flying around in private jets is also its own climate nuisance, I would also say yes. But how do you feel about partying with the bad guy in what they are advertising as war?

‘I thought Putin was the bad guy’, I insisted. 

Everybody's doin' it, doin' it, doin' it...

‘They’re both bad guys, Jennifer, no matter what the Bonos and the Sean Penns and the Angelina Jolies of this world have to say about it—it’s a very bad business. And the environmental aspect of it should be the least of anyone’s concern’. 

‘Even the nuc…’ I interrupted. 

‘Yes, even the nuclear plant!’ He said. ‘This is the equivalent of complaining about the destruction of historical buildings in Syria when they are putting Christian children’s heads on pikes. But I guess the world needs their Turkish apricots so—go. Do your work'. 

I knew he was right. And he had a right to be upset. The whole green-push had affected his ability to safely and efficiently transport oil on his pipeline. And whenever I had a chance I did tell my clients that the absolute best environmental option for transporting oil is by pipeline. Trucks, and ships, and the Exxon Valdez, being obviously the worst.

Our call had taken the lovely edge off of a perfect flat white but I was determined to rally and to save this planet in some small way—today and every day. What I did know was I had to soldier on, and that world governments had failed citizens by not acting aggressively enough to curb global warming. I would use my seat at the table to do good. 

Bro' time at the front.

When I got on the plane I was told Leo was already asleep, so I plopped down on a sofa near the front and asked for some water to take my vitamins. My phone rang. It was my neighbor from California whom I hadn’t spoken to since her pool skimmer made a loud sucking noise about three years ago. 

‘Hello?’ I said.

She responded with a voice that was half porn-star, half I-might-just-be-fourteen, ’Jennifer? It’s your neighbor—Holly’. 

‘Right. Hi Holly. What’s up? I’m on a plane--about to take off’. 

‘Oh wow’, she said. ‘Where are you going?’ 

Wow?? Being on an airplane deserves a wow? ‘I’m headed to Minorca’, I lied. I wasn’t explaining the whole Kyiv/environment/war thing to her. DiCaprio and Will Smith wouldn’t faze an Angeleno, but Kyiv, might. 

‘Oh wow’. She said again. Apparently, it deserved a wow

‘So… what’s up?’ I said, ‘I’m actually on a plane’. 

‘Yeah, well, this is way out of left field but we are all going down to Laguna because of the fires’. 

‘There are fires? Are we being evacuated?’ I said, remembering the Thomas Fire when I chased a fleeing horse for nearly an hour before I got him off the freeway. 

‘No, the fires are in Castaic. We are going because of the smoke. It’s not a lot- a lot—but the insurance will pay if the smoke is bothering us. And so we are all going down to the Monarch in Laguna’.

‘Is the smoke really that… oh, the Monarch with the spa… got it’. And they wonder why our insurance rates are so high. ‘So…Holly, as I said, I’m on a plane… wow, right? I know. So thank you for thinking of me but obviously the smoke isn’t bothering me’.

‘I get that, but isn’t this sort of what you do? Pollution and stuff?’ 

‘Not so much’.

‘Okay, but if your insurance asks can you say it bothered you too?’

‘I don’t think so… I’m in Spain!’ I said, drawing a look from the air hostess. ‘What I can do is say I’m not there and it has the added benefit of being true.’

The Grammys are weapons, too.

Luckily I saw a text come in and used it as an excuse to ring off. It was my father: ‘Be safe in Kyiv. See if you can get me one of those designer tee shirts Mr Z wears’.

Ha! Not a chance he’d wear one but it made me laugh. ‘Roger that. See you soon’ I texted back. 

‘Are you coming back to London?’ he texted. 

‘OMG yes! At the moment California is just a little too toxic’, I said, hanging up and gladly accepting something a little stronger than water from the flight attendant. 

Never Trust a Junkie

It seems like every day Germany inadvertently contributes to the case against environmentalism. As we've had occasion to discuss before at The Pipeline, over the last few decades Germany, driven by environmental concerns, has been shutting down their (essentially zero carbon) nuclear power plans with an eye towards a total transition to green energy as soon as possible.

Unfortunately, technology being what it is, running a first world nation of 80 million people on wind and solar energy is currently impossible. So to make up the difference in energy supply and demand, Germany has taken to 1) burning massive amounts of (carbon intensive) coal and 2) importing massive amounts of oil and natural gas from Russia.

Of course, Russia then invaded Ukraine, making itself a pariah state. The E.U. hit it with a host of economic sanctions, as did the United States. The object of these was to tank the Russian economy -- which is heavily reliant on oil and gas revenues -- forcing President Putin to back down. And Germany, led by new chancellor Olaf Scholz, has been directing the charge. They've issued full-throated condemnations of Russia's actions and pledged to double their military spending in response. They've even announced a new policy towards Russia known as Zeitenwende, or "Sea Change," suggesting that they're going to end their reliance on Russian energy as soon as possible.

Olaf Scholz: tough talk, no action.

But actions speak louder than words, and CNN reports that Germany is desperately searching for ways to circumvent anti-Russian sanctions. They are particularly desperate the find a way to meet Russia's demand that existing oil and gas contracts be paid for in rubles rather than euros, a strategy that they've employed -- rather successfully -- to counter western sanctions and keep their economy afloat while the war continues.

Gas distributors in Germany and Austria told CNN Business that they were working on ways to accept a Russian ultimatum that final payments for its gas must be made in rubles, while complying with EU sanctions.... Buyers could make euro or dollar payments into an account at Russia’s Gazprombank, which would then convert the funds into rubles and transfer them to a second account from which the payment to Russia would be made. Germany’s Uniper said on Thursday... that it believes a “payment conversion compliant with sanctions law” is possible.

It helps that Germany is essentially the most important member of the E.U. and as such it has a lot of say over how sanctions will be enforced. So this comes as no surprise:

The European Commission issued guidance to EU member states last week saying that is “appears possible” that buyers could comply with the new Russian rules without getting into conflict with EU law. EU governments are likely to allow the payment mechanism to go ahead, Eurasia Group said in a note on Thursday.

Which is to say that Germany is going to find a way to keep paying for Russian energy, keeping the ruble afloat and ensuring that the war in Ukraine continues, no matter what Chancellor Scholz says when he's on camera. They're addicted, and addicts are unreliable.

Germany: A Cautionary Tale

Richard Fernandez recently wrote about Germany's famous (and infamous) Energiewende policy program, whose object was to transition the country away from low-carbon natural gas and effectively zero-carbon nuclear energy, but whose consequence has been to replace them with carbon-intensive coal while getting the country addicted to Russian oil and gas. The irony of this is something we've touched on before at The Pipeline, as when we pointed out the fact that Germany, an inspiration to environmentalists the world over, has been "bulldozing forests for the purposes of mining coal," at the same time as the purportedly evil empire of America, governed by a cabal of grasping oil executives in smoke-filled rooms, has led the world in total emissions reduction since the year 2000.

In a more just world, tree-huggers everywhere would be celebrating the fracking revolution rather than obsessing over environmentally questionable solar panels and biomass. But, as Fernandez discusses, while we could all see how badly the Energiewende was going -- the Wall Street Journal called it the "world’s dumbest energy policy" years ago -- the war in Ukraine upped the ante considerably. Read his piece for the key details, but one point worth emphasizing is the tremendous economic bind German environmentalism has put the country in. While well-intentioned bleeding hearts the world over have been calling for a total embargo of Russian energy exports, the German government's economic advisors have been pointing out that such an action would lead to a significant contraction of the German economy. Reuters:

Germany would face a sharp recession if gas supplies from Russia are suddenly cut off, the country's leading economic institutes said on Wednesday, and the government said the war in Ukraine poses "substantial risks" for Europe's largest economy. A sudden stop in Russian energy supplies... would slow economic growth to 1.9 percent this year and result in a contraction of 2.2 percent in 2023, they said.... "If gas supplies were to be cut off, the German economy would undergo a sharp recession," said [the Kiel Institute's] Stefan Kooths.... The cumulative loss of gross domestic product (GDP) in 2022 and 2023 in the event of a such supply freeze would likely be around 220 billion euros ($238 billion), or more than 6.5% of annual economic output, the five institutes said.

All you need is a little
Latvian blend."

In fact, it has been reported that for all of their anti-Russian rhetoric, energy starved European nations have been looking for ways to get around the sanctions imposed on Russia in the wake of the invasion. One popular loophole involves the blending of Russian petroleum products in foreign ports with those sourced from other countries. If less than 50 percent of a barrel comes from Russia, it can be sold under a different flag. "Latvian blend" oil has become the euphemism of choice for this product, as Ventspils, a port city Latvia, is where much of this mixing takes place.

There's a take-away from all of this for the United States, Canada, and any other free (or relatively free) nation blessed with natural resources. That is: if you want to control your own destiny, don't follow Germany down this road. It was laid out for them by anti-human, anti-civilization nihilists, and the cost has been astronomical. They exist in our nations too, and they have amassed considerable power. But if we care about our future, it is imperative that we give them the cold shoulder. We need to start putting our interests first, and not empowering "humanitarians" whose efforts inevitably benefit the bad actors of the world.

In Ukraine, Farewell to the 'New World Order'

Hostilities in the Ukraine are now in their second month, devastating the country, destabilizing economies around the world and provoking fears of a wider conflict. It is a war in which there are no heroes: Putin is a military aggressor, Zelensky is the beneficiary of the U.S.-inspired 2014 Euromaidan coup, and Biden and other Western leaders are reckless provocateurs. Interestingly, it has been said that Ukraine is not only about Ukraine or even about Russian imperialism but also about the expansion of neo-Liberal global reach into the economic structure (via SWIFT, the International Monetary Fund, etc.), military organization (via NATO) and the political order of other nations, along with regime change in Russia or its reduction to a pariah state.

There is considerable agreement among scholars and experts that substantiates the hypothesis. Former Portuguese Secretary of State for European Affairs Bruno Maçães points out that “the West feels entitled to pursue its particular vision with all the tools of state power—in many cases, military power… Western values and norms [need] to be interpreted and enforced, and the most powerful nations in the West have always arrogated that task to themselves.” 

More recently, in a wide-ranging interview in The New Yorker with specific reference to Ukraine, University of Chicago political scientist John Mearsheimer argues that “the United States and its European allies share most of the responsibility for this crisis.” Mearsheimer’s hypothesis is clearly predicated on Thucydides’ classic History of The Peloponnesian War. The issue unraveled there is extraordinarily complex, but Thucydides isolates the root cause of the conflict in Athenian power projection and Sparta’s fear of military encroachment and market domination. Each of the belligerents felt it had justice and reason on its side—the concept of πρόφασις (prophasis—the reason or excuse for going to war), which Thucydides carefully distinguishes, will obviously vary, depending on whether you are an Athenian or a Spartan, an American or a Russian. Who is the real aggressor? 

It's all about prophasis.

Mearsheimer, like his historical predecessor, underscores fear or apprehension as the central prophasis. “There is a three-prong strategy at play here,” he writes: “E.U. expansion, NATO expansion, and turning Ukraine into a pro-American liberal democracy.” Russian “fear” of Western power projection on its intimate borders is, for him, the crucial issue.

Mearsheimer is not an oracle—he was patently misguided in his denunciation of the “Israel lobby”—but his view on the Ukrainian imbroglio is persuasive. Moreover, whether he is wrong or right on Ukraine pales in comparison with the geopolitical events now massively underway. Certainly, if Western expansion is the plan, it does not appear to be working.  Unintended consequences will often prevail. As Robert Burns famously wrote, “The best laid schemes o' mice an' men / Gang aft a-gley.” 

The quagmire in which the West now finds itself is deep, but Zelensky’s urging NATO to “close the skies” is an option that, so to speak, will not fly, short of igniting a major, perhaps nuclear, war that no sane person wants. Indeed, at this point in time, perhaps the most convulsive effect of American and European policy is the unanticipated decoupling of a major part of the world from the so-called New World Order and from a global market ideology, both promoted and imposed by Western powers

Additionally, the laying of crushing sanctions on Russia—the current version of the “Megarian decrees” invoked to exclude Megarian merchants from Athenian markets and, according to Thucydides, one of the initial sparks of the Peloponnesian War—has been an abysmal failure. The result should have been predictable: “enormous economic repercussions” and recessionary pressures at home and the strengthening of the Russian ruble, which has rebounded from its near collapse to become one of the world’s best-performing currencies, currently pegged at 83 to the dollar. 

Putin’s requiring payment in rubles from “unfriendly” nations for Russia’s energy and commodity exports has also helped to recapitalize the ruble. In effect, the severing of Russia from the West has solidified the country’s trade relationships with non-compliant nations like China, India and the Arab bloc, as well as encouraged it to replace its reliance on the international SWIFT banking and messaging network with the Chinese alternative, the Cross-Border Interbank Payment System, or CIPS. Russia and China are also intent on promoting growing cooperation with BRICS, an overlapping economic group consisting of Brazil, Russia, India, China and South Africa, in order tooptimiz[e] global economic governance.” According to Ross Kennedy of the Securities Studies Group, this collaboration will eventually lead to a notable increase in non-dollar and non-euro denominated trade.”

This rupture has led to the emergence of what scholars call “Civilization States,” a term coined by ethnopologist Emil Pain as “civilizational nationalism.” Whether this is a pioneering or a regressive development is irrelevant; it is a fact. The concept is elaborated in Taras Kuzio’s just published Russian Nationalism and the Russian-Ukrainian War, which is not kind to Putin, and in an important essay by Fabian Linde referring to countries, in Emil Pain’s words, that affirm an “ideology of separateness” intended to consolidate “society on the basis of concepts of a common historical and cultural essence and to counterpose [one’s] own special and unique community to ‘foreign’ communities.” 

In opposition to the universalist philosophy of the West, such countries embrace their own history, culture, traditions and “currency first” legislation, establish their own trade and diplomatic rules for dealing with the international community, focus on linguistic and religious continuities, stress the importance of longstanding parental and kinship relations as a means to social coherence, and strive to become self-sustaining cultural mega-units via multipolar trade and currency partnerships with other civilization states. In Russia’s case, as noted, these would be China, India and the oil-producing Arab states. Smaller nations, as well, are considering following Russia’s example. The dominoes are beginning to fall. 

In the words of Samuel Huntington from The Clash of Civilizations and the Remaking of World Order, “a civilization is the broadest cultural entity” where people “feel culturally at home.” Former Cambridge University sociologist Göran Therborn similarly describes civilization as “an ancient cultural configuration… the deepest layer of contemporary cultural geology,” a more comprehensive and historically unified totality than the discrete political organization and constitutional frameworks of nation states. In essence, a civilization state is a more encompassing prescriptive category than that of the nation-state. 

How's that globalism workin' out for ya?

As Indian General Secretary of the ruling Bharatiya Janatra Party Ram Madhav has deposed, “Asia will rule the world, and that changes everything because in Asia we have civilizations rather than nations.” Analogously, Bruno Maçães recalls, during a visit to China, being told by his handler: “Always remember that China is a civilization rather than a nation state.” Nation-states, Maçães reminds us, “are a Western invention. Civilizations are an alternative to the West… a common, increasingly integrated political and economic landscape.” The civilization-state refuses to sacrifice its specific culture for the sake of the secular and cosmopolitan unipolar project adopted by Western societies. Nor does it consider the so-called “international community of nations” as more than a convenient Western figment.

Another basic distinction between the Western nation-state in its contemporary evolution and the Eastern civilization-state in its current emergence has to do with borders. While retaining its governing apparatus, the modern nation state is increasingly porous, opening its borders to refugees legal and illegal and rampant immigration. The development of a centralized banking network equally plays into the dissolution of independent monetary policy—that is, the nation-state has opened its fiscal borders as well. The civilization-state, while larger in its population mass and in its embracing of long-enduring cultural values and historical antecedents, is paradoxically smaller in the sense of keeping its borders closed to outliers and resisting global control of its currency protocols, trading provisions and supervening organizations. 

This is very bad news for the missionary universalism of the neo-Liberal unipolar West and its presumably unstoppable historical thrust toward a global neo-liberal system, which Francis Fukayama enthusiastically touted in The End of History and the Last Man. As a result of a momentous miscalculation regarding the Ukraine conflict, treating it as a pretext to augment its own political, military and fiscal hegemony, the days of Western supremacy appear to be over and the Globalist fantasy dead in the water. 

Fukuyama: maybe not the "end of history" after all.

According to CBS, in a meeting with Chinese Foreign Minister Wang Yi, Russian Foreign Minister Sergey Lavrov painted a picture of a new and different “world order,” saying the world was "living through a very serious stage in the history of international relations” and that Russia and China, along with others, will move to create a new and unique multipolar world.

The march of Western nations toward an interlocking fiscal system based on the petrodollar as the world’s reserve currency and governing the world’s trade arrangements and political future seems helpless before the tectonic shift of Eastern and Eurasian polities toward a new system of communal and economic interdependence. The civilization-state is in process of supplanting the independent-but-allied Western model of decentralised states regarded since the Peace of Westphalia as the global paradigm for political organization and cross-national codification of a particular set of laws and treaty obligations—often, be it said, more honored in the breach than in the observance. The conflict in Ukraine has been the catalyst of a scalar reconfiguration in the political orbits of nations and civilizations.

In The Rise of the Civilizational State, Christopher Coker warns that we are “living in a world in which civilization is fast becoming the currency of international politics.” The evangelical zeal and self-interest of Western-centric liberalism, with its one-size-fits-all rule-based political structure and its dominant financial institutions as embodied in the nation-state, is coming to an end. “The west may be out of the business,” he writes, “of shaping history for everyone else, or even itself.” The best laid schemes of military planners and state politicians do often gang aft a-gley.

Elon Musk Talks Some Sense

So THIS is a bit of a shocker, coming from the founder and CEO of the world's largest manufacturer of electric cars:

Musk is, in fact, absolutely right, as anyone who pays any attention to this topic can see. Oil is the life's blood of the modern world, and there is no way that so-called "sustainable energy" can replace it any time soon. But one wonders what his motivation is in saying so, especially when the current environmentalist line is that the war in Ukraine's knock-on effects on oil and gas prices demonstrates definitively that, in the words of Jen Psaki, "we need to reduce our dependence on oil in general and we need to look at other" sources of energy. You'd think Musk would be doubling down on his bread and butter, alternate energy sources.

It would be tempting to take this as a signal that he's planning on running for president, except that as a naturalized (that is, not natural-born) U.S. citizen, he is ineligible. It is also possible that he's just honestly saying what he thinks, something which has gotten him in trouble with the Karens who police prominent public pronouncements in the past. But one intriguing possibility is that he's looking to get off the ship before anyone can admit that it has hit an iceberg, projecting that the market for luxury electric cars will become increasingly limited in the next few years, as inflation lingers, the war in Ukraine drags on, and the economy tightens.

Whatever the case may be, his observation is both accurate and welcome. Hopefully other members of our ruling class listen.

Vladimir Putin: Energy Realist

Here's Michael Shellenberger with a simple equation which undergirds everything we're seeing in Ukraine right now and which will inform everything that happens once the war is over:

Putin knows that Europe produces 3.6 million barrels of oil a day but uses 15 million barrels of oil a day. Putin knows that Europe produces 230 billion cubic meters of natural gas a year but uses 560 billion cubic meters. He knows that Europe uses 950 million tons of coal a year but produces half that. The former KGB agent knows Russia produces 11 million barrels of oil per day but only uses 3.4 million. He knows Russia now produces over 700 billion cubic meters of gas a year but only uses around 400 billion. Russia mines 800 million tons of coal each year but uses 300. That’s how Russia ends up supplying about 20 percent of Europe’s oil, 40 percent of its gas, and 20 percent of its coal. The math is simple. A child could do it. The reason Europe didn’t have a muscular deterrent threat to prevent Russian aggression—and in fact prevented the U.S. from getting allies to do more—is that it needs Putin’s oil and gas.

He's right that a child could follow the math here. What's sad is that our leaders can't seem to. Shellenberger goes on at length about how the nations of the west have gone all in on a "delusional" environmentalist ideology which "insists that it’s just a matter of will and money to switch to all-renewables" and calls for rapid "'degrowth' of the economy" in order to avoid a "looming human 'extinction'" that's never going to come. Meanwhile, "Vladimir Putin made his moves":

While Putin expanded Russia’s oil production, expanded natural gas production, and then doubled nuclear energy production to allow more exports of its precious gas, Europe, led by Germany, shut down its nuclear power plants, closed gas fields, and refused to develop more through advanced methods like fracking. The numbers tell the story best. In 2016, 30 percent of the natural gas consumed by the European Union came from Russia. In 2018, that figure jumped to 40 percent. By 2020, it was nearly 44 percent, and by early 2021, it was nearly 47 percent.

We've said before that America likes to buy green, fuzzy feelings from China when we purchase the solar panels they've built using energy generated by coal power plants. Russia has done much the same for Europe. They enjoyed being on Team Thunberg and having the adulation of right-thinking people all over the world. But they also liked charging their iPhones and having heat in the winter. Crazy old Uncle Vlad let them have both.

Shellenberger's solutions to this problem are pretty straightforward, and you should make it a point to read the whole piece to find out what they are. But when you do, despair, because the chance that our leaders give them a try is essentially non-existent. Doing so would make Greta mad, and they can't have that.

Biden's Energy Policy: Something for Nobody

Imagine being a Biden White House aide tasked with writing this week’s State of the Union address. Having spent weeks crafting an opus of appeals to Congress over Biden’s “climate” agenda, reality barges in and scrambles the planned approach. After all, squandering the inheritance of energy dominance, and ushering in a U.S. equivalent of Germany’s disastrous energy policies here — with a reliance on China for rare earth-mineral dependent "renewables" and  increased reliance on Russian oil — has gone from being weirdly out-of-touch with Americans to utterly disconnected from reality. What to do?

Unfortunately, adjusting to events and scrapping old plans until better times hopefully return was not the option chosen. Acknowledging how policy mistakes have brought the world to this week’s deadly and further-perilous point was therefore plainly out of the question.  Instead, Tuesday night’s speech, after opening with supportive words for Ukraine itself, was otherwise oblivious to the fact of Western Europe now lying prostrate — cornered by its own obsession with Green New Deal policies (called “Net-Zero” over there) into near-total reliance on intermittent energy and unreliable foreign sources of traditional hydrocarbons.

Germany: the old ways are best.

For a few days the line coming from Europe and the Biden administration was a unified one, that the “Ukraine turmoil” shows “fossil fuels” are clearly bad and it’s time to go harder on the windmills-and-sun-catcher fantasy. Apparently, the world only just recently started down that path, and has been insufficiently committed to it or something.

Germany has spent the most time and money pushing the "green" agenda and, as is now well-known, is the worst off among its neighbors for the effort from both economic and national security perspectives. Encouragingly, over the weekend Germany made several “about-face” announcements giving hope that maybe the dogmatic slow-learners in government there are somewhat teachable. A Monday Wall Street Journal story noted, “Germany’s Climate Left Gets Serious: Greens in Berlin start to make responsible energy trade-offs. Is President Biden listening?”.

German Chancellor Olaf Scholz on Sunday made energy a central plank in his overhaul of his country’s foreign policy. In response, leaders of the Green Party in his coalition government have offered the political left around the world a lesson in how to translate lofty ideals into responsible governance. Germany’s overreliance on Russian oil and natural gas has long been a dangerous vulnerability, which Berlin can no longer ignore after Vladimir Putin’s invasion of Ukraine.

That said, as of now Germany—spooked by Japan's Fukushima accident a decade ago— still plans to shut down three nuclear power plants this year, in favor of more reliance on Putin’s gas. Dogma and donors are cruel mistresses.

Back here, pre-speech trial balloons told us that, because real energy infrastructure “would take years,” that’s a no-go. And Tuesday night, we heard the now-ritual, “We’ll build a national network of 500,000 electric vehicle charging stations," and the apparently immediate solution of “double America’s clean energy production in solar, wind and so much more [and] lower the price of electric vehicles, saving you another $80 a month that you’ll never have to pay at the pump.”

That computer won't run on plant fumes, lady.

In normal times, the most galling line might have been the promise that more Green New Deal-style policies will “cut energy costs for families an average of $500 a year by combating climate change.” After years of confessions that energy costs will have to skyrocket “necessarily,” and that “climate change needs higher energy bills,” joining headlines blaring that “Energy bills will have to rise sharply to avoid climate crisis, says IMF,” this cynical gamble on public amnesia showed that selling an ideological agenda is what matters.

White House press secretary Jen Psaki previewed this business-as-usual approach on ABC’s "This Week." A mere eight of the past nine presidents have used the State of the Union speech to push expensive governmental interventions in the name of a renewable energy agenda to replace what works and is found underneath American soil in abundance (the virtues of which Trump deviated from the norm to extoll). Tuesday made that 9 of 10.

Like the Europeans now reaping the climate-policy whirlwind, President Biden and his party are too heavily invested in the matter with their base and (like a growing flock of Republicans) with their donors to let go.

Biden’s use of the State of the Union reflected an unnerving resistance to change course when certain inevitable consequences of the “green” agenda are coming home to roost. Demanding more of the same last night, faster, was simply irresponsible. Failing to exploit one’s own, plentiful resources in fealty to the Green Blob has proved a “lesson in energy masochism” and Russian energy blackmail.

Western Europeans for years have complained that the U.S. was too slow to follow their examples on “climate” and energy policy. Biden's speech was a plea for ideological priorities. Existing law allows Biden to resume energy policies actually grounded in real-world experience. The world should hope that in coming weeks the administration joins, yes, the German Left to acknowledge the world we live in, chucks the green dogma, and does what’s really best for the planet.