October 18, 2021

The World Stock Markets Tips & Targets, News, Views & Updates

The World Stock Markets Tips & Targets, News, Views & Updates

Climate of Strategic Vulnerability

Russian President Vladimir Putin leads a cabinet meeting via video conference at the Novo-Ogaryovo residence outside Moscow, Oct. 5.

Photo: Alexei Druzhinin/Kremlin Pool/Associated Press

Amid a border surge, pandemic and inflation, here’s one problem that isn’t (yet) weighing on the U.S. political system: an energy crisis. In Europe energy prices have risen by a factor of five in the last year, and Vladimir Putin is exploiting the situation for Russia’s gain. It’s a reminder that America’s energy production is a source of strategic strength that it risks trading away for climate dreams.

Europe’s energy system, which has sought to banish domestic fossil fuels, has left the Continent vulnerable to the global surge in oil and gas prices. The Financial Timesreports that “the strength of the wind blowing across northern Europe has fallen by as much as 15 per cent” in 2021. That’s reduced the productivity of European wind farms and increased reliance on natural gas, of which Russia is the main supplier.

That creates strategic leverage for Russia’s Gazprom, which has been in no hurry to speed production despite requests from European politicians. “I think there are two factors, which could somewhat cool off the current situation,” said Russian Deputy Prime Minister Alexander Novak in an energy conference last week, according to Reuters. “First of all, of course, this is, definitely, completion of certification and the fastest clearance for gas supplies via the completed Nord Stream 2.”

Got it? Speed up those clearances, and maybe we can see about that unfortunate gas shortage. Moscow is eager to complete the Nord Stream 2 gas pipeline to Germany that will provide a gusher of revenue. The newly-elected German government could be cooler to the pipeline than Chancellor Angela Merkel, and the Biden State Department gave Moscow an opening by dropping sanctions on the pipeline’s construction over the summer.

The predicament of America’s European friends is especially striking against the backdrop of the Biden Administration’s energy policy at home. It has canceled the Keystone XL pipeline in the U.S. and is using the regulatory state to suppress American drilling, even as National Security Adviser Jake Sullivan pleaded with the OPEC oil cartel and Russia in August to ramp up production.

Energy supply is a key asset in the global balance of power. Russia and China know this, and the Biden Administration’s obsession with unrealistic climate goals at the expense of energy security will do real harm to the U.S. economy and global interests.

Bad policy choices contribute to the energy supply crunch. Photo: Associated Press

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Appeared in the October 11, 2021, print edition.

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