New York Times columnist Thomas Friedman is concerned. Energy prices are spiking all over the globe, setting into motion a confluence of events that could destabilize Western democracies and augment the power enjoyed by anti-Western petrostates like Iran and Russia. Worst of all, he writes, “I fear we’ll see a populist backlash to the whole climate/green movement.” The Times headline advises its readers to commit to an ideological goal ahead of this crisis: “Don’t Blame the Greens.” But Friedman doesn’t seem to have taken this advice.
The columnist accurately notes that the proximate causes for a looming energy crisis are multifarious, and some are driving this emergency more than others. Foremost among them is the pandemic. Energy production fell off a cliff when demand for transportation and its associated fuels declined to an artificial low in 2020. That, he further notes, led investors to pare back speculative financing of capital-intensive projects such as the development of new natural gas deposits and crude wells. That, in turn, has led producers to be cautious about responding to market pressures by increasing production. What’s more, foreign energy producers have not responded to these conditions by increasing supply.
But other key factors leading to the impending supply crunch, according to Friedman are the ways in which environmentally cautious Western governments are reducing their respective carbon footprints “in totally uncoordinated ways, from the top down, and before the market has produced sufficient clean renewables like wind, solar, and hydro.” It boggles the mind how this articulation of green energy policy objectives and their associated consequences somehow absolves the “greens” of complicity.
The sloppy, blinkered effort to transition away from fossil fuels to hypothetical sources of power that cannot meet the energy consumption needs of the planet due to the constraints imposed on them by the laws of physics is an obstacle to meeting “newly minted environmental, social and governance standards for clean energy.” Friedman goes on to mourn the existence of “nice” greens, whose politics preclude the use of transitional hydrocarbons such as natural gas or even nuclear energy. One wonders if the column’s headline writers bothered to read the piece.
Of course, the United States has not been spared the consequences of green imprudence. The same people who brought you rolling power outages in California (before the onset of the pandemic) as a response to resource deficiencies and green energy politics are now dictating terms from Washington, and with predictable consequences. As one market strategist with the investment banking firm Federated Hermes told Axios reporters, the political commitment to transitioning away from fossil fuels in developed economies has put downward pressure on production. “All of those different moving pieces took U.S. energy production down by about 2 million barrels a day over the course of the last year, at a time when demand has surged based on the global reopening trade,” he said. That is partly a result of the Biden administration’s actions.
Shortly after he entered office, Joe Biden shut down oil and gas leasing on federal land and directed executive agencies to eliminate spending that serves to subsidize fossil fuel industries. Even as benchmark crude prices increased, Biden’s policies forced developers to abandon transit pipelines such as the Keystone XL pipeline, among others. The activist class is so dead set against pipelines they’re even opposed to the idea of transit networks that would store greenhouse gases in underground facilities. The technological marvels that produced the fracking revolution—the developers of which quickly became the world’s “swing” energy producers that could stabilize the global market in the event of a supply shock—have been handcuffed. No wonder speculative long-term investors in the development of energy sources are spooked.
The intended consequence of these policies was to create artificial energy scarcity and incentivize alternative fuel producers to enter the marketplace. “If you restrict the supply (of oil and gas), you alter the market and you create a better environment for more sustainable fuels,” New York University professor Max Sarinsky told the Associated Press. This was all part of the plan, to the extent there was a plan.
So, yes, there’s a lot of blame to go around if what Friedman forecasts to be a dark, cold, and scary winter materializes. No small share of that blame should be apportioned out to the central planners who sought to kneecap the existing energy market in favor of an insufficient alternative. Friedman calls these the “nice” greens. But if the intended consequences of their policy preferences result in engineered hardships for the developed world and increased geopolitical influence for despots and theocrats abroad, that doesn’t seem so very “nice” to me.
An earlier version of this item attributed the authorship of the cited New York Times column to Paul Krugman.