Is There Any Limit to How Dumb Can Governments Get?

Guest blog by S. A. Shelley: The answer is no, there is no limit to how dumb governments can get in terms of irrational legislation, fanciful proclamations and of course impossible energy policies. There are a few fundamental things that governments need to do right for society to survive, let alone thrive. Amongst them are protecting their citizens from external threats (military or viral, for instance) and protecting individual rights to conduct commerce or disagree with the government. After that, arguments start about everything else that people think governments should do or not do. I won’t argue those points, but I will argue that governments all around the world, except for China, are being complete idiots when it comes to energy trade and transition.

Access to secure energy supplies is critical for a nation to exist. Henry Kissinger is credited as once saying that “Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world.” Energy supplies can be domestically sourced from natural resources and apart from Canada most nations feel blessed when they have an abundance of natural resources. Energy supplies can also be provided domestically by technology such as nuclear power in France or wind power in Denmark. There are many sources of energy, but problems arise in transporting the energy resources from where they are located to where they are needed, or with storing the energy from when it is produced to when it is needed. Access to stable energy supplies can also be achieved through trade (America – Canada), graft (China – almost everyone else) and intimidation (Europe – Russia). Fortunately, most governments recognize the fundamental need for stable energy supplies and the associated problems, but unfortunately every government is completely off base with their approaches.

I’ve written before about how Germany’s energy transition is failing (CO2 emissions are rising), and how total domestic power demand is increasing while the renewable share of power supply is falling. Finally some thinkers and analysts with larger followings are beginning to come to the same conclusion that Germany’s energy policy is messed up (techxplore, TheHill, reason.com). A lot of Germany’s problems arise from politicians reacting to minority woke feelings and not undertaking thoughtful planning. Reviewing Germany’s natural gas imports over the last few years along with the proportion of imports from Russia doesn’t look good (Fig. 1).

Fig. 1: Annual German Natural Gas Imports (Source: EIA)

Even though the import trend seems to be decreasing, the proportion of imports from Russia, even without Nordstream 2, seems to be increasing. The Brookings Institute even suggests that Germany may soon get 70% of all its gas from Russia. From the Russian side, Gazprom is happy to announce that Germany is its biggest customer.

Add in the interdependence of European states to each other, and it becomes obvious that Europe is in an energy pinch (cnbc, msn), which is something that we had long ago predicted in prior blogs. The time for nations to stand up to autocrats is at the beginning of the first autocratic stirrings, not when the autocrats have your economy by the throat.

What about the United States? Just as nuts.

Figure 2 is taken from the EIA and shows the oil imports from Russia. Notice the growth of oil imports over recent years to nearly 800,000 bbls / day?   

Figure 2: US Oil Imports from Russia (Source: EIA)

Another way of thinking about this is that every day, the US pays about $72,000,000 to Russia (I’m using gross payments, and the Brent Price at time of publishing). In a year, that’s over $24 billion, which buys the Russians a lot of artillery, tanks and mercenaries to cause mischief in Africa or the Ukraine. In what world does one pay money to one’s foes then expect them to not cause trouble?

But in addition, pipelines that could bring oil from the Midwest to the East coast were cancelled (oilprice.com, huffpost). Similarly, oil that could have come from (almost communist authoritarian) Canada via Keystone XL (sized to bring about 800,000 bbls of oil per day to the US) was cancelled.  That’s a tough choice: 800,000 bbls of oil per day from Russia or 800,000 bbls of oil per day from Canada? Buckle up America, Russia now has you over a barrel too.

But the one pipeline that needs to be shut down, Enbridge Line 5 through Michigan, a ticking environmental disaster that delivers less than 5% of its contents to American states, keeps getting excused by Washington. What is that all about?

Why are governments doing so many dumb things? I don’t have the definitive answers, but I have some ideas. Firstly, politicians are starting to believe their own hype and are becoming further removed from reality (narcissism). Secondly, the senior bureaucracy ranks are now filled with woke folks who have no idea about any hard sciences or data (stupidity). Thirdly, those bureaucrats who know hard science and data are being quiet because they enjoy keeping their jobs (fear). Fourthly, too much money is thrown around at governments (short term greed). Et cetera, et cetera, bunny bunny blah blah.

As I’ve written before, green energy is better energy, but the way that the western democracies and autocracies (Canada) lurch about reacting to minority woke mobs will result in a bigger mess than we have now.

Shut Down Line 5

Vive l’Alberta Libre!

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One thought on “Is There Any Limit to How Dumb Can Governments Get?”

  1. Your analysis is interesting, but I’d like to challenge you a bit. I would suggest that the role of a democratic government is to protect the individual rights to conduct commerce up to the point that they infringe on the rights of others. Preventing pollution, financial scams, use of toxic materials, etc. is a fundemental role for our government, well needed in a capitalistic society.

    The US exports 8.6 million barrels of oil a day, making the amount of money US pays for Russian imported oil drops in the bucket compared to what the rest of the world pays the US. And US importation of Russian oil is down to about a 1/4 of your figure now.

    Even if the XL pipeline had been approved, it wouldn’t be finished yet. And by the way, that oil can still come to the US by rail, as it currently does. You can argue about comparative safety of the transportation mode, but this is not a Canada vs Russian oil “choice” as you suggest.

    One data point for successful transition might be to look at overall CO2 emmissions. From that standpoint, the EU has reduced emmissions by more than 30% from 1979 levels. That looks like good progress. While over-reliance on Russian gas is a problem for Europe, fuel shuffle will limit impact, while reinforcing the objective of building renewable sources.

    Finally, you’re criticism of “woke folks” is off base. Being “woke” means being aware, the opposite of being ignorant. These are the people who have been identifying and working at issues like climate change, equality, etc that challenge us all.

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