New York Times By Helen Thompson 4/23/2022
Opinion
Guest Essay
Americans are worrying about their gas prices. Germans are turning down their heating. Peru has seen violent protests — and a violent crackdown on them — over rising fuel costs. Nigeria’s national energy grid recently collapsed. And that’s just this spring. Focused on the future, the United Nations Intergovernmental Planet on Climate Change warned in a report on April 4 that too much investment is going into fossil fuels and too little into the energy transition that could prevent a devastating increase in global temperatures.
This persistent, simmering crisis around energy, its cost and the politics around it will not end soon.
Vladimir Putin has escalated this crisis. His invasion of Ukraine has pushed up prices and forced Europe — until now the largest importer of Russian natural gas — to begin an attempt to end its longstanding dependence on Russian gas. But Mr. Putin didn’t cause this crisis alone. For nearly a year before Russia’s invasion of Ukraine, supply struggled to meet demand, causing prices to surge. For the best part of a decade, the American shale boom met the world’s rising energy needs, but in 2020 shale oil output slumped and the rate of growth of shale gas fell.
President Biden’s hope that he could focus his presidency on the climate, not fixing the world’s oil supply, shattered. Unable to resurrect a nuclear deal with Iran that would have restored Iranian oil to world markets, Mr. Biden began last year to ask other producers to increase their output. His pressure was to no avail. Meanwhile, China’s demand for gas imports grew by 20 percent over 2021, helping push European gas prices up nearly sixfold between March and December.
That was already putting pressure on politicians, but the Putin shock — oil prices rose by one third in the first two weeks after the invasion — has exposed just how much governments fear rising fossil fuel costs, never mind their optimistic rhetoric that high prices will encourage a transition to greener energy sources. By releasing one million barrels of oil a day from the Strategic Petroleum Reserve between May and November, Mr. Biden will inject the largest-ever volume of emergency American supply into the market since the stockpile was established in 1975. It will provide, at best, temporary relief. And as Asian countries start to adjust to a world in which ships bearing liquid natural gas turn away from the Pacific and redirect to Europe, their demand for coal is going up.
All of this means higher energy prices for everyone, everywhere — unless economies return to the recessions they endured during the pandemic, an option no one hopes for.
The parallels with the 1970s are obvious. The oil shock in the wake of the Yom Kippur War in October 1973, which involved the world’s rising oil producer, Saudi Arabia, was extremely disruptive economically and geopolitically. That first shock was followed in 1978-79 by the revolution in Iran and Iraq’s invasion of Iran, plunging the two oil producers into a long war.
More:
https://www.nytimes.com/2022/04/23/opinion/oil-gas-energy-prices-russia-ukraine.html
