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How has the Government Destroyed our Energy Sustainability

How has the Government Destroyed our Energy Sustainability

To create a realistically sustainable policy makers must enact market-oriented strategies to fix the energy fiasco they have created.

Author

Regardless of what some economists and world leaders are claiming, the U.S. and the world are facing a recession. In the past year, inflation and credit card debt have skyrocketed, with rising energy costs serving as a key contributor. The CPI for energy in the United States has risen an astounding 17.6%. By appeasing climate activists and the woke mob, Western governments have persistently sabotaged their economies and national security. While some falsely blame the Russia-Ukraine war, the lack of realism employed by Western governments when it comes to energy policy is the true culprit for this ongoing energy crisis.

United States

Amongst the many faults of the Biden administration, perhaps the most egregious is its energy policy. In June 2021, President Biden canceled the Keystone XL pipeline, a pipeline that was expected to transport 830,000 barrels of oil on a daily basis from Alberta, Canada to Nebraska and employ 11,000 Americans by the end of 2021. Before the cancellation of the pipeline, TC Energy, the pipeline’s owner, had awarded more than $1.6 billion in contracts. For reasons unrelated, since the pipeline’s cancellation, gas prices on American consumers have risen substantially. In a nation where 85.3% of the people rely on car travel to commute to work, a substantial rise in gas prices matters. If the pipeline was allowed to operate we would have been living in a much cheaper world. Unfortunately, the cancellation of the pipeline has placed an economic burden on American consumers, 56% of whom are experiencing economic hardship from inflation.

Given the current political-energy crisis, one should advocate for energy production to be in house or come from a close ally. Fortunately, 71% of US crude oil imports came from Canada (61%) and Mexico (10%) in 2021. However, the cancellation of the Keystone XL pipeline limits more efficient oil importation from Canada, a catastrophic mistake given that the US regularly imports oil from Saudi Arabia and Russia. In 2021, 6% of US crude oil imports came from Saudi Arabia, an OPEC member and human rights abuser. Amidst the ongoing global energy crisis, the Biden administration had to beg the corrupt OPEC cartel to increase their oil production. At the same time, 3% of US crude oil imports in 2021 came from Russia.

Germany

While the energy crisis has crippled American’ wallets, they can take pride in the fact that they are not citizens of an EU country. The disastrous lack of realism employed by the European Union in the past several years has led to household electricity prices rising in 2022 in all but five EU member states. One nation, however, stands above the rest as the European champion of egregious energy policy, Germany.

Up until 2010, 22.5% of Germany’s electricity came from nuclear energy. After the 2011 Fukushima disaster, German Chancellor Angela Merkel made the decision to shut down all nuclear power plants by 2023. This decision is a textbook example of a horrific energy policy decision made by a government to appease the woke environmentalist crowd. Nuclear energy, unlike fossil fuels counterpart, is a sustainable source. Additionally, all operating nuclear power plants in Germany were inspected as safe. Ironically, the same year that Germany banned nuclear energy it started importing natural gas from Russia as Nord Stream began operations.

When it comes to national security, the pipeline has been questionable from the get go as it is owned and operated by Gazprom, a Russian state-owned company. Generally, it is not the best practice to conduct business with companies owned by foreign governments, especially one ruled by a ruthless tyrant in Vladimir Putin. Three years before the Nord Stream Pipeline began operating, Germany stood idly by as Russia unjustly invaded Georgia. Since that invasion, Germany continued to place blind trust in Putin as if he were the second coming of Nelson Mandela. The lack of realism demonstrated by Berlin in its Russian policy in the past two decades has finally come to fruition.

Following Russia’s invasion of Ukraine, Germany finally took the initiative to stand up to Moscow. This time however, because of its continued reliance on Russian gas and ignorance towards the Kremlin’s actions, Germany has found itself under Putin’s thumb. The Nord Stream and its successor, Nord Stream 2 have suspended operations because of alleged “leaks.” With household gas prices in Germany rising by 17.7% in the first half of 2022, and an astounding 82% of German businesses viewing current energy and raw material prices as a business risk. it matters not if the leaks were orchestrated by Russia or not. The German citizenry and its economy are suffering with no end in sight.

The pain that German businesses and residents are facing could have been avoided if Germany had not recklessly stopped the nuclear energy industry and placed blind trust in Russia. The mess made by Chancellor Merkel has put current Chancellor Olaf Scholz in a precarious position. Germany was on track to reach its goal of shutting down all nuclear power plants by 2023, until Scholz responded, and rightfully so, to keep the three remaining nuclear power plants in operation until next April. However, the damage has already been done. Currently, nuclear power provides only 6% of German electricity, compared with the 22.5% figure in 2010.

The Future

The US shouldn’t be reliant on Saudi Arabia and Russia for energy production in any manner. By canceling geopolitically relevant energy projects such as the Keystone XL pipeline, the US has compromised its national security.

Reflecting on the fallout of its catastrophic pro-Russia energy policy, Germany must prioritize its sovereign energy production moving forward. Perhaps if the German government had continued to encourage domestic nuclear energy production in the past decade, the energy crisis that German citizens and businesses are experiencing could have been mitigated.

However, with an issue as important as energy policy, vilifying the past can only do so much in creating a brighter future in the West. Instead, policy makers must enact market-oriented strategies that limit regulation and taxes, putting national sovereignty and domestic citizens first to create a realistically sustainable future that considers all stakeholders.

Author

  • Kyle Fowler

    Kyle Fowler is an American university student pursuing a business degree at Indiana University in Bloomington, Indiana, United States. He is passionate about discussions surrounding fiscal policy, monetary policy, and individual choice. Kyle is the spring 2022 intern with the Austrian Economics Center.

The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.

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