05/12  closing prices/ revised 05/16/2022 11:38 GMT  | 05/12   OPEC Basket $112.37  +3.34| 05/13    Mexico Basket (MME)  $106.36  +4.22| 03/31 ▲  Venezuela Basket $88.12  (Estimated OPEC) | 05/13   Brent July BRN00 $111.55  +4.10| 05/13 WTI  Texas Intermediate Jun CL00  $110.49  +4.36 | 05/13   Natural Gas May NGM22  $7.663  -0.076| 05/13 Gasoline Jun RBM22    $3.9578  +0.1661 |  05/13 Heating Oil  Jun  HOK22   $ 3.9212  -0.0051 |  06/13  Active U.S. Rig Count (Oil & Gas)  714  +9 | 05/16   USD/MXN Mexican Peso  $20.1013  Live data | 05/16  EUR/USD $1.0430  Live data | 05/16  USD/Bs. (Bolivar)  $4.77050000  |  –        05/12  closing prices/ revised 05/16/2022 11:38 GMT  | 05/12   OPEC Basket $112.37  +3.34| 05/13    Mexico Basket (MME)  $106.36  +4.22| 03/31 ▲  Venezuela Basket $88.12  (Estimated OPEC) | 05/13   Brent July BRN00 $111.55  +4.10| 05/13 WTI  Texas Intermediate Jun CL00  $110.49  +4.36 | 05/13   Natural Gas May NGM22  $7.663  -0.076| 05/13 Gasoline Jun RBM22    $3.9578  +0.1661 |  05/13 Heating Oil  Jun  HOK22   $ 3.9212  -0.0051 |  06/13  Active U.S. Rig Count (Oil & Gas)  714  +9 | 05/16   USD/MXN Mexican Peso  $20.1013  Live data | 05/16  EUR/USD $1.0430  Live data | 05/16  USD/Bs. (Bolivar)  $4.77050000  |  –        05/12  closing prices/ revised 05/16/2022 11:38 GMT  | 05/12   OPEC Basket $112.37  +3.34| 05/13    Mexico Basket (MME)  $106.36  +4.22| 03/31 ▲  Venezuela Basket $88.12  (Estimated OPEC) | 05/13   Brent July BRN00 $111.55  +4.10| 05/13 WTI  Texas Intermediate Jun CL00  $110.49  +4.36 | 05/13   Natural Gas May NGM22  $7.663  -0.076| 05/13 Gasoline Jun RBM22    $3.9578  +0.1661 |  05/13 Heating Oil  Jun  HOK22   $ 3.9212  -0.0051 |  06/13  Active U.S. Rig Count (Oil & Gas)  714  +9 | 05/16   USD/MXN Mexican Peso  $20.1013  Live data | 05/16  EUR/USD $1.0430  Live data | 05/16  USD/Bs. (Bolivar)  $4.77050000  |  –       

It’s Not Just High Oil Prices. It’s a Full-Blown Energy Crisis. -Helen Thompson

In Peru, protests that began in March against rising fuel and fertilizer costs spread throughout the country.
(Sebastian Castaneda/Reuters)

By Helen Thompson

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.

Then, one geopolitical era ­— with the United States as the world’s largest oil producer and Britain as (when Washington let it act) the military guarantor of Western energy interests in the Middle East — unraveled. As the Arab states seized control of production and prices from the seven big Anglo-American companies that had controlled oil in the Middle East for decades, Western economies stagnated under the inflationary pressure, supercharging protests, strikes and electoral realignments across Western democracies.

What lies ahead promises to be more disorderly — and ultimately transformative — than the events of the 1970s. This is, indeed, a bigger disruption. During the geopolitical upheaval of the 1970s, the physical supply of oil from the world’s reserves was never the issue. Now, with Asian energy demand vastly higher than it was, it is. And demand for gas and coal may well also exceed worldwide output over the next few years. We appear to have entered a time when countries will have to compete for the world’s remaining accessible fossil fuels and governments openly choose geopolitical alliances to secure them.

Look to the Mediterranean, for an example. Europe’s decoupling from Russia will intensify the geopolitical tensions over gas around the sea. In the eastern Mediterranean, Turkey resents its exclusion from energy projects and has been increasingly confrontational in asserting its interests. When Turkey struck a deal with Libya in November 2019 to claim new maritime economic boundaries for itself in the eastern Mediterranean, European Union leaders denounced the agreement as a violation of Greek and Cypriot sovereignty and incompatible with United Nations law. Now the route for a pipeline to bring eastern Mediterranean gas to Europe is causing tensions, not just between Turkey and its neighbors, but also within NATO.

On the other side of the Mediterranean, Algeria is another potential energy source for Europe. But this, too, comes with geopolitical complications: The state-owned Algerian energy firm Sonatrach announced last month it might increase gas prices to Spain after Madrid withdrew support for Algeria in mid-March over the longstanding dispute between Algeria and Morocco over the Western Sahara.

Less Russia also means more trouble in the Middle East. Without Russian help, another Iran nuclear deal becomes less likely, even as Moscow’s war amplifies all of Mr. Biden’s incentives to restore Iran’s energy exports. Rather than breaking with Russia, Arab oil producers appear to have doubled down on OPEC Plus, the world’s new oil cartel with an implicit anti-American bent. The shale boom forced Saudi Arabia to seek wider alliances, including with Russia. Now, as tensions between Russia and Saudi Arabia over Syria and Yemen lessen, the Saudis will prioritize managing their competition with Russia over China — the world’s largest oil export market — and the two states’ shared interests in a nondollar payment system.

It’s not just international politics that are being shaped by the sustainability of present energy consumption. Domestic politics are being shaken up, too.

By damning oil companies that aren’t ramping up production, Mr. Biden has decided to privilege the voters desperate for lower immediate prices over the Democrats who insist the climate crisis should remain the priority. For the European Union, the fact that European consumers are filling Moscow’s war coffers has forced unpalatable ethical issues to the surface. As the prime minister of Italy, Mario Draghi, asked Italians: “Do you prefer peace or the air conditioning on?”

But the reality is, as Robert Habeck, Germany’s vice chancellor and economic minister, acknowledged before departing for a trip to gas-rich Qatar last month, there is no “value-based” fossil fuel energy strategy for European countries other than importing all their energy from the United States, Canada or Australia, which is impossible.

In Europe, an innocence about energy has been shredded and won’t readily be restored. There, the Western political taboo about talking about reducing energy consumption by means other than greater efficiency is morally exhausted. It remains to be seen whether in the United States, ghosts of President Jimmy Carter’s failed exhortations for sacrifices to personal comfort (wearing sweaters indoors, for instance) as a way to restore American energy independence will prove any less fleeting. Thanks to shale, the United States is the world’s largest oil and gas producer, rendering the country’s energy politics vastly different from that in most European countries, where foreign-energy dependency has been an uncomfortable fact of life for more than a century.

What does this mean for the most existential geopolitical issue of all — climate change?

Back in 2019, an energy transformation to address the climate crisis appeared on the horizon. Across the world, more new renewable power was added than ever before, and sustainability-minded investors looked to pour capital into green energy innovation. Several Group of 7 governments passed legislation to establish legally binding net-zero targets for 2050.

But over 2021, as prices rose, optimism dissipated. Mr. Biden’s signature climate change bill stalled in Congress. In Britain, the Committee on Climate Change set up to advise Prime Minister Boris Johnson’s government reported that the country was nowhere near hitting its transition targets because “the policy is just not there.” As much of Europe experienced low winds in 2021, it became clear that there was still much work to be done to operate electricity grids based on renewables. There were a number of factors, but the overall impact was the same.

Now the momentum has changed again. For the green transition, the renewed public awareness that the supply of hydrocarbons does not take care of itself, even as Western governments promise to curtail their use, is — paradoxically — a step forward. If governments and citizens are serious about transitioning away from fossil fuels and toward greener energy, a necessary transformation that requires nothing less than changing the material basis of modern civilization, then they will have to admit that oil, gas and coal — the energy sources of the past, on which we continue to rely — can’t be taken for granted. Their extraction and use are inseparable from the difficult work of politics. That is evident today. Let’s hope we can remember it in the future.

___________________________________________________

Helen Thompson (@HelenHet20) is a professor of political economy at the University of Cambridge and the author of “Disorder: Hard Times in the 21st Century.” Energiesnet.com does not necessarily share these views.

Editor’s Note: This article was originally published by The New York Times, on April 23, 2022. All comments posted and published on EnergiesNet.com, do not reflect either for or against the opinion expressed in the comment as an endorsement of EnergiesNet.com or Petroleumworld.

Original article

Use Notice: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of environmental and humanitarian significance. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml.

energiesnet.com 04 25 20022

Share this news
CopyRight©1999-2021, EnergiesNet.com™  / Elio Ohep – All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission fromPetroleumworld or the copyright owner of the material.

Leave a Comment

Your email address will not be published.

Scroll to Top