The big energy embarrassment

We all know there’s an energy crisis out there, ravaging most of Europe (I am confident Lichtenstein and Monaco are doing well, though I may be wrong), the developing world and, though to a lesser extent, the U.S. and Canada.

We all know this energy crisis has caused a major cost-of-living crisis in many places as it fueled inflation rates last seen in the early 1980s or never.

And we all know governments appear willing to fight the crisis by investing hundreds of billions in more wind and solar generation capacity. Yet in the meantime the same governments are subsidising fossil fuels in their final forms as car fuels.

Many have criticised this approach, with this opinion piece by Bloomberg’s Javier Blas perhaps one of the most eloquently presented. To sum up, instead of discouraging greater fuel use, which would help bring oil prices down, governments are encouraging greater fuel use, which is driving prices higher.

Of course, that piece was written in March and oil prices have come down considerably since then but this is not the point. The point is that governments in Europe and the U.S. are, apparently, doing the opposite of what they say they want gto and will do.

Remember that 10-step plan the IEA graciously gifted to the European Union, which featured encouraging people to use any means of transport but vehicles powered by internal combustion engines? How exactly does lowering the price of petrol and diesel help that, do you think? Of course it doesn’t.

Or how about the Biden administration’s whole approach to The Taming of the Pump? Releasing close to 200 million barrels of crude — the same dirty crude that the same administration wants kept in the ground, eventually. Asking Saudi Arabia to produce more of that same dirty crude. Finally stooping as low as asking the U.S. oil industry to produce more of the same dirty crude.

Some have called it hypocrisy but I’d rather compare it to a cat’s behaviour when it does something embarrassing that it knows is embarrassing, such as missing the ball it’s chasing because of miscalculated speed.

When something like this happens, a cat pretends it didn’t. It is a most amusing sight to behold. With politicians pretending they haven’t done something embarrassing it’s less amusing and more frustrating.

There is a difference between cats and politicians, however, and it is a big one. Cats embarrass themselves inadvertently. They are not natural born clowns (not all, at least). Well, neither are politicians but there is a method to their clowning: votes.

Campaigning for more solar, more wind, more hydrogen, more public transport and biking, and more walking is one thing. Remaining in power is quite another and it appears that politicians on both sides of the Atlantic have retained enough common sense to recognise that their voters are not yet ready to get off their ICE vehicles in massive numbers just because they are told to. Enter fuel subsidies while promoting — and heavily subsidising — EVs.

It is because of votes that politicians are not using the simplest solution to their fossil fuel consumption problem: make them prohibitively expensive. Luckily, or, as it were, unluckily, the solution has forced itself on them.

In Germany, seven out of ten people have cut their energy consumption because of prices. In the U.S., this summer driving season has been considerably weaker than usual and fuel prices are down. In the UK, consumer spending is cratering and so is consumer sentiment, which has hit the lowest on record. And Bulgaria and Hungary are banning exports of firewood. Winter is… well, you know.

The problem with energy consumption, then, is solving itself. Granted, this solution may cost the survival of many businesses that can no longer afford their energy bills, especially as consumer spending shrinks, again thanks at least in part to energy cost inflation.

Granted, it might — and it probably will — cost votes in upcoming elections, because many households also can’t pay their energy bills and after businesses fail the number of these households will grow. Also, the crunch is being forecast to last for another couple of years, at least, so that will be quite a few votes. But the problem is solving itself.

Unfortunately, this solution is revealing certain things that pro-transition governments would much rather remain hidden. And they are doing their best to keep them hidden.

One of these things is the ancient truth that the great majority of people will not do anything unpleasant voluntarily if they can avoid it. “You need to consume less energy to save the planet” doesn’t work half as well as “You need to consume less energy because you wouldn’t be able to pay your bills if you don’t.”

Drinking and driving has not gone down because drivers suddenly believed statistics that show a causal link between heavy accidents and drunk drivers. It has gone down because of fines and other penalties. Smoking has not gone down because smokers have realised the harm. We can lietrally feel smoking is bad for us. It has gone down because of rising cigarette prices and curbs on smoking in public places.

Unlike drinking and driving, however, energy is n essential need. And this is the other, much scarier thing that has been revealed much to politicians’ displeasure, I’m sure.

People — households, businesses, the lot — need energy and they will get it from anywhere they can, emissions or no emissions. We need energy, full stop. If we can have it from cleaner, less polluting sources, that’s swell. If we can’t, we’ll take the coal, the oil, and the gas (if we can afford them).

The very same pro-transition governments are learning this second truth the hard way right now. And because they have no good excuse for using more of every fossil fuel under the Sun, they’re excusing it with my new favourite “It’s only for a little while.”

We all know it’s not going to be for a little while. Fossil fuels will be around for as long as there is no alternative that compares well on all the important aspects simultaneously: reliability, affordability, and availability. I suppose this is one more fact our decision-makers are going to learn the hard way. Unfortunately, the rest of us are going to learn it in an even harder way.