Mike Russell

Mike Russell

Mike Russell believes that individual freedom is the foundation of American excellence, that small business is the engine that drives economic...Full Bio

 

The World's Push To Be Green Gave Putin More Power

Special Climate Envoy John Kerry is worried about Russia's invasion of Ukraine because it will distract from climate change. Kerry said, “I hope that President Putin will help us stay on track with respect to what we need to do for the climate.”

Russia is an oil and gas state, producing $219 billion towards Russia's gross domestic product, about 15% of its GDP. More importantly, Europe receives 40% of its natural gas from Russia. More than half of Germany's natural gas comes from Russia. As Europe has moved further and further from oil and gas production it forces them to rely more and more on Russia. From CNBC:

Also, the EU has been reducing its dependence on coal to reach its climate goal of achieving carbon neutrality by 2050 and cutting emissions by at least 55% by 2030. Since 2012, the EU has decreased its coal power generation by about a third, according to the Directorate-General for Energy for the EU.

While the EU has been trying to ramp up its production of renewables, like wind and solar, that process is slow.

CNBC even quotes a research scientist from MIT, Tim Schittekatte, "in terms of foreign suppliers, Russian gas was just the cheapest. Rather than diversifying suppliers, routes to import Russian gas were diversified." Which gives Russia leverage. Putin is using that leverage now, knowing Europe needs Russia's oil and gas. The world still runs on oil and gas to meet our energy needs. Here in the U.S., the Biden Administration denies new leases to drill for oil and gas and has canceled construction of the Keystone XL pipeline.

Oil and gas needs are based on supply and demand. There's a constant worldwide demand, which means the world needs supply. Supply in which Russia produces a good portion of. Russia is the world's third-largest oil producer and second-largest natural gas producer. Blocking Russia from selling oil and gas would only increase prices around the world because it would cut so much supply. There are no short-term solutions to increasing the supply quickly enough to thwart the price increases.

That's Putin's leverage.

Put aside climate change for a moment and what the world should do to combat it. As great as it might be to have abundant wind and solar energy powering America's energy sector, that's not reality right now. The need for oil and gas matters right now. And we've backed ourselves into a corner because of it. Hurting Putin and Russia by sanctioning their oil and gas production hurts the world's collective economy making energy cost more. Putin knows this and has now Putin has started a war.


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