Politics, the Economics of Oil, and Climate Change

A big change blown in by the winds of war

Photo by Jason Blackeye on Unsplash

I am not an economist, by a long shot. I am a close observer of events, especially those in my title, which, notably, does not mention war, though it figures directly into the same dialog.

War is an accelerator.

Assuming, and I have to assume this as it is directly related to our collective sanity as a species, that we do not blow ourselves up with nukes, there is an interesting acceleration of the forces of change taking place right now.

Aside from those nukes, Putin has only one lever to use against the world and it is one that we can overcome: fossil fuels, i.e. natural gas and oil. The EU let themselves become far too dependent on Russia’s pipelines, and prior to this war in Ukraine, Putin likely thought that dependence would give him the ability to divide NATO, as countries peeled off economically from sanctions to ensure the oil kept flowing.

A logical scenario, if Putin’s blind fantasy of an imperial Russia was backed up by good intelligence and competent military leadership. Instead, the war he is needlessly waging without any justification may prove both the economic end of Russia’s power for decades to come, and could drive a big push into alternative energy on a serious level.

I am talking about modern nuclear plants, hydro, and geothermal for sustainable steady state energy, and wind and solar for efficiency (both are considerably cheaper than the steady state energy sources).

Unfortunately, even with the horrible weather disasters taking place the world over, disasters that affect all humans the same regardless of economic status, we have not built any real momentum or fear over climate change. This despite the planetary scale of it, its momentum, and the degree of change a few inches of sea level rise will create.

Any war pales in comparison. But this war has made many politicians, of all stripes, reconsider the role of energy as an economic weapon. The effect of this should be a massive rethinking and re-engineering of the world’s power grid to eliminate the value of Russia’s only real monetary asset.