A cursory review of recent media headlines reveals a sea change for analysts and commentators on energy sector issues. The baseline over the past three or four decades has been a relentless stream of articles defaming, belittling, and demonizing the fossil fuel industry as responsible for “planet destruction.” to the Greta Thunberg. After the Russian invasion of Ukraine, it seems that we are at a crossroads of global importance:

Reuters (28 February^and): Nuclear, coal, LNG: “without taboos” in the German energy volte-face

Reuters (13 March): German finance minister open to new oil and gas drilling in the North Sea

The Times (UK, March 14^and): Plan to keep coal-fired power plants open

Express

EXPR
(UK, March 20): Boris Johnson hints at return of fracking as he promises to ‘take back control’ of energy

CNBC (US, March 9^and): US Energy Secretary Granholm calls on oil and gas companies to increase production

How the world of energy has changed

My God, how the world has changed! From a constant barrage of calls to end fossil fuels and “transition” to “renewable fuels” such as solar, wind and batteries (but not nuclear) that flooded the headlines of media for many years, leading advocates of Western Europe’s “Green Deal” (and Green New Deal in the US) and “Net Zero by 2050” are now calling for coal and nuclear power plants to keep running, revive oil and gas drilling in the North Sea, allow hydraulic fracturing in the UK and urge US oil and gas companies to “produce more”. US Energy Secretary Jennifer Granholm told a gathering of oil and gas companies at a recent conference in Houston, Texas

We are on a war footing – an emergency – and we must scale up responsibly in the short term [oil and gas] supply where we can right now to stabilize the market and minimize damage to American families…. And that means you are producing more right now, where and if you can… So yes, right now we need oil and gas production to increase to meet current demand…

It comes from a key member of an administration that, upon taking office, immediately declared a regulatory war on US oil and gas producers. Whether it’s shutting down or blocking new oil and gas pipelines, stopping oil and gas drilling on federal lands, in Alaska and the Gulf of Mexico, or pushing banks to stop funding investment oil and gas companies, the Biden administration has made the “fight against climate change” its central objective. When that led to a drop in the polls for President Biden as gas prices at the pump hit multi-year highs, the Biden administration resorted to imploring oil producer group OPEC+d increase their production. This perverted state of oil diplomacy has worsened as the administration looks to Venezuela and Iran as potential sources of increased oil supplies.

For energy analysts unconvinced by modeled “climate emergency” predictions and wishful thinking about unreliable renewables, the pre-conflict expectation in Ukraine was one of slow warfare. wear between two forces. On one side is the juggernaut of the climate-industrial complex that has been in the making for decades, coalescing a confluence of elite interests and organizations in the West. These include militant environmental NGOs spreading climate alarmism, renewable energy lobbies pursuing favorable government mandates and subsidies, and international organizations such as the International Energy Agency and the Environmental Protection Panel. United Nations intergovernmental climate change experts who spend more time advocating for a radical global energy agenda than critically analyzing trade-offs and making objective policy choices for human well-being.

On the other side of the war of attrition are the common people – the incoherent mass of the working poor and aspiring middle classes who cannot afford to signal virtue – who are increasingly inflicted by escalating energy prices and the higher cost of living. This is becoming increasingly evident in countries like Germany and the UK, which are at the forefront of transitioning to “net zero” emissions by 2050. The impact of high fuel prices unaffordable electricity, heating and transport costs on Europe’s poorest households has become increasingly evident during this winter’s energy crisis caused by dependence on Russian energy imports, surging natural gas and oil prices and an extended period of little or no wind causing renewable energy supplies to plummet.

A semblance of energetic realism

The invasion of Ukraine changed all that. Suddenly, a refreshingly energetic realism dawned on Europe’s political elites, especially on the German Green Party which is a major component of the governing coalition. Economy Minister Robert Halbeck said “there were no taboos in the deliberations” and was considering options to expand operations of the country’s coal and nuclear power plants and import liquefied natural gas ( LNG). Halbeck is a member of the Green Party for which climate purity is a central tenet of his political faith. Repeating the “no taboos” refrain, even Frans Timmermans – the head of the EU’s Green Deal and the main proponent of Germany’s huge cost Energiewende policies forcing the transition to a “low carbon future” — said countries planning to burn coal as an alternative to Russian gas could do so in line with EU climate goals. Similarly in the UK, Prime Minister Boris Johnson has “made clear he is giving Britain the green light to use its gas and oil resources in the future, with insiders suggesting a U-turn to enabling hydraulic fracturing is coming”.

By pushing energy security to the center of the political agenda, the war in Ukraine has brought a semblance of energy realism back into popular discourse. Yet the “climate emergency” narrative is far from dethroned in elite political circles. Speaking to an audience via video link on Monday, UN Secretary-General António Guterres highlighted how Russia’s invasion of Ukraine threatened to become a huge setback for the concerted effort to accelerate the climate action. “Countries could become so caught up in the immediate fossil fuel supply shortfall that they neglect or impose policies to reduce fossil fuel use,” Guterres insisted. “This is madness.”

While many might disagree on exactly where this “madness” lies, Mr. Guterres reflects the same kind of tone-deafness exhibited by John Kerry, President Biden’s climate envoy, who lamented that the invasion of Ukraine distracts people, including Russian President Putin, from “fighting climate change”. In another interview, he said the war was “very hard on the climate agenda, there’s no doubt about that.” These comments show that political elites are ideologically blinded not only to the real everyday problems of ordinary people. They are also blind to the fact that it is the very anti-fossil fuel policies in Europe and the United States that have helped Russia gain such a stranglehold on Europe’s energy supply.

Western oil and gas companies under attack

Western oil and gas companies that have been belittled and vilified for decades with social stigma and ESG restrictions are now under attack for not increasing production fast enough! Slightly ironic, energy author and journalist Terry Etam describes the message from Western political leaders to the industry as follows:

Hydrocarbon industry, shut it down and increase production, we know it’s easy and you’re choosing not to. We don’t want to hear about you, you have no future and you are outdated dinosaurs still destroying the planet. But due to an unforeseen war, we just need to use you for a few more years, and if you don’t immediately increase production, it means that you simply don’t support the Ukrainian people.

As international oil and gas companies such as BP and Shell bustle about deconstructing their business models in favor of renewable technologies and the “energy transition” to satisfy their activist stakeholders, Saudi Aramco doubled its 2021 bottom line to 110 billion dollars, allowing it to issue bonus shares. With profits expected to be even higher in 2022, the national oil company plans to increase upstream capital spending by $40 billion to $50 billion to further expand production capacity and cement its role as a global swing supplier. . According to her, the world, especially the developing countries which represent 80% of the world’s population, will need its oil for decades to come.

The Russian-Ukrainian war has caused much bloodshed, ruin and tragedy for millions of displaced people. He also brought the green chickens home to roost.