Monday, February 21, 2022

Energy shortages

European Union countries are only luke-warm in joining the US against Russia because they are so dependent on Russia for oil and gas. Many people suggested early on that the US crank up its production of oil and gas and convince Europe to buy from the US. Instead the US gave the go ahead on a new Russian natural gas pipeline while reducing US production of natural gas and oil. Later when gasoline prices started to rise causing votes to become more important than climate change, the US decided to increase production of fossil fuels. Oil companies found they liked the new high price for oil and are reluctant to increase production. This back and forth on energy policy is disruptive to the business and it may take a while to increase production. Looking back this was a mistake and it encouraged Russia to meddle in Ukraine. Germany's new chancellor Scholz understands that if energy from Russia is disrupted that the price to German consumers will quickly rise and just like here in the US the people will not be happy. He now must risk his position to line up against Russia and like most politicians his most important priority is to get re-elected.

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