Last week Germany's 2nd largest utility RWE announced it's selling its entire oil and gas ops. to Russian oligarchs. Western energy disarmament is proving suicidal-William Tucker, Am. Spectator

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3/21/14, "The Roots of Russia’s Revanchism — Energy," William Tucker, American Spectator. William Tucker is news editor for RealClearEnergy.org. 

"Western energy disarmament is proving suicidal."...
 
"Now flash-forward to 2014. Russia is the world’s third largest oil producer, behind Saudi Arabia and the U.S, but coming on fast. When Putin came to power in 1999, the country was earning $41 billion from oil sales and Boris Yeltsin had just defaulted on a $40 billion debt. Today they earn $410 billion. Russia is also the second largest producer of natural gas, behind the U.S., and holds the world’s largest reserves. Europe now depends on Russia for 30 percent of its natural gas supplies and Gazprom is building a pipeline to the Pacific Rim where the market is even more attractive. Altogether, oil and gas exports earn Russia $160 billion a year and cover 60 percent of the national budget.

Moreover, the two strongest economies in the Western alliance — Germany and Japan — are both crippling their economies by abandoning nuclear power. Japan spent $68 billion on gas imports last year, more than half its $112 billion trade deficit. Germany is doing even worse. In a fatuous effort to substitute unreliable wind and solar energy for always-available coal and nuclear, it is driving its utilities to ruin. Last week RWE, Germany’s second-largest utility, announced its first annual loss since the founding of the German Republic in 1949. The company is hammered by grid regulations that require it to accept wind and solar whenever they are available. This means ramping coal plants and reactors up and down at a moment’s notice — virtually impossible — or running them for long intervals without being paid. On top of this comes special fees to cover the higher costs of renewable electricity. Last week, in a little noted transaction, RWE announced it is selling its entire oil and gas operations to — you guessed it — Russian oligarchs Mikhal Fridman and German Khan. No wonder Putin is feeling his oats these days.

The West’s unilateral disarmament over energy is reminiscent of nothing so much as the fatuous behavior of Western Europe during the interval between World Wars I and II. While Neville Chamberlain was excusing his people from entering “a quarrel in a faraway country between people of whom we know nothing,” France was disintegrating under Leon Blum’s Popular Front where under that odd combination of proletariat obstinacy and aristocratic insouciance the country dithered over redistribution of income and inconsequential social issues until it was a shell of the nation that had resisted the Germans for four years in 1914. When Hitler invaded in 1940, it lasted less than six weeks.

Now Europe is repeating the pattern. By backing away from nuclear and refusing to frack, it leaves itself with no other choice than Russian gas. Japan, Korea, and Taiwan are also spooked on nuclear and are increasing their reliance on imports. Granted the United States — at least the middle part of the country — is in the midst of an energy renaissance. But sharing this bounty with our allies may be a different story. The Department of Energy is approving exports terminals at a glacial pace and there is opposition from Congressional Democrats who still haven’t absorbed David Ricardo’s 1817 Principals of Political Economy and Taxation — not to mention environmentalists, who, with their usual upside-down logic, are arguing that the best way to counter Putin in Europe is to keep the gas to ourselves. And of course we haven’t built a new reactor from the ground up in 30 years.

Russia and China, meanwhile, are rapidly pushing ahead with nuclear technology. Russia is mounting small modular reactors on barges to float into remote Siberian villages. China has 20 reactors under construction and is about to explore thorium — a nuclear fuel that most engineers believe to be superior to uranium. Within a short time, Russia and China could be building reactors all over the world — as Russia is currently doing in Iran. Ironically, this will leave the two countries leading the world in the best technology for reducing carbon emissions, nuclear energy. The energy gap is only likely to widen."...


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