Food and energy will determine the future world order

When Vladimir Putin invaded Ukraine on February 24, he took comfort in two fundamental beliefs. First, that Europe was so dependent on Russian natural gas and oil that it would not seriously oppose a Russian invasion. Second, that by invading Ukraine, which in many ways is the “breadbasket of the world,” he could gain enormous leverage to use for power politics.

Putin clearly miscalculated many key elements in his choice to go to war – Russia’s unforeseen but clearly inferior military capability, Ukraine’s unforeseen but clearly superior will to fight, and Europe’s determination to resist. to another ground war on its soil being key errors, among others. However, he understood that on the 21st Century, food and energy will equal power.

In the United States, this is easily seen by the continued increases in the price of gasoline, now over $4.00/gallon in nearly every state. Less obvious, though no less insidious, is the fact that energy is a key input in every product that is made or in every food that is consumed. All of this leads to inflation, which contributes to the biggest rise in the consumer price index in more than 40 years. With the European Union having decided last week to embargo most Russian gas, this means that the price of gasoline will probably increase even more, further increasing inflationary pressures.

As the Biden administration seeks answers to stem rising costs, it is plagued by its own penchant for governing by wishful thinking, especially on energy issues. “Renewable energy” is nowhere near being able to power the US economy, let alone the entire planet. While the media and politicians often debate whether to increase production by allowing “drill baby drill”, an equally if not more pressing issue is that of distribution. America’s failure to build its network of pipelines means that even if we produced more natural gas or oil, we would almost certainly have difficulty getting it to where it needs to go.

However, delays in building new pipelines for carbon-based energy are only half the story. Our delays in much-needed power grid improvements do not bode well for our ability to capitalize on the expected increase in power generation from so-called renewable sources such as solar, wind and hydro. Simply put, the development of new sources of renewable energy, which will require greater amounts of transmission connections than the existing grid allows, is also delayed because we refuse to appreciate that there is no source of energy or method of transmission that has no environmental consequences. .

At the international level, the energy situation is reshaping geopolitics. Turkey, which under President Recep Tayyip Erdogan has always been very hostile to Israel, recently moved quickly to restore relations with the Jewish state, even faster than Israel would like.

Again, the main reason is energy. Israel, Italy, Cyprus and Greece are moving forward with plans to build a gas pipeline carrying natural gas from the Mediterranean Sea to Europe, and Turkey doesn’t want to be left behind.

Not to be excluded, the United Arab Emirates has also just signed a free trade agreement with Israel, becoming the first Arab nation to do so.

Yet Russia continues to slowly but surely advance into eastern Ukraine, threatening the main grain-producing areas of Donbass, as well as potentially the port city of Odessa itself. Despite severe limitations on Russian gas and oil exports, Russia is likely earning over $300 million a day from energy, effectively fueling the destruction of Ukraine with energy dollars. Already, Putin has made it clear that he will use the prospect of global starvation – by cutting off Ukrainian grain exports – in order to extract political and economic concessions from other countries that support Ukraine’s position in the war. .

So the cycle goes. Energy fuels Russian military adventurism; Russian military adventurism fuels energy and food insecurity; and energy and food insecurity fuel rising food and energy prices, which in turn raise the price of Russian (and other) energy. To break this cycle, the West needs a large dose of energetic realism. But what is also needed is an understanding that good management of fossil fuels, such as the immediate transition from coal to natural gas, actually benefits the environment while increasing our national and international security. While the Biden administration is likely feeling bitten by the many crises hitting almost simultaneously, its own policies have at least exacerbated many of them. Appreciating the importance and connection between fuel and food would be a good way to stop digging and start digging.

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