Joe Boyles
Guest Columnist
Energy production has been the subject for warfare or fueled wars for at least 150 years. The earliest I can recollect is the Franco-Prussian War of 1870. The object then was the Alsace-Lorrain region, which was rich in coal deposits, the dominant carbon fuel of that age. The French held title and the Germans went for it … and won. That fuel source would help generate two 20th Century world wars. Thinking back over the subject, I conclude that there are direct energy wars, like the Franco-Prussian War, where the object is to control an energy source, and indirect energy wars where the war is funded with energy currency. I would say that the warfare being conducted in Ukraine today is an indirect energy war in that Vladimir Putin is funding the war solely with petro-dollars. The only resource Russia can sell today is oil and gas, which is so much more profitable at the current rate of exchange. A year and a half ago at the time of our last presidential election, the price for a barrel of oil was $36. At last count, the same barrel is trading on the worldwide exchange for $126, a 250 percent increase. A good example of direct energy warfare was World War II. The German Army pushed across North Africa and Southern Russia to secure oil fields in the Persian Gulf and Caspian Sea. Without oil, the German war machine would grind to a halt, which is what eventually happened. When the Army Air Force targeted Rumanian oil fields and German factories producing synthetic oil, the war was brought to a rapid end. The Pacific War followed a similar trend. Japan had few natural resources. Their western Pacific attacks in late 1941 were designed to secure the raw ingredients needed by their military – oil, rubber, and tin. The American air and subsurface counterattack in 1944 cut off their war supplies and spelled the doom for Imperial Japan. In 1990-91, the first Gulf War was primarily a fight over energy. Iraq invaded oil-rich Kuwait and threatened Saudi Arabia. The coalition put together by President George H. W. Bush stopped Saddam Hussein in his tracks and booted him from Kuwait. Energy markets were restored by this brief but decisive war. I do my best to avoid absolute declarations in this column, but I’m going to break that trend right now. Joe Biden and his fellow Democrats are (I choose my terms carefully) hostile to the oil and gas industry. In the runup to the last presidential election, Biden said in New Hampshire, ‘We’re going to phase out fossil fuels, and we’re going to hold the oil companies liable for the damage they created, and we’re going to put their people in jail.’ That’s a pretty clear signal of hostility. Democrats have declared war on fossil fuels and their producers. Gone are the days (1938) when an obscure congressman (LBJ) from the Hill Country of Texas would use oil money as a path to power in the Democrat Party. Now, some may argue that what Biden (and other candidates as well) said is merely campaign rhetoric, and he didn’t really mean what he said (after all, who takes a politician at their word), but his first actions, 14 months ago upon taking office, were to hamstring the oil and gas industry, namely to cancel the Keystone XL pipeline, halt exploration for new leases on federal lands and cancel ANWR exploration in Alaska. The oil companies pulled their horns in -- no point in pushing the envelope; the oil and gas isn’t going anywhere; we’ll ramp back up just as soon as a more friendly administration takes office. So, America went from energy independence to energy dependent and up went the price of oil since less was available on the market. Over the next six months, the price at the pump rose by a dollar/gallon or 40 percent, then stabilized until this Ukrainian business further escalated prices. If a weak Biden Administration was not in office today, would Putin still have attacked neighboring Ukraine? We can only speculate the answer to that question, but many, and perhaps the majority, would argue that there would be no war today. We import something like 630 thousand barrels of oil per day from Russia. Keystone, which if left alone to finish construction, would be coming online now and ramping up to produce 870 thousand barrels of oil daily from Western Canadian fields, more than offsetting Russian imports. Further, I don’t think anyone would argue that Canada is a less reliable trading partner than Putin and his rogue regime. I do not see the Green New Deal eliminating the need for fossil fuels for a long, long time (if ever) and certainly not within my lifetime. Should, by some miracle, we give the oil industry the green light to begin exploring and producing again, it will take some time to turn on the spigots, but the impact on energy markets will be instantaneous. The price of oil will drop and so will Putin’s shaky war machine.