Tag Archives: political economy

Energy Independence

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Let’s say, arguendo, that the Biden-Harris administration is sincere in its desire to switch America over, entirely, to renewable energy sources. Let’s say, also arguendo, that that’s even a good idea. Former Interior Department Secretary Ryan Zinke had some thoughts that bear on the execution of these premises:

The first two years of the Trump administration, we went from 8.3 million barrels a day [and] declining in just two years to 12.5 million barrels a day, the world’s largest exporter of energy. And it just wasn’t fossil fuels, it was across the board. So fast-forward now; we have Russia and we should immediately ban Russian oil [the Biden-Harris administration finally got around to doing this last Tuesday, albeit with an unspecified effective as of date].

However, the Biden-Harris administration still is begging OPEC to increase its oil output, now talking seriously about lifting sanctions on Iran so as to buy Iranian oil, and adding to that going to Venezuela to “negotiate” for oil from that nation. This is because we no longer have the ability to control our own energy pricing through our own domestic oil and gas production. Paradoxically, Biden-Harris has attacked our fossil fuel industry with greater zeal than it has shown against Russia’s invasion of Ukraine.

All of that is in the name of getting us off fossil fuels and onto “green,” renewable energy sources as quickly as domestic fossil fuels can be eliminated, regardless of the cost to us Americans, financially and politically around the world, and regardless of the current inability of wind and solar to deliver reliable energy, much less in the amounts our economy needs.

Here’s an alternative path to that golden chalice.

Biden-Harris should take the Federal government out of the way of our fossil fuel production industry—oil, natural gas, and yes, coal—and let us produce all of that energy that the market can bear. That will let us return to energy independence.

Biden-Harris acolytes always point to the 9,000, or so, oil leases that oil producers already own and aren’t exploiting. Biden-Harris acolytes, along with Biden-Harris himself, carefully ignore the fact that those leases require exploration and development of actual oil locations and that the Biden-Harris administration is sitting on existing permit applications to do that and refusing to accept (or slow walking, which functionally the same) new permit applications. Biden-Harris acolytes, along with Biden-Harris himself, also carefully ignore the usurious royalties Biden-Harris has decided to charge on new extractions–new oil and gas drilling/fracking. Biden-Harris acolytes, along with Biden-Harris himself, also carefully ignore the administration blocks on pipelines–and blocks on the separate permits needed to transport oil and gas via those pipelines (and via train in the case of oil)–and on storage facilities so that oil and gas can be delivered to refineries, and they carefully ignore the time required to obtain rights of way for those pipelines even were on permitted [sic] to be built.

Oil and natural gas producers also are wary of the Biden-Harris administration’s fickle performance with regard to its fossil fuel regulating regime and are hesitant to commit the several millions of dollars that are required up front just to get started when that fickleness is too likely to block an effort after those millions have been committed.

Letting our nation return to energy independence will, tautologically, make us not dependent on other nations for our energy—not our enemies, not our allies, not our friends.

That will put us—our free market economy and its private enterprises—back in control of our energy production. That production control would extend to production from all sources, including renewable (and nuclear, which can be quasi-renewable) sources.

That will generate the time and prosperity that then will let us develop the technologies needed to get reliable renewable energy in the industrial quantities we need, without the worsening pollution and expanding carbon footprint (assuming, once again arguendo, that that’s a bad thing) inherent in current production abilities, at a pace that we can afford, and at prices we Americans can afford to pay.

The Collapse of the Ruble

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Much is being made of the collapse of the Russian ruble since the sanctions with which we’ve answered Russia’s invasion of Ukraine went into effect. Here’s the US Dollar-Russian Ruble exchange rate over the last month (as of 6 March 2022):

For context, here is the performance of the ruble against our dollar since 30 January 2012:

The current drop is sharp, but so far, it looks a lot like the drop in the latter half of 2014—when sanctions were going in over Russia’s first invasion of Ukraine and its occupation of Donbas and Crimea, and following which the ruble more or less stabilized into a (very) slow degradation vis-à-vis our dollar.

The current round of sanctions are important, and the further devaluing of Russia’s ruble are important, but history suggests that the exchange rate will once again more or less stabilize without changing Russia’s behavior.

Concrete support for Ukraine remains critical, and that concrete action includes sharply increasing the transfer of arms—including combat aircraft and more capable anti-aircraft batteries than just (but not instead of) Stingers—transfer of offensive weapons, so that Ukraine can drive the barbarians back out of their nation; and a cessation of the Biden-Harris’ constant retreat whenever Vladimir Putin threatens war against us.

There’s Debt, and There’s Debt

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James Jay Carafano speculated on the lessons People’s Republic of China President Xi Jinping is learning from Russia President Vladimir Putin’s invasion of Ukraine. One of those lessons is the coming cost of bailing out Putin’s economy, should he win, lose, or draw in Ukraine, and should Xi choose to do a bailout.

Beijing’s buddy in Moscow is going to be an economic basket case. Even if Beijing wants to bail them out with their patent debt trap, that is going to cost a lot of money—likely more than the Chinese Communist Party can spare. Buying up Russia at fire-sale prices might be more than even Xi can manage.

Not necessarily. The People’s Republic of China and generations of the state of China before it have considered (Russian) Siberia to have been stolen from the Chinese. A few short years ago, Putin and Xi concluded an economic deal that has Russia and the PRC jointly exploiting eastern and southern Siberia’s vast resources, both on the ground (timber) and below it (ores, oil, natural gas, among others), with the vast bulk of the labor being Chinese, and with that Chinese labor (and their families) moving into Siberia to live and do the work.

One way to do the bailout, with its re-formed means of debt repayment, would be to alter the exploitation deal in the PRC’s favor. Sharply alter it.

Either There’s a Deadline, or There Isn’t

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Amazon is pushing the FTC to fish or cut bait (because this is a family blog) regarding Amazon’s proposal to acquire MGM:

Amazon recently certified to the FTC that it had provided all the information requested by antitrust investigators, according to people familiar with the matter. That certification triggered a ticking clock for the FTC that expires in mid-March, the people said. If the commission doesn’t file a legal challenge before the deadline, Amazon could be free to consummate the deal.

However.

The FTC currently has also the authority to unwind mergers and acquisitions after the fact, and to continue investigations pursuant to such post hoc disassemblies even after their nominal clock regarding the merger/acquisition has expired.

That authority means there’s no real deadline, and the government can continue to interfere with private enterprise whenever they take the notion to.

The deadline is a good one, and it should be transformed into a real one: if the FTC does not rule on the matter (itself a questionable government authority, but that’s for another discussion) by a time certain, then the merger/acquisition should go forward unfettered, and the FTC should be required to sit down and shut up. If there’s a real problem with the merger/acquisition, well, we have already on the books perfectly serviceable anti-trust tools.

There’s just no reason for Government to dither and stall on any merger/acquisition or to continue to harass after the fact.

Dangerously Hypocritical

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And dangerous in its own right. President Joe Biden (D), even as he pays lip service to supporting Ukraine against Russia’s invasion of that nation, is conspiring with Russia to let Iran obtain nuclear weapons. Here’s Fred Fleitz, former CIA analyst and ex-senior staffer on the House Intelligence Committee and the National Security Council:

The US has partnered with Russia to get a new nuclear deal with Iran. This includes secret talks with the Russians over the last year and agreements where Russia would hold uranium enriched by Iran and give it back to Iran if a future Republican president backed out of a new nuclear deal.

This is dangerously hypocritical in that Biden is conspiring with one enemy nation to free up another enemy nation in the latter’s effort to get nuclear weapons. The agreement that Biden is so desperate to get back into (with its trivial tweaks) expires, ends sanctions against Iran, and with that expiry leaves Iran with an unrestricted path to nuclear weapons.

Biden’s dealings with Russia in this are dangerous in their own right because Russia is going to give that enriched uranium back to Iran under any circumstance—that uranium is a threat to us and to Israel, and that’s what Russia wants. This is how desperate Biden is to prevent a subsequent President—especially a hated Republican President—from canceling his precious deal: he knows Russia will give the uranium back.

In the end, any agreement Biden might enter into here becomes hard for future Presidents to undo only if Biden submits the deal to Congress for majority votes in each house, which would make the deal a statute, or he submits it to the Senate for ratification as a treaty. Absent those, all Biden’s agreement becomes is an Executive Agreement, which can be undone with the stroke of a pen—just as former President Donald Trump (R) did with the prior failure of an Obama Executive Agreement.

And a future President should cancel such an EA without hesitation, given that Russian return of uranium.