Your Survival Guy uses a combination of firewood and propane to heat his New Hampshire log cabin. Prices for both are way up, as I told you about firewood here, and as you can see below, propane which has jumped compared to last winter.
Energy prices are being pushed up by incessant regulation and restrictions on the energy industry by European and American politicians. Their actions are not lowering overall worldwide emissions, but instead just relocating them, and the jobs and GDP that go with them, to China. Holman W. Jenkins writes in The Wall Street Journal:
Hard to believe, but politics sometimes exhibits a pull toward the rational, especially when voters find it difficult to pay their bills, heat their homes and keep their jobs.
That’s happening in Europe now thanks to home-heating and electricity prices up 300% at the wholesale level since last winter. In a quote echoed across the continent, one of British Prime Minister Boris Johnson’s parliamentary allies warned on the weekend of “catastrophic” damage to the government: “Elections are won and lost in people’s wallets.”
Europe’s mess has been framed as a story of many influences—the proverbial perfect storm. But it’s really a story of one thing, coal, plus hypocrisy.
By undiversifying its base-load power supply away from dirty coal while also dumping nuclear, Europe has invited all the consequences you read about: ill-advised reliance on Russian natural gas, frantic bidding wars with China for liquefied-gas shipments, fear of rolling blackouts whenever a French nuclear plant needs maintenance or the wind dies down or the sun goes behind a cloud.
Though firm believers in the risks of man-made climate change, analysts at the commodity research firm CPM Group cogently argue in a recent report that 2022 will be the year when energy and climate realism finally break through:
The gestures governments have been enacting, they write, are “not meaningful in the race to combat climate change.”
The electric vehicles that politicians particularly love to subsidize “will not significantly reduce carbon dioxide output, only shift its location.”
“There are real constraints”—surprise—“to moving toward clean energy industries,” starting with the unwillingness of voters and consumers to pay for it.
Most interestingly, the CPM analysts see a “bifurcation” between China and the rest of the world. Not because China has opted out of lip service to the climate cause, but because China now produces emissions for the world. Europe has conveniently adopted 1990 (when East Germany’s Sovietized heavy industry was about to be shut down) as its emissions baseline. Even so, Europe’s claimed 20% reduction in emissions since then is not merely a drop in the bucket when the world increased its total emissions 50% overall. It’s a bit of fraud since European investors simply relocated their emissions-heavy processes to places outside the European Union.
Action Line: Politicians, just like the executives of major money management firms, want to look good, and use your money to do it. They’re burnishing their own egos, but whether via taxes or your IRA, when you invest in their dreams, they win.
