IEA offers practical energy solutions
While the West has yet to commit to a 'New World Order'
In the past week, gas prices have started to slightly level off in the U.S. and Canada, but it is far too soon to know if another spike is just around the corner. Households around the world are or already have reached their breaking point. Individuals and nations alike cannot realistically consider food and energy concerns independently. Russia’s actions have inextricably linked the two in what could very well be a dangerous global crisis of impending domestic upheavals as the West continues to not escalate a war that economic sanctions may not subdue.
As reported last week, global food prices have and will continue to rise, with a significant chance of bread/energy riots erupting. The protests in Madrid over the weekend are just one example. In Lebanon, no new orders of wheat have been placed since Russia invaded Ukraine, and their current supply is incapable of matching growing demand. At the extreme, Sudan unfortunately may be a sign of the worst to come as nearly 50% of their population could be food insecure by the end of the year.
When the world financial system was at the brink in 2008, no less than 40 countries had riots due to increased food and energy prices. And we are accelerating to that critical point once again.
The West’s partners do not act like friends
There are not a lack of potential solutions to address food and energy concerns. In last week’s article, several solutions were proffered to address food insecurity and more solutions continue to be offered. As mentioned in this post’s title, the International Energy Agency recommended 10 concrete methods by which the West could immediately reduce their reliance on Russian energy sources and better prepare itself for the net-zero economy it has touted for years.
Yet while NGOs and others continue to suggest how we can avert real short-term pains, leaders like the UK’s Boris Johnson are making impassioned pleas with Saudi Arabia to release more oil into global markets. Saudi Arabia, as a very good friend, will indeed increase production via state-owned Saudi Aramco. Over the next five years.
Energy prices are at 14-year highs and rather than help ease Western society’s household burden, Saudi Arabia will reap the benefits of inflated oil prices. And just two days ago, President Biden approved sending Saudi Arabia patriot missiles without any guarantee more oil would be pumped today. Saudi Arabia knows the West is beholden to defense contractors and after repeatedly being (justifiably) criticized by Westerners for their human rights record, Saudi Arabia has no incentive to change their behavior.
On a similar note, the Chinese Ambassador to the U.S. Qin Gang appeared on Face the Nation Sunday. The exchange between him and host Margaret Brennan was to put it mildly, incredibly uncomfortable to watch. But two key points came from that exchange which is confirmed by multiple developments in the past few weeks.
Russia and China have good relations, and as such China is firmly against condemnation and sanctions against Russia and will not in any way state Russia invaded Ukraine.
Ukraine is the West’s primary issue, not China’s.
As much as China claims to push for diplomacy, it uniquely stands as possibly the only nation with the potential to broker a peace deal between Russia and Ukraine if those two parties do not do so on their own. After the worst pandemic in a century spread from China, it would seem this Eastern European conflict would be the ideal scenario for China to claim global prestige. The Olympics was shrouded in controversy, especially as the West continuously condemned ongoing genocide in China. Yet, China and in their own way Saudi Arabia could not care less about being seen favorably in the West’s eyes. If diplomacy ‘works best’ from a position of strength, it seems only logical these 2 nations could extract ‘wins’ for the long-term by helping short-sighted Western political leaders avoid domestic upheavals and electoral shifts. Their seeming reluctance to do so (based on Western news reports) makes it difficult to not think nations like China and Saudi Arabia are bought into a phrase that has become the modern equivalent of ‘the new normal’ - ‘a new world order.’
A New World Order
Earlier this month, Vice News painted ‘a new world order’ as a conspiracy resurrected by right-wingers and perpetuated by fringe narratives on social media. Of course, as even the article obligatorily points out, the phrase ‘new world order’ has appeared in large media outlets, like the Boston Globe, Washington Post and the New York Times.
In President Biden’s closing remarks at the White House’s Business Roundtable’s CEO Quarterly Meeting on Monday:
And now is a time when things are shifting. We’re going to — there’s going to be a new world order out there, and we’ve got to lead it. And we’ve got to unite the rest of the free world in doing it.
To be clear, how conspiracy theorists and the President is using the phrase ‘new world order’ have significant differences. Yet, without spelling out every nuance, take ‘the new normal’ phrase as an example - there is no singular definition of that phrase to this day, why that phrase had to be used and in what context it makes sense to use. Once in the public lexicon, it takes on a life of its own. What’s revelatory about the ‘new world order’ phrase is it clearly had a life, at least conceptually, prior to the Russian invasion.
CNN back in January 2022 posted an article, “The end of the world order as we know it” and wrote about how America’s influence and power in various parts of the world - Eastern Europe, Western Europe, Asia and the Middle East - was being tested. In the same article, CNN’s Russia expert and former CNN Moscow bureau chief, Jill Dougherty expressed:
[Putin’s aggression threatens] the entire U.N. system and imperil the arrangements that have guaranteed member states' sovereignty since World War II.
On Fox News the day after CNN posted that article, Rep. Michael Waltz (R-FL) said:
A lot of Americans are asking, and I think rightly so, why is Ukraine in our interest?.. in the opening ceremony of the Olympics, you're going to see Putin and Xi standing side by side talking about a new world order. Why should Americans care? Well, we shouldn't just stand by and allow the old Soviet Union to get put back together again. And Putin has stated since 2005 that the greatest tragedy of the 20th century was the demise of the Soviet Union. He fully intends to put it back together. He's doing it on Obama and Biden's watch. And they intend to challenge the United States side by side with China.
Both of those posts are from a month prior to the Russian invasion. And I would be remiss to not point out that Rep. Waltz sits on the House of Representatives Armed Services Committee and is the ranking member on the Subcommittee on Readiness.
Russia amassed over 100,000 troops on Ukraine’s border back in November 2021. The following month, President Biden led the Summit for Democracy with leaders from 100 governments to pledge support for a global democracy renewal that will fight authoritarianism and corruption while protecting human rights. If you are not familiar with the Summit for Democracy and who attended, you may have guessed Russia, China and Saudi Arabia were not present.
The changing landscape
As reported in Reuters this week in regards to whether Russia will stop at Ukraine:
In early February, China and Russia issued a powerful joint statement rejecting NATO's expansion in Europe and challenging the Western-led international order.
Direct confrontation between NATO and Russia could touch off a global conflict.
"We have reached a turning point," said retired German general Hans-Lothar Domroese, who led one of the highest NATO commands in the Dutch town of Brunssum until 2016.
"We have China and Russia acting in concert now, boldly challenging the United States for global leadership ... In the past, we have been saying deterrence works. Now we have to ask ourselves: Is deterrence enough?"
This partnership could be augmented by what appeared in the Wall Street Journal last week - Saudi Arabia and China are actively seeking to strengthen their relationship (with oil to potentially be purchased in yuan) as U.S.-Saudi Arabia relations continue to strain.
While Russia continuously claims to be ready to negotiate with Ukraine and has at least 3 rounds of peace talks, it is obvious the war will continue as long as Russia chooses. Ukraine, as admirably as they are fighting with the support of the West, is overmatched. Russia made a choice to send less than 200,000 troops and to not send in their vastly superior air force at the outset. Russia had to know asking Ukraine to surrender was a nonstarter and is indicative of a plan to only accept a ‘peace’ that was predetermined, or at the very least, clearly in Russia’s favor.
How does this relate to energy solutions?
If the war in Ukraine was quick as Russia likely thought possible or potentially short (< 3 months) as Western leaders may have believed without saying the quiet part out loud, life can continue very much as it was if the West bears some hardships now. Why accelerate a clean energy transition today if oil reserves and partners can help temporarily relieve the burden which should dissipate when the war is over?
The IEA suggested in their 10-point plan that Western nations increase their wind, solar, bioenergy and nuclear power production, recommend changes to how households consume energy and devise governmental responses to gas storage and energy efficiency. Though these changes purportedly could cut oil demand by 2.7 million barrels a day, the plan on some level assumes the West is aware that how the world operated before the Ukrainian invasion will not be true going forward.
Nations like Russia, China and Saudi Arabia participated in international organizations - UN, WTO, IMF and others - and saw how international edicts were determined and enforced. Despite their rhetoric, they do not seem to value or respect those international norms as they did prior. And before Ukraine was attacked by Russia, there is significant evidence that Western leaders sensed this is how those nations felt.
If those 3 trade partners are no longer part of the Western alliance (or whatever this group of nations would be called), then the IEA’s 10-point plan should be only 1 piece of a much larger plan rather than a list of suggestions that are innovative relative to how some Western governments are acting.
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