The View from Right Field

Are Investors Being “Un-American” for Not Drilling More?

An article in the Financial Times last Monday quoted Anne Hochstein, President Biden’s international energy envoy, as saying:

“I think that the idea that financiers would tell companies in the United States not to increase production and to buy back shares and to increase dividends when profits are at all-time highs is outrageous.  It is not only un-American, it is so unfair to the American public.

You want to pay dividends, pay dividends.  You want to pay shareholders, pay shareholders.  You want to get bonuses, do that, too.  You could do all that and still invest more.  We are asking you to increase production and seize the moment. …

Thoughts of One and a Half Dozen of the Other*

It’s getting hard to write longer posts these days, so here are some short thoughts that I wish I could develop further but haven’t been able to get to:

• Re Ukraine: Joe Biden is doing a pretty good job, certainly better than either of his predecessors (especially Barack Obama, who wouldn’t even sell antitank weapons to Ukraine after Russia annexed Crimea and invaded Donbas in 2014).  But President Biden could be doing better.  We need to sell/give the Ukrainians more weapons and more powerful weapons.  The best, and quickest, way to end the war is for Ukraine to win.  Let’s help them do it – now.

• Given all the weapons we are shipping to Ukraine, we need to replenish, and build up, our own inventories.  That means spending more money on defense – and committing to do it for an extended period of time.

Helping Europe Stand Up to Putin’s Blackmail – Is Helping Us, Too

Chris Giles wrote in the Financial Times last Wednesday on how Europe could withstand a Russian cutoff of natural gas deliveries this winter.¹  Basically, it requires product substitution (products requiring lots of natural gas in their production should be made elsewhere), more coal needs to be used for power in the short run, Germany needs to not shut down their three remaining nuclear power plants, etc.  Starting in January, ships that can liquify liquid natural gas (LNG) for Germany will go online. 

Which got me thinking: What are we doing to help out in this situation?  If LNG can help, what are we doing to increase our exports of LNG?  Obviously, we should have already been doing things like this, but it’s not too late to start now.  We just need to hurry.  We need to not get caught up in permitting delays and environmentalist objections.  This is a war.  We need to do what is necessary to win it.  It won’t take that long.  Maybe a year or two.  We can still meet our environmental goals.  But right now, we need to not let Vladimir Putin get away with blackmail and intimidation – and war.²
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¹ Chris Giles. “Europe can withstand a winter recession,” Financial Times, August 10, 2022.  (Behind the FT paywall.)
² In any case, anybody who thinks Vladimir Putin cares about climate change is silly.

“I Need Ammunition, Not a Ride.” And Other Comments on America and Ukraine

If there is a contest for quote of the year, Ukrainian President Volodymyr Zelensky has already won it with his response to America’s offer to fly him out of the country (or maybe to Lviv, in far western Ukraine, I’m not sure) after the Russian invasion started.  Maybe we thought he would want to leave, like Afghanistan President Ashraf Ghani did when we abandoned Afghanistan.  But President Zelensky didn’t.  Which leads to my first comment:

1. Just like in Afghanistan, our intelligence in Ukraine was really bad.  In Afghanistan, we thought the government could last for months after we left.  Instead, it collapsed before we were even gone.  It was a total intelligence failure.

     It was much the same in Ukraine, except in the opposite direction.  While we got it right that Russia was going to invade, we were totally wrong about how well the Russian army would do and we were totally wrong about how well the Ukrainian army would defend its country.  We saw the Russian army as experienced and well-equipped, and we thought they would roll over the Ukrainians.  We saw the Ukrainian army as weak and unprepared, and we thought they wouldn’t be able to stand up to the Russians.  Both of these were wrong, and that was important because those intelligence failures may have affected our policy choices.

Biden Is Looking for Oil Everywhere – Except Texas

The Biden administration energy policy reminds me a lot of Johnny Lee’s 1980 hit country song “Looking for Love (In All the Wrong Places)”, except it should be changed to “Looking for Oil in All the Wrong Places.”  With, first, inflation surging and, now, Russia invading Ukraine, the Biden administration is looking for oil.  Except it is looking in the wrong places.

Late last year, with gas prices up, the Administration asked Saudi Arabia and the Gulf states to increase oil production.  They wouldn’t.  According to some reports, one of the reasons the Administration is pushing to reinstate the Iran nuclear agreement is to get Iranian oil back on the world market.  The New York Times has reported that Administration officials are talking with Venezuela on ways to end on sanctions on their oil, to get supplies up and gas prices down.

To Successfully Address Climate Change, Elites Need to Convince Real People

With COP-26 continuing in Glasgow, the commenters and others are pitching in with their idea.  Martin Sandhu, a columnist in the Financial Times, made this suggestion on Monday: He noted that, while Europe’s “intention to decarbonize is genuine … the continent remains highly dependent on natural gas, and would become more so by weaning itself off coal.”¹   Mr. Sandhu suggested one solution is to use natural gas as feeder stock for hydrogen.  The only problem, he noted, is that all that “is missing is infrastructure and a market.”  Which is the problem with so many of the ideas proposed by climate experts and elites.

It is easy for experts and elites to come up with plans to solve the carbon problem.  The problem they have is convincing people.  As Mr. Sandhu noted in his column, “even a population as climate-conscious as Norway’s has nowhere near a majority for phasing out fossil extraction.”¹ 

Electric Cars, Ice Storms, and the Grid

I was driving home from Lincoln, Nebraska, last weekend.  (We were there to meet a beautiful new granddaughter.)  As I drove back, I remembered another drive back from Nebraska.  It was in 2006 or 2007.  This time we were in Omaha, visiting our son who was going to Creighton University.  We drove home the day after a massive snow/ice storm hit Iowa.  As we were driving on I-80 across Iowa, we saw the effects of the storm: piles of snow, semis in the ditch, etc.  It was sort of scary, except we were a day after the storm, so the roads were clear, and it didn’t affect our driving.  

The only real problem for us was that electricity was out all along I-80, and we were starting to run low on gas.  (Note to self: In the winter {or spring or fall}, don’t let your gas tank get too low.  You never know when stations might be closed.)  Fortunately, we finally found a gas station that was open: It had a generator, so it had electricity and its gas pumps worked.  To say we were happy – and relieved – is an understatement.

Climate Change, Extreme Weather, Carbon Limits – and Adapting

If it is true the extreme weather we have been having is a result of climate change, i.e., putting too much carbon into the atmosphere, then two things:

First, my suggestion with respect to putting less carbon into the atmosphere is a carbon tax, especially a carbon tax that would be refunded to everybody equally, on a per capita basis.  A carbon tax would probably be one of the quickest, most effective, and least costly ways to cut carbon.  A cap-and-trade system might work, too.  Heavy government regulation is a less good option.  It wouldn’t work as well, and it would be slower.¹

The Problem Climate Change Advocates Haven’t Solved

The difficulty in solving climate change can be seen in two articles in Saturday’s FT Weekend.  The first article, on the front page, was headlined “Germany fears climate change caused floods.”¹  I don’t need to say much about that article.  The point is clear from its headline.

The problem we are going to have in addressing climate change is in the second article, on page three: “EU climate policy runs into torrent of criticism.”²  Here are some excerpts from that article:

Offloading Obligations Onto Future Generations – In Germany and the United States

A recent decision of the constitutional court in Germany has a lesson for the United States.  In Germany, the constitution works differently.  The constitution, actually, it’s called the Basic Law, and it dates back to 1949 and the founding of West Germany, allows for the federal constitutional court to get involved on issues and in ways that are different from what happens in the United States.

In late April, the constitutional court issued an important decision on Germany’s climate change law.  The Financial Times reported: