Prodromus

In the US, we have been talking about our current energy crisis, and our need to become energy independent.  The general population certainly is becoming aware of this need, $4 a gallon gas helps to get people focused on an issue.  Hopefully our political leaders will start to put action behind their rhetoric. However, the US is not the only country that needs to be concerned about energy independence.   With the recent crisis in Georgia, it is clear that this conflict has a large impact on the energy situation in Europe.

As we discussed last week, Russia currently has a stranglehold on the EU’s energy supply.  The Russians now supply about 25 percent of the European Union’s crude oil needs and half of its natural gas.  If the European Union has not figured out the strategic importance of this fact, the Russians obviously have.  Just as OPEC held the West hostage in the 70’s, Russia now has the ability to wield the same control over Europe.  Their first step was invading Georgia and daring NATO to do anything about it.  So far, Europe has once again shown their leadership in the fine art of appeasement.   And the US, which is busy fighting multiple battles, does not have the stomach to get involved. 

There are three basic reasons why the US, EU, and others such as China, India, and Japan need to become energy independent.

1) Stop sending Trillions of dollars to non-democratic countries that are usually unstable dictators, or hostile regimes.  This money transfer is unhealthy to the global economy.  It allows a small group of people in these petro-kingdoms to hold their own people hostage.  Is it any surprise that almost no country who’s main export is oil is a free democracy that values human rights?

2) Our reliance on carbon based energy sources is a contributor to global warming.  In addition, the extraction of oil from areas such as the Middle East, Nigeria, and South America creates huge environmental issues.  These countries do not have strong environmental regulations like we have in the West.

3) New energy technology will drive our economy over the coming decades.  Instead of sending petro-dollars overseas, that money should be invested in our economy, and on new technology that will help make the world a safer and cleaner place to live.