Economics: Who Caused The Global Energy Crisis?

 (Drivebycuriosity) -  It seems there is a global energy crisis. The prices for coal, gas & oil are skyrocketing. A German electricity producer was forced to halt a power plant after it ran out of coal, in Spain the costs for electricity tripled in the recent months and in Great Britain the gas stations are running out of fuel. (marginalrevolution reuters). 

These developments have a common cause: The crisis is made by politicians. For years politicians worldwide have been fighting the production of fossil energies without providing valid alternatives. Many countries shut down their coal production. I can understand that, burning the black material creates a lot dirt and ruins health & environment. But the overhastly coal shutdown greats a gap. Something has to replace coal as a source for electricity. The current crisis shows that solar & wind energy, which are favored by the "Greens",  are not enough to compensate for coal.

There exists a possible energy source, which is cheap, with ample supplies and which does not create green house gases: Nuclear energy. Nuclear energy would be the solution for the climate crisis. But nuclear energy is treated like the Beelzebub. Many countries, including the US & Germany, cannot fast enough shut down their nuclear plants and want to get totally rid of nuclear power. 

So the world relies even more on oil & natural gas. Not long ago the market for oil and natural gas was well supplied, thank to US fracking. A rising US oil and gas production supplied the world (at least to a large part),  reduced oil and gas prices and destroyed the Opec monopoly (chart below).

 

Natural gas price:

 

 ( source)

 

 US Oil production:

 (source)

 

Unfortunately the Biden administration is fighting US oil production and fracking ( newsweek  reuters). Biden`s anti-fracking policy - limiting fracking, stopping new extraction of oil or gas on federal lands and suspending Trump era oil leases in Alaska - is already holding back US fracking and slowing US oil production (chart above). As a result rising demand - caused by the economic recovery - meets a shrinking (or at least curbed ) supply - oil & gas prices are jumping on multi years high even though the economy has not fully recovered from the Coivid-19 recession.

The energy price explosions are hurting the global economy, which still has to struggle with Covid-19 and supply chain issues. The current energy crisis is a warning. The climate change agenda is creating a lot headwinds for the global economy - and maybe even more severe energy crises are following.